Infrastrutture Wireless Italiane S.p.A.

Good afternoon. This is the Coral School Conference Operator. Welcome and thank you for joining the INWIT First Half 2022 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. Fabio Ruffini, Head of Investor Relations of InWit. Please go ahead, sir.

Good evening, everyone. Thank you for taking the time to join us for InWit's second quarter 2022 results conference call. With me today are Giovanni Ferrigo, our Chief Executive Officer, and Diego Galli, our Chief Financial Officer. Before we begin, please allow me to draw your attention to the Safe Harbor Statement on page 2. Following our presentation, we'll be happy to take your questions. Over to you, Giovanni.

Thank you, Fabio, and welcome, everyone. Today's presentation is focused on a few messages. Rebound of KPIs, more than doubling new site versus Q1, step up in Holos. Continued execution of financial targets with high single digit organic revenue growth. Margin expansion and confirming 2022 guidance. A stronger infrastructure with the two new commercial agreements for hundreds of new sites having value for the long term. The net positive impact of inflation on financials and on business plan targets. The confirmation of the structural positive strength in the wireless infrastructure industry and in with assets, macro and micro grid well-positioned to capture this growth. A quarter of solid progress, which confirms our role as the main wireless infrastructure company in the Italian market. The key results of the quarter are displayed on page four. Beginning with industrial KPIs, We deliver the rebound that we discussed last time that we spoke. New sites and holopots more than doubled versus one. We have an improved internal site delivery process, and there is a positive demand from fixed-water access and OTMO. This trend will continue in the coming quarters. Demand for new sites in the Italian market is very strong. Regarding financial, We started the year strongly in Q1, and Q2 confirmed this trend. Consistency across quarters is an important feature of our business model. On the best organic revenue growth trends in the industry at plus 9%, with 30% EBITDA growth, margin expansion, and solid cash flow generation. This is supported by least cost efficiency. with more than 650 renegotiation and buyouts. The next three pages focus on the main components of our revenues, beginning with Anchor on page five. Anchor POPs are up 7% year on year. This is driven by MSA commitments. and the industrial need to improve coverage and roll out 5G in the most efficient way that is through the partnership with Inuit. We added 2.5 thousand new ports over the past year and are satisfied about the pickup in new sites. We delivered 120 new sites, a sign that the changes we made internally are working. We expect higher site delivery in the coming quarters and 500 sites in 2022. POP growth was lower, mainly due to lower new sites build activity in Q1. MSA commitment continues driving our P&L and we expect an improvement in Anchor POPs in the second half of the year based on the current pipeline. Turning to our clients on page POPs by other clients were up strongly year on year, plus 15% confirming the quality of our asset and in-width role and neutral loss. One of the best results in the industry and a record quarter for in-width. 540 new tenants, nearly double versus Q1. Fixed viral access and optimal clients supported the results, with MNOs still focused on towns below 35,000 population where the remedies don't apply. This is a diversified client base placing equipment and sensors on our towers for a limited incremental cost and low electromagnetic field spectrum. The commercial effort on the OTMO category is being effective. We address the strong demand from utility and security companies, adding services to the tower, which is becoming more and more a digital asset. Having delivered a solid Q2, our focus now shifts to making sure we keep a high run rate in the coming quarter. Moving to new services on page seven. This is a very dynamic part of our business, where DAS and repeaters work in synergy wind towers, macro sites. Market demand is driven by coverage needs of transportation infrastructure and indoor location, with a variety of different customer and application verticals, corporate headquarters, entertainment venues, hospitals, industrial sites, and public administration buildings. So far in 2022, the healthcare vertical has been the most interesting. There are more than 3,000 locations in Italy, which will need to be covered by 2026, and we target about one-third of the market. Going forward, we expect a further pickup in new services, which will grow at rates above English average in the coming years, also supported by next-generation EU. Two important new commercial agreements on page 8. With the quarterly results, we are also proud to share two important agreements, which will reinforce our asset base and long-term potential. First, Open Fiber, an important client to Inuit, where the partnership is reinforced by a new contract for the building of sites in remote areas. This adds visibility to our overall growth targets. Then, the 5G Next Generation EU Tender, where we led a consortium with Tim and Vodafone to win all six available lots. The aim of the tender is to support 5G adoption in a market-fired area through new sites where the investments are subsidized for 90%. This goes in the direction of confirming our expectation for next generation EU, positive for the industry, but mostly win an indirect long-term impact rather than transformational in the short term. The two new commercial agreements with large customers affirming Inuit as a key digital infrastructure player in Italy and supporting the reduction of digital divide. Let's now turn to the financial. Diego, over to you.

