Infrastrutture Wireless Italiane S.p.A.

Good afternoon. This is the Coral School conference operator. Welcome and thank you for joining the INWIT second quarter 2023 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 and Corporate of Inuit. Please go ahead, sir.

Thank you. Good evening, everyone. Thanks for joining us. With me today is Gia Dudali, Inuit's General Manager, and Emilia Trudu, Chief Financial Officer. Before we begin, please allow me to draw your attention to the Safe Harbor Statement on page 2. As usual, following a brief presentation, we will open up the floor for questions. Over to you, Daniel.

Thank you, Fabio, and welcome, everyone. The second quarter results show steady progress in the execution of the business plan. Industrial delivery of new sites continues upscale. Organic growth was 13% among the best in the industry, with the new services up by 45%. Margin expansion and cash flow generation were solid. Demand for digital infrastructure is structurally positive, driven by mobile data growth, densification needs, and urgency to optimize coverage, both outdoor and indoor. InWizard is building a solid track record in a challenging environment for the Italian telecom industry. where operators are looking for cost savings and better returns. Shared infrastructure investments can be part of the solution, a source of efficiency. And while this is typical for tower costs, INWIT is unique, with two anchor tenants and also the role of neutral loss. We are extending this model from macro grid outdoor to micro grid indoor and thus. Our companies can be at the center of a virtual cycle between location owners, public and private, and mobile operators with value creation for all. Moving to the key figures of this quarter on page four. Financials and operational indicators maintain the consistent growth rate in Q2 among the best in the industry, starting with revenues, growing consistently at low things since the beginning of the year. Growth with Anchors is material at more than 12%. Holos continued to add the new POPs, offsetting lower other revenues, which were particularly significant in 2022. Increased commercial effort led to a 45% growth in new services. Here, the quarterly revenue figure is two digits for the first time. A bid after lease growth was more than 16%, leading to margin expansion to 71%. And we are on a path to a 76% bid after lease margin by 2026. Cash flow generation was strong. we captured the benefits of networking capital efficiency actions on legacy items. These benefits are structural and support the progress towards full-year targets. After dividend payments, leverage was five times in terms of net debt to EBITDA, against 5.6 times a year ago, confirming our ability to deliver quickly. INWIT Industrial Delivery Machine continues to operate at high level. The rollout of MSA in new sites is in line with targets, and we started the delivery of other two BTS programs, Next Generation EU 5G and Open Fiber. Strong in new sites supported the volume of new POPs at 1,060, with tenancy ratio inching higher at 2.2. Real estate transactions were more than 500, with the majority of acquisitions supporting margin expansion. A quarter of further progress along the trajectory of the business plan. And now, I will turn it over to Emilia for a more detailed review of the results. Thank you.

