Maire S.p.A.

Good afternoon. This is the Coral School Conference Operator. Welcome and thank you for joining the Maria Tecnamont 9-month 2022 Financial 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. Alessandro Bernini, CEO of Myra Technimont. Please go ahead, sir.

Good afternoon, everyone, and thank you for attending the nine months of 2022 financial results conference call. The first nine months of 2022 have shown a solid and growing financial performance as revenues and EBITDA have grown at double-digit rates versus the corresponding period last year. Our green energy business continues to grow at a significant pace, with revenues of €202 million up almost four times and a record backlog of about €1.2 billion, which has increased more almost five-fold over one year. This solid financial performance has been accompanied by a very strong cash flow generation of 213.6 million euros, which has led to an adjusted net cash of 65.3 million euros. This is the 10th consecutive quarter of improvement in the net financial position. Our 8 billion euros backlog of all the Russian projects that will no longer be included from now on continues to be extremely healthy and well diversified. And the group is not dependent on any single geography. A 2.8 backlog cover makes us confident about our immediate future. At the same time, our business drivers continue to remain solid as reflected in a commercial pipeline worth almost 54 billion euros, of which almost eight in green energy. In conclusion, we are successfully executing projects while energy transition is taking off. Our main consolidated financial results and KPIs are shown on page four and will be discussed in more detail later by Fabio in the presentation. Before we discuss our operational performance, we'd like to give you an update on our Russian projects. As communicated last July, no economic contribution was recorded in Q3, as projects were suspended in the course of the second quarter. Moreover, as the premises that led to the suspension have not changed over the last few months, projects have been or are in the process of being terminated. As a consequence, Amurskyschou and Tingishechou have been taken out of the backlog as of September 30, and the Russian backlog is now close to zero. Please note that all historical figures relating to the backlog presented in this document have been adjusted in order to exclude the Russian projects in order to facilitate the comparison on a life-for-life basis. Contractual conditions related to the terminations due to sanctions will be applied as customary. And finally, we confirm that the project financial position continues to remain in equilibrium as communicated throughout the year. And now let's analyze our operational performance. Our order intake up to the end of September was 1.6 billion euros. This year's intake has been extremely diversified both in terms of geographical locations, contract type, and business. This is thanks to a healthy commercial pipeline that continues to offer a variety of interesting prospects all over the world. Our increase in success in green energy is demonstrated by the fact that half of the entire nine months order intake is in this business line, a testament of the validity of our technological leadership in the energy transition. This has continued this month with over 450 million euros of new orders, leading to the overall total to date to about 2.1 billion euros. Based on the various ongoing tenders that we have submitted, we are fully confident to further increase this year's order intake and reach a book-to-bill ratio of at least one. Let's take a look now at the Rurder Bagel project in Algeria that we just announced a few hours ago. This morning we were awarded a $380 million FTC contract by Sonatrac. The project is related to the execution of a liquefied petroleum gas extraction plant inside the already existing Rudder Bagel oil and gas treatment complex situated in the northeastern Algeria. The project's scope of work entails the implementation of a new LPG extraction plant that once completed, we will have capacity to process 10 million metric standard cubic meters per day of associated gas coming from the existing facilities. The planned completion is scheduled within 36 months from the contract's effective date. The objective is to increase the LPG and condensate production of the existing gas treatment complex. The majority of the construction is expected to be performed by local subcontractors, representing a significant contribution to the in-country value development in the area. This is a very strategic project that reaffirms our track record with Sonatrack and confirms our leading position in gas monetization. As previously commented, the Russian projects have been taken out of the backlog in the course of this year. In particular, Amursky-2 and Kingis-2 have been removed in Q3, in addition to Amursky-1, which had already been taken out. In order to have a comparison on a life-for-life basis, however, we also adjusted the backlog data at the end of June by taking out the corresponding amount for the Russian projects. The result is a slight decrease of about 250 million euros. The decrease in hydrocarbons due to these adjustments, however, is almost fully compensated by an increase in the green energy backlog, thanks to the various energy transition projects which were acquired this year. Moreover, The order intake of the last couple of years has made the backlog even more geographically diversified than ever. We feel there is a good balance between the Middle East, our strongest historical area, and the other regions in the world, from Europe to Africa, Asia, and North America. Let's focus now on our two business units, starting from our core business. and the AP portion of the hydrocarbons backlog has remained relatively stable at over 600 million euro. This continues to contribute to the risking of our existing business, a very relevant factor in these volatile times. The backlog cover is 2.8 times, providing a very high visibility for the future. Moving on to the commercial opportunities in our core business, our pipeline has increased to 46.1 billion euros at the end of September, up 5.5 billion euros this year. The last quarter has seen a significant increase in new initiatives about to be tendered, driven by the resilience of our core business, strongly supported by powerful business drivers. Such a positive environment bodes well for our group's growth prospects in the years ahead. All the geographies where the group is active continues to remain extremely attractive. In particular, the Middle East continues to remain an area of incredible opportunities, driven by a new wave of downstream projects. At the same time, we are witnessing an increase in activity in North America driven by an abundance of gas as a feedstock for fertilizer plants as well as renewed investment in other gas monetization plays. Asia is also an area that continues to show significant potential. Our pipeline remains extremely strong and geographically diversified, continuing to provide solid support to future awards in the short and medium term. Let's move now to the green energy business unit and our efforts in the energy transition and sustainability. We continue to grow our green energy business, offering our clients sustainable solutions to enable them to successfully face the energy transition challenges. In this respect, half of the nine months of the intake is represented by energy transition projects, as we highlighted earlier in the presentation. We have been awarded contracts not only by historical clients, but also and especially by new customers. They are all working to transform their processes and their products in order to tackle the climate change challenge. We are particularly active in the area of low-carbon fertilizers and green hydrogen with several engineering and EPC awards across the globe. Biogas, sustainable aviation fuel, and second-generation ethanol are another area that we are actively pushing. also thanks to our international partnership. Last but not least, we are increasingly playing a relevant role in circular economy thanks to our unparalleled skills and competence. In this respect, let's take a closer look at the waste to hydrogen project in Rome, which is going to benefit from a significant EU grant that was just assigned to Mexico. We are extremely proud that NexChem has been assigned a 194 million euro grant for the development of a waste-to-hydrogen plant as a part of the IPCE Hydrogen to Use EU project, especially considering that only 500 million euros have been assigned to Italian projects overall. The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility. Thanks to the proprietary technology developed by NexCam, the plant will use 200,000 tons per year of non-recyclable solid waste as a feedstock to produce circular ethanol and circular hydrogen, the latter at a competitive cost compared to traditional hydrogen production for fossil fuels. The project will also contribute to the optimization of the waste trade treatment cycle in Rome through a conversion process that will significantly reduce total CO2 emissions. As a matter of fact, following the life cycle assessment approach which calculates CO2 emission from the raw material to the final use of the products, our waste to ethanol and hydrogen technology produces fuel Saving beyond 70% of greenhouse gas emissions compared with traditional processes and the hydrogen produced can be considered EU taxonomy aligned. NETSCAM is acting as the promoter of this important initiative. As such, We are actively having conversations with qualified leading industrial players and strategic infrastructure funds about the future equity structure, where we may consider retaining a minority investment. In the meantime, as announced last Monday, engineering design activities have been started, also including the award of the process design contract for the Citra ethanol unit. We will keep you updated on these exciting projects as developments will take place. All these significant and diversified new projects have translated into a sizable increase in the green energy backlog, which has gone up five times over the last 12 months to almost 1.2 billion euros. Such an increase has already translated to higher revenues and EBITDA, a trend that is expected to grow in the future. The backlog is widely diversified with projects spread equally between Europe, the Americas, and Asia. The other side of the coin of the green energy expansion is given by an increasing commercial pipeline. As of the end of last June, we were pursuing opportunities worth 7.7 billion euros, up to 1.1 billion this year. While Europe remains the target geography, we are experiencing an increase in opportunities in other areas, such as in Asia and in the Americas. I now hand over the microphone to Fabio, who will discuss our financial performance in more detail.