Thank you, Giovanni, and good evening, everybody. The financial performance of the second quarter builds on the progress made in Q1 to confirm the growth trend for the full year. While in 2021 we were focused on stepping up the pace of growth, now we expect to maintain this cruising speed. In terms of growth drivers, anchor revenues were driven by MSA commitments and the new POPs on existing and new sites. All those and other revenues are up because of new POPs and services like design, installation, and maintenance. New services more than doubled, also due to the highway tunnel investment made in 2021. As a reminder, the current positive inflation impact on the P&L is related to the 1.9 percent average Italian CPI of 2021. EBITDA margin is in line with the plan at 91%, and most of our efforts on cost efficiency revolve around ground leases, where with about 650 sites renegotiation and buyout in the quarter, we continue to make tangible progress. EBITDA growth continues to outpace revenue growth, plus 13% year-on-year with margins up from 66% to 68%. Now, cash flow on slide 10. Recurring cash flow generation in the second quarter was robust at more than €101 million, up 11% year-on-year. We convert margins into cash at a structurally high level due to double-digit EBITDA growth, limited recurring capex, and in neutral networking capital cycles. In the quarter, we note the presence of cash taxes about 24 million euros. This is a large proportion of the total tax cash out for the year, which is confirmed at about 30 million euros. Then slightly negative networking capital, neutralizing the positive moving one, and growth capex, mainly for new sites land acquisition, including the impact of inflation. 14 million euro cash out for the second tax scheme approved in 2021 and the normalization of one-off cash movement in Q1 as expected. Considering the facing of tax cash out and networking capital, we confirm the cash flow target for 2022. Net debt stood at 4.3 billion, up quarter on quarter, essentially to allow for different payments of 305 million euros. Leverage stood at 5.6 times, and we will deliver material by year-end, when we will be at approximately 5.2 times. We progressively create balance sheet flexibility after leverage start per year, Optionality to push on growth or to increase shareholder remuneration. After the merger, in-width debt profile has been optimized with no maturities before 2025 and fixed component at 80%. In summary, we delivered a positive set of Q2 results with growing margins and profitability. and expect this growth to accelerate further in the next year, also thanks to a positive external environment. Giovanni, over to you.