Thank you, Diego, and good evening, everyone. On page five, the evolution of macro-sites about $23,500 today, and growing 3% year-on-year, confirming inward leadership in the market. Demand for new sites is strong. Operators are focused on optimizing coverage of the market and upgrading to 5G, drive intensification. We invest with a minimum threshold of double digit IRR, highly visible cash flows, and a tenancy ratio of two from day one on every MSA new site. Over the past couple of years, we made new sites a priority in terms of both being able to grow the quarter in pace and being less volatile. We have built a consistent track record going from 70 new sites in 2020 to about 800 in 2023. The second quarter of the year, shows a total of 225 new sites, a sequential improvement for the MSA from quarter one, and the initial rollout of the other two VCS programs. We continue to address the administrative challenges that still make building a new site a long process, adjusting to the higher delivery scale we have reached. Let us now review anchor points of presence on page six. We added 650 new POPs with Steam and Vodafone in the second quarter of 2023, with total POPs reaching nearly 40,000 and growing 7% year-on-year. In which mission is to deliver an efficient solution to the ongoing upgrade to 5G. And this means both new POPs on new sites and a continuous effort to optimize the grid on existing sites. Contractual commitments are the main driver of this growth, and with nearly 1.4 thousand new posts added this year, we are progressing in line with our full year targets. Moving on to all of the page seven, we see that hospitalities with other clients were up significantly, plus 17% year-on-year, for a total of nearly 13,000 POPs at the end of June, among the best trends in the industry. We added 410 new POPs in the quarter, an improvement as compared with Q1, although still a bit below the earlier rate. In terms of mix, we added new hospitalities with every client category, including M&O, where the potential is limited by the remedies process and usage. While demand from some FWA clients was soft due to specific developments, other clients supported volumes in particular in utility segments. InWit business model is based on hospitality services to multiple client categories and technologies, from mobile to FWA and IOT. Growing mobile data use, need for better coverage, and the emergence of new use cases confirm our positive structural outlook for the market. Next, on page eight, we reviewed new services. New services were up 45% year-on-year, outpacing the rest of the business, and reaching 11.5 million euro in the quarter. This compares with only 3.4 million not two years ago. The business expanded more than three times in two years, mostly on the back of increased indoor coverage services through DAP, Distributed Antenna System, and highway tunnel connectivity. This will continue to be a key growth driver for the business plan to 2026. In with microgrid assets, Nearly 8,000 remote units and 1,000 kilometers of road tunnels are multi-tenant solutions that provide connectivity and capacity in indoor and in traffic locations. They will become even more important with our pervasive diffusion of standalone 5G. Demand is growing. In the first half of 2023, we added about 130 new locations in a variety of verticals in particular the public administration, leisure, transportation, and health care. Some of the flagship locations include luxury hotels, important transportation hubs, and iconic museums. Moving on to the P&L on page nine, quarterly revenues were up to €227.6 million. up 12.8% year-on-year and plus €4 million as compared with Q1 2023, supported by the CPI link of our contracts where the MSAs have no cap. The run rate benefits from growing volumes of hospitalities with all clients, anchors and orders. On a year-on-year basis, we booked fewer other revenues such as installation, maintenance, and technical services, which limited the overall trend in our second revenue reporting line. This is broadly aligned with our expectations and will normalize over the course of the year. As mentioned, new services were up materially, plus 45% and plus 3.6 million euro year on year. With regards to cost, OPEX were up year-on-year, plus 12.2%, in line with revenues, also discounting accelerated saving of maintenance. This resulted in an EBITDA margin of 91%, in line with guidance. Below the EBITDA line, we booked higher DNA, in line with our CAPEX cycle, higher interest, driven by the variable portion of our debt position and higher taxes in line with the phasing of the tax schemes entered into. Including these attacks, a relevant portion of which are non-cash, NetIncome was up 9% to about 81 million euro. Finally, ground risk costs were over. Efficiency in real estate more than offset the higher number of sites and of projects as well as inflation, driving EBITDA margins up 2.4 points year-on-year. On slide 10, we discussed cash flow. Cash flow generation in the second quarter was up materially year-on-year, with recurring free cash flow at about €187 million. On a six-month basis, approximately €324 million. We are at more than 50% of 2020 free guidance. We had minor cash outlays for recurring capex, €3.9 million, and tax, €4.8 million. As anticipated in Q1, we recorded sequentially better trends in the scope and networking capital. More in detail The 37 million euro positive networking capital figure was related to efficiency actions linked to legacy items with a number of clients. This positive effect will not materially reverse in the coming quarters, contributing to our full year guidance. Total capex was about 60 million euro in the quarter, up from about 39 million euro in the second quarter of 2022. mostly due to a higher volume of new sites. Moving to the balance sheet, the financial position was up quarter to quarter to 4.3 billion euro, including IFRS 16 liabilities. The debt to the DA moved up to five times from 4.7 times at the end of March, essentially due to dividend payments. When comparing end of June leverage in 2023 and 2022, we can appreciate Inuit's ability to quickly deliver 0.6 times leverage terms in a year. Our debt profile continues to be efficient. Cost of debt remains low at 2.4%. More than 75% of debt is fixed, and we do not have any relevant maturities before 2025. with the expiry of a term loan for €500 million. We are mindful of the importance of capital allocation for any business, infrastructure in particular. In the coming months, we will continue the buyback program and look for opportunities to deploy more capital at attractive returns. With this, I thank you and I leave the floor to Diego.