Thank you, Alessandro. Our nine-month revenues grew 22.6% to 2.5 billion euros. Such an increase is mainly due to last year's acquisitions starting to provide a positive contribution to our top line. Business profit was 214.3 million euros, up 14.2% thanks to the revenue increase. where 56.6 million euros, a decrease of about a million or 1.4%. This remarkable achievement is due to our continuous attention to cost improvements across our organization. As a result, the percentage of these expenses of the revenues has decreased from 2.8 to 2.2% over the last year. RMBs have increased by over 3% mainly driven by our green energy expansion. EBITDA was 151.5 million euros, up 22%, with a profitability of 6%, in line with the previous quarters and with this year's guidance. Net financial charges were 26.4 million euros and were mainly impacted by a higher derivative mark-to-market valuation, also related to the tools in place for the buyback of our own shares and by a marginal increase of the gross debt. Such a positive operating performance has led to a consolidated net income of 61.4 million euros, up 7.2%, and the group net income of 61 million euros, up about 1%. Moving on to the balance sheet, let's analyze the cash flow dynamics. our adjusted net financial position has improved for the 10th consecutive quarter and now stands at 65.3 million euros. Such an improvement has been driven by a significantly healthy cash flow generation of 213.6 million in the nine months as projects started to shift gears in the second quarter and delivered over 180 million euros of cash flows in the last two quarters. This positive cash generation more than compensated $60 million in dividends and $97 million in additional outflows due to taxes, net financial charges, capex, and acquisition of treasury shares. We expect this virtuous trend to continue in line with the guidance provided at the end of February. Let us now take a look at the working capital analysis. Working capital has improved by about 132 million euros to negative 137.8 million. Such an improvement has been mainly driven by the positive effects of projects' advancements on accounts receivables and payables and advances to suppliers. This graph is further proof of the ability of our projects to generate cash as well as the effectiveness of our working capital management. Please remember that our net working capital was positive 288.8 million euros at the end of March 2020. This implies an improvement of over 420 million euros in two and a half years. I now hand over the microphone to Alessandro for his concluding remarks. Alessandro.