The strength of in-width MSA is evident in the current environment of elevated inflation, and it implies an upside to guide us. In-width revenues are all inflation-linked, with MSAs having a zero floor and no cap. Despite OPEX and ground lease also being impacted, 1% inflation means more than 5 million euros a bit dull. The market, operational and industrial drivers of our business plan are confirmed. Assuming 2022 inflation from 2% to 6.5%, means going above the top end of guidance for 2023 revenues, EBITDA and EBITDAL. Due to the interest costs of variable debt at the recurring leakage flow level, we will achieve the top end of the range, or €600 million in 2023. The benefits of 2022 inflation will not be temporary. they will add to the run rate. The 2026 business plan will also benefit from it. Recurring free cash flow, higher inflation means a 2026 target of more than 700 million euros. Let's turn now to ESG, an integral part of the way we do business. Inuit assets connect more and more people to high-speed networks and allow for infrastructure to be shared by operators, reducing the use of resources and creating efficiency in the industry. We are, therefore, structurally sustainable. We set ambitious targets in our sustainability plan, the key one being carbon neutrality by 2024, and have been making constant progress. In the first six months of the year, we added ESG KPI to our evolving credit facility extension. We were included in Bloomberg Gender Equality Index. Our emission reduction targets were approved by science-based target initiatives, continued covering hospitals. remote and underdeveloped areas, also with the agreement with Open Fiber and 5G Next Generation EU tender. More recently, we joined to the FTSE for Good Index after a material improving of our rating. Going forward, we will continue to update you on our progress on a semi-annual basis as we optimize the use of energy and develop innovative technology. A few final remarks in Phase 13. The results of the first six months demonstrate that there is a material growth opportunity for wireless infrastructure operators, and that we are on track to deliver on our targets. Based on the superior quality of our assets and long-term partnership with the key operators in Italy, We expect to continue growing at top level in the industry, in organic term, progressively generating balance sheet flexibility, which is an added optionality. Towers are among the few user-approximate connected and equipped assets, and there are new opportunities to provide value-added infrastructural services in a context of strong demand and growing investment in digitalization. Thank you everyone. And now we are ready for the Q&A session.

This is the Coral School conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. In the interest of time, please limit your questions to a maximum of one question each. Anyone who has a question may press star and one at this time. The first question is from Fabio Pavan of Mediobanca. Please go ahead.

Yes, hi, good evening and thank you for taking my question. Since we have to limit to one, looking at the updates you provided on on open fiber and the national recovery plan. My question is for sure this is an accelerator for your business and this would allow you to meet the targets which you have raised tonight. But I was wondering if it's fair to argue that in the midterm both the angle on 5G national recovery plan and in particular the business you are making with Open Fiber could allow you to capture more business that so far is not visible in these two agreements. Thank you.

Thank you, Fabio.

Okay. This very, very important agreement for us is a pillar for a long term of our business, let me say, growth. Because, let me say, we will collaborate with, let me say, Open Faber to cover the ancient, let me say, tenders of the white areas In Italy. In the mid-term, okay, we are working in the designing and the location of the sites. And let me say, jointly to the PNRR is an important role that the company is playing for the visualization of the country. Not only for the quality of the assets, part of the quality of our engineers to design and to, let me say, to locate the new sites for the customer needs. Okay, this is the scenario, no, Diego?

Yeah, and let me integrate, as you said, Fabio, this project, the fiber project is part, is embedded in our plan, but overall, we are expanding the perimeter of our infrastructure. Both projects allow us to have a better and stronger, bigger infrastructure. So we are building on top of the current one that, as we know, is already the best in the country, and we keep on expanding. So for the, I would say, long term, considering also that the recovery funds, the timing is about 10 years, For the long term, this puts INWIT in a stronger position and in a position of, for sure, strength in areas where the demand for digitalization is getting higher and higher, both supported by the government initiatives. So overall, yes, we would say that for the long term, this adds strength and opportunities for INWIT.

Thank you.

The next question is from Simon Coles of Barclays. Please go ahead.

Hi all, thanks for taking the question. So clearly we can see inflation is going to be a benefit in 2023. I was just wondering, and I think you get asked this quite a lot, on the lease side, is this making negotiations tougher or easier? I'm just wondering maybe with the cost of living crisis, if that's actually making it easier to buy out land leases in your discussions. So just any comment on how that's progressing, given how successful you've been so far. Thank you.

Hi, Simon. It's an interesting point. Let me say that so far we have not seen any significant change on the ground leases coming from the changed inflation scenarios. On one side, clearly assets such as land are becoming more interesting. On the other side, there are the small landowners which are more under pressure from a financial point of view. But both cases, these are not a significant trend at the moment. What I think is important to highlight is the strength of our operational program. And as proven by Q2, where we made more than 600 actions So overall, the program keeps on running and delivering benefit for the company, optimizing. And until last year, we reduced in absolute terms the ground risk cost. We will keep on reducing despite the higher volume, and somehow we will absorb part of the inflation increase.