Thank you, Emilia. Before some concluding remarks, I'm pleased to share an update on the sustainability plan as we do on a semi-annual basis. Sustainability sits at the core of what INWID does, sharing infrastructure so that there is less duplication and better use of resources, as evident by a growing tenancy ratio. Connecting communities to high-speed networks, we added 140 POTS in wide or vulnerable areas in the first half of the year. and in certain cases, enabling innovative services which directly protect the environment and its biodiversity, such as smart sensors in natural parks. We set ambitious targets in terms of reduction of environmental footprint and choose to have them validated by highly regarded international bodies. This has been progressively reflected in improving ESG rating and in the entry in the most important indices such as the FTSE for Good. Looking ahead, we will be carbon neutral by 2024 and net zero by 2030, while fostering the widespread adoption of broadband connectivity in a sustainable way. A few more words on page 12. Our business plan aims to make Inuit structurally stronger. We invest at attractive returns to grow the asset base. more macro sites, a nationwide network of DAS indoor locations, and a growing proportion of land ownership. We do this with a renewed focus on industrial processes, able to manage the growing complexity and scale of the company, and enhanced commercial capabilities on the microgrid, where we are building momentum, more clients, more sales channels, innovative service proposition. In an industrial context where clients are focused on efficiency and improving returns, we stand as a source of efficiency and a trusted industrial partner. With this, I thank you and we are now ready for the Q&A session.

This is the Coruscant 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. Anyone who has a question may press star and 1 at this time. The first question is from Andrew Lee of Goldman Sachs. Please go ahead.

Yeah. Hi. Good evening, everyone. Your results show clearly continued strong delivery. So I just wanted to ask a question about kind of potential risks to the underlying delivery and just take into account the recent M&A in the Italian space and more broadly. So just first question, the basic question is, have you seen any change in behavior following EQT's wind tray active equipment acquisition or suggestions of changing behavior, potentially more actively pursuing sharing equipment and putting downward pressure risk on tenancy longer term. I'm also minded that EQT bought Radius in the US, which has had some modest success in Europe in terms of consolidating landlord sites. So just wondered if you've seen any kind of increase in efforts to consolidate sites, given that some of this activity could focus initially on Italy. Thank you.

Yeah, thanks, Andrew. In terms of market, we don't see any significant change in the market coming from the wind-free transaction operation in general. we do see that transaction, that structure going into the direction, clearly, of a separation between service company and infra company, which is, we think, something which makes sense over time and is consistent with our view for the medium-long term for also tower companies getting to a broader space and extending the perimeter also. broadly and on top of the passive equipment gradually towards managing also the active equipment. We don't see it in the short time, but we do think it's a rational opportunity for the industry over medium-long term. With regard to landlord, as well, no significant change. We continue to pursue our targets of continuous efficiency through both renegotiation as well as buying out land. We made good progress also in this quarter, and we are progressing towards the target of achieving 20% of land owned by the end of 2026. Thank you.

That's really helpful. So no change in pace at your ability to kind of buy in that land?

No, no, no, no.

Thank you.

Thank you.

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

Good evening, everyone. Thanks for the questions. I've got two, please. Thanks for the extra detail on slide five with the new sites. Just to make sure I understand it correctly, you're saying that this quarter you had 55 new sites from a combination of the next-gen fund and open fibre agreements. So firstly, can I check that's right? And secondly, how should we expect that to trend in the second half of the year, please? And my second question is on the working cap. So you highlighted a big positive this quarter, which, if I heard correctly, I think you said will continue or should carry forward to the end of the year. You've reiterated your recurring free cash flow guidance. for the full year. So should we, did you anticipate this big cap, working cap gain, or are there any other kind of drags which this working cap gain will offset for the full year? Thank you.

Hi, Roshan. On flight five, yes, we made in the port 170 sites for the MSA programs with the anchor and 55 in relation to the other programs. So we started the next generation EU and picking up also on the open fiber program. And we do expect to continue a good base for the next quarter. So we will see similar numbers for the next quarter. So we will end up the fiscal year with broadly overall 800 sites in the fiscal year.

Concerning the networking capital trend and the current British flow, yeah, as already anticipated in Q1, we anticipated the reversal of the negative networking capital. We, this positive trend, positive move in the quarter, is structural, so we do not expect to reverse this in the coming quarters. And going forward, we do expect a continuous trend of strong recurring cash flow supported by ongoing EBITDA growth, low recurring capex in the order of 2% to 3% of sales, relatively low cost of debt, efficient tax payments, And grant this cost that will be stable or almost in line with this course.

Okay. That's helpful. Thank you.

The next question is from Jacon Bluestone of Exxon BNP. Please go ahead.

Hi. Thanks for taking my questions. I have two questions, please. Can you maybe just provide a little bit more color around the outlook for FWA revenues, given there's some changes happening within some of those players? So do you think that might slow down? And if so, is that an issue? Can you maybe just remind us how much lower the revenues for FWA tenants are versus sort of MNOs? And then secondly, I think you made some comments around OPEX phasing within the year. So if you can maybe just clarify, what are those OPEX phasing elements that we need to bear in mind for this year? It sounds like you had some additional maintenance costs this quarter, which maybe don't recur later in the year. So if you can maybe just clarify. Thank you.