Okay, cool. Thank you.

Welcome.

The next question is from Roshan Ranjit of Deutsche Bank. Please go ahead.

Great evening, everyone. Thanks for the question. Good to see that CPI assumption has stepped up for FY23. I guess my question is, if I look at the midpoint of your EBITDA guidance range prior to this, so the 650 to 690, if I take the midpoint 670, And I think you previously said, you reiterated today, one percentage point is greater than five, has a greater than five euro EBITDA impact. So that will mean at the midpoint, that would suggest 693 million for FY23 EBITDA under this new assumption. So firstly, I guess, is that still in your eyes a conservative view. I mean, we still got six months left of the five months left of the year. And can I just confirm that there isn't any change in the kind of volume assumptions that you have embedded into that guidance? Thank you.

Thanks, Roshan. Yeah, let me say the business plan is not changed in real terms. Today, Update is about the, let me say, the overlay, the impact, technical impact coming from the inflation assumption update. The mechanics, the logic you have gone through is the right one, and absolutely in line with the mechanism we shared with you also in the previous quarter. So the one percentage point of inflation basically leads to 5 million additional EBITDA run rate. Then, clearly, honestly, the inflation estimate is constantly changing. It's not yet stable. In Italy, it's been 6% as actual so far. Broadly, 7% the estimate for the full year, but there are still some uncertainties mainly related to the energy prices. So, I guess, I think the mechanic is very transparent, very clear. Your reasoning is absolutely correct. And that's the reason why actually we have given an indication that is really linked to the fact that the business plan is confirmed, the basic range that we disclosed is confirmed, and then there is the overlay that today has been quantified at about 6.5%. I guess we'll keep on changing and again, the mechanical decalculation can be updated basically by everyone based on the mechanism we share.

Okay. Thank you. Welcome.

The next question is from Jacob Bluestone of Credit Suisse. Please go ahead.

Hi. I had one probably very quick question, which is Is there an update on the ILEAN process that you can provide or any indication when we might hear something next? Thank you.

Okay, as you know, there is no new on the table. We are waiting for the final decision of the Antitrust Authority in Brussels and the Court of Brussels. Okay, we are, let me say, we are working with Iliad in the municipalities under 55,000 inhabitants, waiting something happen, and I want only underline and remember to you that October, this, let me say, procedure will have So I think that is something really understandable, not easy to understand, and we hope that this will be solved quickly.

Thank you.

The next question is from Jerry Delis of Jefferies. Please go ahead.

Yes, good afternoon. Thank you for taking my question. The question is related to anchor tenancy growth, please. I understand that the slowdown in anchor tenancy ads in the second quarter was related to the lower level of site build in the first quarter. The consensus is looking for anchor pop net ads of about 3,300 for the full year. Are you okay with that? And then What flexibility would an anchor tenant have to perhaps change its commitments to you? Has an anchor tenant asked that question? And if you were to be faced with an anchor tenant that had balance sheet constraints seeking to renegotiate its commitments, how would you respond? Thank you.

Thanks, Charlie.

Let me start from the second part of your question, which is related to the MSAs. The MSAs, we've got the MSAs with the two Tier 1 anchor tenants, which are very, very strong MSAs. You may remember they are built on basically three components, the fixed fee, which is updated with inflation and with no cap and floor at zero. There are the committed revenues, And then on top, we have the role of preferred supplier for additional opportunities. The committed revenues, I guess, is the core of your question. And when we say committed is committed, and the commitment is related to the total value generated over a specific period of time, as well as the revenue profile over the year. There is flexibility in terms of service mix. There is a little bit of flexibility over quarters, but the commitment is very clear and strong. And the operational plans we have with the anchor tenants are fully supporting the committed revenues. Having said that, coming to the first part of your question, in terms of new sites, We discussed this in different quarters, and last quarter is an example on the development of new sites. We didn't have a steady state. There have been some bleeps. What is now the focus is to have a steady delivery of new sites. and we are happy with this quarter, and we've got strong visibility of the next quarter, so we will see a more steady and accelerated progress on new sites that will support the acceleration of new tenants with the anchor tenants.