Yeah, thanks for the question, Jacob. On fixed wireless access, yeah, pricing is overall one-third of an MNO mobile device. In terms of trend, we do see the market soft right now with specific customers. We remain positive on the structural business and structural opportunity. So we do expect some recovery and coming back to more sustained level. Generally, I have to say half two is better than half one. So as I said, relatively soft right now. We do expect some improvement in half two. And structurally, we continue to see it in the opportunity in the market because the technology is a valid alternative to fiber. In broader terms, let me say that this conversation brings me also to other conversations last year, and it takes me to the point about the fact that we have multiple sources of revenues and multiple sources of tenants. So, for instance, in this quarter, we do see very good performance on the other customers, such as the utilities companies. is again a situation where we have the opportunity to compensate some low performance on one side with better performance on other sides. In this case, so volume-wise, it's good that we keep our trend at above more than 1,000 tenants with dollars per quarter. Clearly, we pay little bit the impact of price because the other customers have price per unit lower than fixed wireless access. So, yes.

Hi, Jacopo. As mentioned, OPEX in the quarter were discounting some phasing impact due to accelerated maintenance, but overall, On a regular basis we confirm our guidance in terms of EBITDA margin at 91%.

Got it. If I can maybe just ask a follow-up question just in terms of the sort of mix. So, I mean, from what you've described, you know, this quarter your new services growth grew quite a bit sequentially, first time in double digits, while your OLO revenues are sort of down, I think, for the second quarter in a row. Can you maybe just comment on what is the margin difference between those two revenue streams? So is there any margin effects that we should think about as perhaps the mix shifts a little bit away from OLO to new services?

Yes. On the OLOs, let me also highlight that The quarter-on-quarter trend is mostly driven by the other services, kind of installation, maintenance, project management. That's the more volatile bit where we have seen less potential, less business than last year that was quite high. In terms of mix between tenants and the new businesses, let me say that clearly new tenants on existing sites is the business line with the highest margin. Almost everything goes down to bottom line. When we develop new services, the margins are still high. and broadly in line with our EBITDA margin, actually higher than our average EBITDA margin. So clearly not as good as a new tenant from existing sites, but on the high side, it's still clearly quite high.

Thank you. That's very clear.

Welcome.

The next question is from Fabio Pavan. of Mediobanca. Please go ahead.

Yes, hi. Thank you for taking my question. I would love to go back to the new services in particular. I was surprised by the strong acceleration, the development of DAS in the quarter, which was super strong. Could you just provide some more color on this? It was in line with your expectation. which kind of number we should expect for the next few quarters. Thank you very much.

Yes, thanks, Fabio. The new businesses for us is a strategic priority. We strongly believe on the two legs of our growth plan. One is the macro grid, which will be complemented by micro grid. mostly indoor. In Italy there is a huge number of indoor locations which requires and deserves better indoor coverage. And we actually have been leading the market since the beginning. We are putting additional effort to capture this opportunity in verticals such as health and hospitals, education, travel and transportation. We have also strengthen the internal capabilities and the commercial resources, and this is delivering the results expected, and we do expect to accelerate further, coming, as I said, by the initiatives we put in place. And we are working with both the MNOs as final customers, as well as with the location owners which in some cases are so willing to improve the dock coverage that are also paying parties, so they are willing and open and happy to contribute or to pay for the service. In the strategy plan, we shared the goal to actually deliver by 2026 an amount of revenue which will be three times the 2022 revenues, which was 30 million. And we think we are on track and we are building all the capabilities and the trajectory to get to that level. Thank you.

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

Good afternoon, everybody. Three quick questions, if I may, from my side. The first is the topic of the rising of electromagnetic pollution limits still on the table or the political agenda or definitively out? The second, do you have some novelties about M&A dossier? Do you have something on your table? Something is changing on the market, so we could expect some small acquisition as you have in your business plan targets by the end. And finally, just a clarification about the HOLOS target. Is it correct that you expect to reach around 1,000 HOLOS in the second part of the year, or this is just a target in order to reach your growth of 2026 and will be probably later on. Thanks a lot.

Stefano, thanks for the question. On the EMF, yeah, no, the topic is still on the table, on the government. The government is well aware of the topic and, yeah, it's on the table. I would say actively on the table. Let's see. what will happen, difficult to make forecast, no clear visibility of the next steps, but yeah, I would say absolutely on the table. On the M&A, yeah, we constantly also assess small bolt-on, the opportunity to broaden the perimeter, to acquire thought of sites, And clearly we keep on looking at land and pot of land. So yeah, we monitor, we assess and we are open and we would like to make some small bolt-on to broaden quickly in a rapid manner our perimeters. With regard to the hollow and trends, we have the 1,000, sorry, I was before I probably made the mid-confusion. On the OLO, we have around rate of broadly 400, 500, 10 per quarter, and this is what we expect to keep to year-end. Thank you. Welcome.

The next question is from Usman Ghazi of . Please go ahead.

Hello. Thank you for the opportunity. I've got two questions, please. The first one is on tax. Obviously, you've highlighted that for the full year, you'll come in quite below the $35 million that you were planning at the start of the year. I can also see that in the cash flow, there's a $14 million kind of payment or advance payment made for the goodwill treatment. So I just, I just want to, sorry, for the goodwill tax prepayment. So I just wanted to check if, you know, if anything has changed with respect to your kind of, you know, tax outlook that you gave at the capital markets day, or is it that, you know, there's just a bit less tax in, in this year and there's going to be a catch-up in 2024. That was the first question. And then the second question was just going to the site additions that you've done, obviously a very strong number in Q2, and you're guiding to do 800 this year. I mean, if you keep this kind of run rate, you're probably a year ahead of of your site build-out targets that you gave at the CMD, right? So you'll probably be done well inside 2026. Is this possible, or do you expect that this year, for some reason, is a peak year, then things kind of begin to moderate back to normal levels next year?

Thank you. Yes, the 14 million are related to the Google Tax Team and are in line with our expectations, while the, let's say, the cash out for tax above the current cash flow are slightly below, lower than our expectations. So, we do expect this level to remain low

On your side, honestly, we are satisfied with the cruising speed we have achieved. Coup 2 is a strong quarter. Coup 1 was strong as well. Coup 4 last year was strong, so now we have really strong track record and delivery machine. Though we cannot yet say that we are ahead of plan. Hopefully, we will get there, because actually, just let me clarify, the 800 I did mention is a combination of the slightly less than 600 for the MSA, which we guided explicitly for, and the broadly 200 related to the other two programs, the Open Fiber and the Next Generation EU. is solid, is robust, we are very happy and overall in line with the business plan.

Right. Can I just clarify on the tax? So you're saying that this year is going to be 20 million and next year it will be similar or will there be this difference between what you had planned of 35 million versus the 20 million that you will pay this year that there will be a catch up of that in 2024?

We do expect, let's say, hopefully at 2023, we do expect about 20 million to be a fair assumption, but we do expect this amount to grow starting from next year.

Okay, thank you. You're welcome.

The next question is from Luigi Minerva of HSBC. Please go ahead.

Yes, good evening and thanks for taking my two questions. The first is a clarification on the 55 new sites from the other BTS programs. Should we model these with one tenancy ratio or some of them come with more than one tenant? And secondly, on capital allocation, obviously in this quarter you you reach five times leverage ratio. In the past, you mentioned consistently that a leverage ratio below five times is inefficient. So I just wanted to check whether that is still your assessment. And perhaps if you can remind us your capital allocation priorities once the leverage ratio falls farther. Thank you.

Yes. Hi, Luigi. On the 55, yeah, the tenancy ratio will be below two, something higher than one. The next generation EU funds will be broadly two. The others, the open fiber, will be at least at the beginning one. This is in terms of tenancy ratio. Let me say that the price for the revenue per unit will be consistent with the So in particular, the next generation EU funds, the price per unit will be lower than average. On the leverage, yeah, we clearly we set the threshold event for the leverage between 5 to 5.5 times in the overall framework of the capital allocation. The environment has not changed. We still think it's at a reasonable level. And as always, we will keep on being consistent with our capital allocation framework. So we will assess opportunity having as a first priority additional growth capex. Secondly, additional small acquisition, as we talked. We keep on monitoring on bigger acquisition if opportunity comes. Otherwise, we will consider the additional surrogate remuneration as we did the last year.

Thank you. Very clear. Thank you.