Thank you. Could I just clarify that 3,300 anchor pop ads for the full year then is a is an achievable target. I think that would require about between $800 and $900 a quarter for the rest. No, sorry, it would require, let's see, it would require about $1,000 a quarter in the second half.

Yeah, that's fair. We don't have in the run rate and as well as in the operational plan for the next quarter this number. We will accelerate and accelerate further. And we are confirming overall the revenues for the year and the breakdown actually from different customers anyway, as we did basically in the last few quarters. Overall, in terms of KPIs, we have been a little bit behind. But despite that, we have delivered on revenue and cash flow generation. And actually we will benefit in the future from the acceleration of the KPIs. And this is related to the anchor, as you are underlined, but also honestly to all of us. We are very pleased by the current quarter. That is also a quarter which shows the results of the changes that in the company have been implemented. So it's for us really a quarter where we deliver exactly in line as expected, and we have a very strong visibility for the strong quarters as well. So it's a quarter which marks for us a change, a positive change for the future. Thank you.

The next question is from David Guarino of Green Street. Please go ahead.

Thanks. Just a quick one, and then I'll follow up if that's permissible. The first one is, can you talk about any changes to your IRR expectations when you're underwriting investments today? And I'm asking that especially just in light of your current cost of capital and the general economic uncertainty.

Hi, David. Overall, in terms of returns on the investments, we don't see any significant change. We have a policy of double-digit unlevered IRR, which is basically all projects are above. Let me say the key point about double-digit IRRs is to have two tenants on the site or two tenants on the dust for the indoor coverage. So that brings the returns comfortably higher than 10%. And that's one of the strengths of Inuit, having two anchor tenants as key customers, which secure us a double-digit IRR and allow then for further upside, increasing further the tenancy ratio.

That's helpful. And then kind of a follow-up to that, on slide seven, your new services slides, Can you maybe talk a little bit about the process of how you win new projects? Is that purely based on bidding, or does InWint have any sort of strategic advantage when they win these deals? And then maybe just comment on the level of competition you're seeing when you go after more like the hospitals and the entertainment and industrial-type projects.

Actually, in terms of process, for new, let me say, DAS or indoor coverage. We have a process whereby either we drive, selecting some specific locations and proposing them to the customers, or we follow and we address the request from the anchor tenant. What is clearly for us a competitive advantage is that we have, as we said, two anchor tenants, And we have a preferred supplier role with the anchor tenants. So clearly this gives us a competitive advantage. And the development of the microgrid is what we are working on. So to complement the macro with... Okay.

We did a very detailed study. 11,000 locations that need dedicated coverage in Italy in the plan. We choose 3,000 of these and we are not sure to gain 1,000 of these locations. Okay, we continue to cover hospitals as you have probably read. We gained the target to have covered 40 hospitals in Italy. Okay. This is very, very important. We are working in the public administration because the digital divide incredibly is in the public administration's offices, too, that need to improve the capacity. And as I said many times, We target the infrastructure monitoring, transport, where through the, let me say, dedicated coverage, tunnels, train stations, and monitoring the quality of the infrastructure, we can play a very, very important role. For this, let me say, The agreement with OpenFiber underlines, proves our credibility and reputation in this context, in this environment, and we will be able to surprise everyone in the market in the next year.

Thank you.

The next question is from Stefano Gamberini of Equitasim. Please go ahead.

Good afternoon everybody. One question regarding the deal between Aydin and Intim, if you have some information on that. We read on the press that the government decided to exercise its special power in terms of provision for the acquisition of this stake. The timing seems to be quite long. I don't know if you have some comments on that or do you see at risk this deal? considering that on the other side, there was already a similar deal two years ago between Hutchinson and Celnex. Thanks.

Thank you, Stefano. We read, probably as you, that the government released the Golden Power, let me say, regulation to the operation, so we are waiting for the conclusion of the agreement between Arden and team, and in this sense we will, let me say, do all the necessary steps to manage this change of control, finally, okay?

Just to clarify the meaning of release, perhaps, so we read, as you did, that sort of the green light was given, so it's just a matter of time for the next steps to happen, so firstly the closing, and then obviously the next steps after that.

Okay, thanks.

The next question is from Fernando Cordero of Banco Santander. Please go ahead.

Hello, good afternoon. And thanks for taking my question. It's a follow-up on the, let's say, on the potential organic investments. And in that sense, sorry, I would like to hear your more fresher thoughts. or your fresher thoughts regarding the $1 billion balance sheet leeway that you have by 2023. In that sense, even the potential upgrade given by the inflationary scenario is even giving more flexibility on this potential, let's say, balance sheet leeway. and i would like to understand um how do you see the potential opportunities in the italian market uh we under oh i understand that open fiber could be one of these uh i don't know how we just tend to increment your activity in buying land considering the current inflation scenario would make sense just to understand on top of the the news or the deals that you have already announced How are your thoughts on potential incremental organic capital opportunities on the market, given your balance sheet leeway, particularly in 2023? Thank you.

Thanks, Fernando. Yeah, actually, as we discussed, we are very pleased that we are now building quarter by quarter the financial flexibility, and we are step-by-step, getting to a level of leverage which will create this financial headroom. And the priorities from our side are to keep on somehow replicating the successful model implemented so far to an extended perimeter, to a bigger footprint. So for sure, we are focused on doing more organic growth capex, which returns are particularly high, so as we can more land buyout or more investment in small portfolio sites or investments such as the one we did last year on the highway tunnel. Also, we are interested in potential, let me say, M&A in Italy or Europe, but we focus on opportunities which create industrial synergies, the chance to have industrial synergies. So again, M&A opportunities which allow us to extend the perimeter, focusing on the core of our business. leveraging on what we are good to do, meaning increasing the value for tower, increasing the revenue for tower, increasing the margin and profits per tower. So that's the strategic and the approach. Clearly, it's not easy to find targets in the sense that in Italy, There are not obvious targets. In Europe, we see clearly prices particularly high, as well as cases where the MSA, MLAs are not supporting the possibility to create tangible and meaningful . So strategy and approach is confirmed. Very happy to have the financial headroom coming closer. And let me also add, as always, that if no tangible opportunity will be identified, we will consider also the additional shareholder remuneration.

Many thanks, Enrico.

The next question is from Giorgios Ierodiaconou of Citi. Please go ahead.

Thank you for taking my question and apologies if it's been asked. I had a moment where I dropped off accidentally. I just wanted to follow up on what has just been asked around your decision on capital allocation. I just wanted to maybe get an update as to your thinking in terms of the timing when you would look at this. I think you mentioned during the presentation the 5.2 times net expected by the end of the year. When do you expect to make a decision on the use of this headroom? Is it a full year kind of decision or could it be made during the course of next year? And then just to clarify just a quick one around the guidance. I'm just curious as to why you're guiding for EBITDA above the top end of the range, yet you're recurring level free cash flow at the high end of the previous range. Is there some working capital of something else that is causing this difference between EBITDA and recurring level free cash flow? Thank you.