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

Thanks. Just wanted to kind of follow up on that last question on the new sites from the DTS program. Could you maybe also comment on obviously lower tenancy, but what are the day one returns on those new sites? And then also attached to that, were those new sites from BTS programs included in the long-term business plan you presented back in March?

Yeah, the next generation EU funds, there will be a subsidy on CapEx. So the returns will be in the range of 10%, slightly below 10%, although the return is related to the next capex. So we will see lower revenues than usual. And this is for the first 10 years. After 10 years, the sites clearly will remain in with ownership and then will be marketed at, let me see, at market, the standard market prices.

Okay, that's helpful. And then switching topics on the share buyback program, it looks like, I know we're early on, but you've been repurchasing a similar amount of shares each week. Is this something we should anticipate going forward, more of a systematic approach or Do you think there might be some variability in terms of your research activity?

Yeah, let me say that we followed, we decided the approach to assign the mandate to a broker, and so we are on this. Clearly, the framework is the nine-month period. What we do see is, yeah, it's a pace, it's a stable pace. We don't see any specific reason to see this change, but as I said, it's up to the broker.

Great. Thank you.

Welcome.

The next question is from Ben Rickett of New Street Research. Please go ahead.

Thank you for the questions. Two questions, please. Firstly, going back to the fixed wireless access demand, on slide seven you mentioned the structural demand tailwinds. I just wondered if you could provide some color as to what those tailwinds are. Is that rural fiber deployments or is it competition from Telecom Italia or any context there would be helpful. And then the second question following on from that, as you look forward to your OLO tenant net ads, how should we think about the mix there between fixed wallet access, MNOs and also other? I think in the past you've said fixed wallet access and other would be 80%. But how does that split between fixed-follow success and other? Thank you.

On fixed-follow success, we do see it as a valid, and the market sees it as a valid alternative to Fiverr. It's a business which has developed quite well, starting from the COVID days and is a business which has been driven by specific companies dedicated to this service, which developed it quite well and has been very well received by customers considering the nature of Italian territory and the number of places where fiber or high speed connectivity is not yet available. So it's a combination of technology as well as customer service, which has proven to be successful in Italy. And by the way, the technology keeps on improving also in terms of performance. Now, that's why we remain with a positive structural view. Having said that, we see in our numbers and we see the markets relatively soft, specifically with a couple of customers. But we do think it's more related to contingent specific situations. In terms of weeks, of all tenants, the MNOs component, which we know is the richest, has broadly a 15% weight. The remaining 80% plus is for the others, different from MNOs. And within these, in the last couple of quarters, broadly 50% has been related to other customers and 50% to fixed wireless access customers. Thank you.

The next question is from Georgios Yerodiakounou of Citi. Please go ahead.

Good afternoon, and thank you for taking my questions. The first one, Diego, is around the Gigabit Infrastructure Act. I know it's in draft stages at this point, but it will be interesting to get your reaction and opinions on it. I know some of the other TAR companies have been a bit critical of some of the recommendations within the draft. My second question is on working capital. André was asked earlier about this year, but I'm curious whether there could be inflows in the coming years as well, or whether it's something that just proves temporary for 2023. And if you can give us any indications as to what's driving that, it would be great. And then the final one is just a follow-up, also on the new sites for the non-anchors. You mentioned the initial tenancy ratios, and I'm guessing that these sites are available for others to collocate. Do you expect to see demand? How long do you think it would take before you see it? And I was also curious whether there's any restrictions in you making them available. Thank you.

On the Global Infrastructure Act, actually on the Gigabit Infrastructure Act, actually there was some areas of concerns in the first draft. We think that the following draft has gone in the right direction and we think that the potential concerns are I mean, we do see them basically addressed in the development, so at this stage for us it's not an area of concern. Also thinking about the spirit of the Act, which is actually to foster, to support the development of the connectivity and so the development of services which companies such as our entire companies do deliver. I go to the third one, which is related to the other BTS. Yeah, no, they are open. There is no restriction. Those are new programs, so we will see shortly. It's a little bit too early to comment. Yeah, we do expect other tenants as well, but let me comment with more details as soon as we understand a little bit better and we have a little more visibility.

Hi, George. Concerning your question about networking capital, we were expected to remain positive in 2023, but starting from 2024 to be in the, let's say, neutral to positive networking capital impact on cash flow. Thank you.

Very clear. Gentlemen, there are no more questions registered at this time.

Thank you everyone for connecting. Have a good day. Thank you.

Thank you. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.