Yes, in terms of timing, yeah, we will get to 5.2 by year end. We are happy. And we think that our corridor of leverage between five to six is still meaningful. So we think we shouldn't be out of this corridor for a prolonged period of time, so for multiple quarters. So we think it's clearly, let me say, it's reasonable to expect that the corridor In 2023, in the initial part of 2023, a decision will be taken, but also it depends on how and when and which opportunities will come out. But overall, yes, 2023 is clearly an important, let me say, checkpoint of the implementation of our strategies. With regard to your second question, it's the result of the fact that the interest rates are moving. We have 20% of our debt which is floating, which is variable. The number on recurring free cash flow assumes an increase of interest rates, and that's why the recurring free cash flow is impacted by that and is at the top of the range, not above it.

Very clear. Thank you.

Welcome.

The next question is from Giorgio Tavolini of Intermonte. Please go ahead.

Hi, good evening. Thanks for taking my questions. I was wondering if you can clarify just one aspect on the business model behind the OpenCyber deal. You talked about double-digit IRR, which is technically possible at least with two tenants, generally speaking. I was wondering if you will be able to host other fixed wireless operators equipment on these sites or only OpenCyber will be, so these sites will be monotenant since OpenCyber is the only operator allowed to invest in these wide areas having awarded the infratel tenders. Thank you.

Ciao, Giorgio. Yes, let me start on this. Clearly, the deal is commercially sensitive, but let me say that the deal and, therefore, the economics of the deal have been tailored on the specific of the deal. So, so far, with Open Fiber, basically, we did new tenants on existing sites, and pricing has reflected that. This is a different approach where our new tenants on new sites, therefore pricing reflects the different arrangements. Also, the sites are tailored in the sense that will be segmented and dedicated according to the specific operational plan. So the CAPEX per site will be, let me say, different from the averages we usually talk about.

Having said that, I want to add something, Diego. Okay, these are tailored new sites that will permit to open fiber to be compliant with the previous, let me say, 10 deaths, but that need to cover buildings. So, these sites are totally open to the other fixed right access operators. This is the interesting, let me say, story that we will, let me say, manage in the next year.

Okay, thank you. Very clear.

The last question is a follow-up from Stefano Gamberini of Equitasim. Please go ahead.

Thanks a lot. Just a clarification regarding... the trend of new POPs during the second part of the year. At the beginning, you said that the speed crew that you expect to reach was in the region of 1.5 thousand POPs per quarter sooner or later. So this level could be reached, according to you, during the second part of the year, or the ratio is to postpone to 2023. just to understand what are the commitments from the anchor tenants and considering that these commitments are related to the revenues, are these revenues adjusted for inflation or not in the contract with the anchor tenants? Many thanks. I have two questions, frankly. Thank you for speaking.

Yes, Stefano, yes. So, let me... Absolutely. The run rate of KPIs is clearly the main driver. The run rate of new tenants is the main driver of growth for the company. And it's coming from the new tenants on existing sites as well as new sites from ANCOR and others. And we have basically more than 25,000 new pods targeted by 2026, which overall means slightly less than 1,000 sites per quarter. Clearly, the first three years of the plan by 2023 have a much faster rate. That actually, being extremely precise, is 1,350 rather than 1,500, though it's clearly higher than the run rate we had so far, and that's the run rate that we still target. And we will be gradually getting there, so probably we will not be the average of the half two, but we will see higher and interesting numbers in the next few quarters, so we will get closer, if not to that level. Let me take also the opportunity to say that in the last now, I guess, eight quarters, somehow we have been catching up on KPIs from an operational point of view. But despite the bleeps or some delays, we have been able to generate revenues thanks to actually managing pricing, I would say, very well. thanks to additional services that are sort of upsell to our customers, thanks to the growth of new businesses. So I think that overall the KPIs will keep on improving and somehow that this will make the next quarters and the next years even more solid and robust than what we achieved so far. The blips we have seen so far actually can be recovered in a couple of quarters based on the future rate we spoke.

Gentlemen, there are no more questions registered at this time. Thank you everybody for connecting. Have a good evening. Thank you.