Maire S.p.A.

Good afternoon. This is the Chorus Call Conference Operator. Welcome and thank you for joining the First Quarter 2023 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 Alessandro Bernini, Chief Executive Officer of Myra Technimont. Please go ahead.

Good afternoon to everyone, and thank you for joining Myra's first quarter 2023 financial results conference call. I am also pleased to have with me Fabio Fritelli, our CFO. Before looking at our operational and financial results, let me start from where we left on our capital market day, where we presented MIRE's 10-year industrial plan. Our current strategy approach is based on our position as enablers of the energy transition and intends an upgrade of our business model with a new organization based on two business units. The first one, Sustainable Technology Solutions, is the home for solutions designed to enable innovative and sustainable processes, offering technology licensing, high value added services, and proprietary equipment. By the nature of these activities, this business is characterized by lower volumes and higher profitability. The other business unit, Integrated Engineering and Construction Solutions, is the home for solutions to realize future-proof, technologically advanced plans thanks to our specialized know-how and world-class engineering expertise. As such, these businesses enjoy higher volumes and revenue visibility. A flexible and adaptable business model where technologies and ENC can be offered to our clients through an integrated approach but can also live independently. We have been deploying this strategy even before we announced it in early March and its effectiveness is already evident in the first quarter results. The quarter has shown robust performance, with revenues, EBITDA, and net income all growing double-digit vis-à-vis the corresponding period of last year. Similarly, we enjoyed a strong operating cash flow, which has led to an adjusted net cash position close to €95 million, in line with December 2022. The operating cash flow more than compensate the investments mainly related to the acquisition of Concert. Subsequently, in April, we finalized the acquisition of Myromono, owner of the Cat C technology. Both have significantly contributed to the expansion of our technology portfolio. Our €7.9 billion backlog, which as a reminder no longer encloses the Russian projects, continues to be healthy and well diversified, making us confident about our immediate future. Let's have a more detailed look at our operational performance. we were awarded in the first quarter were well spread across different geographical areas, mainly across Europe, Asia, and the Americas. As you know, the award timing during the year varies widely from quarter to quarter. In this respect, and based on the ongoing tenders we have submitted, we expect a much stronger second quarter and an equally strong second half, which will allow our group to reach a 2023 book-to-bid ratio of at least one per. Let's look at the operational performance of our business unit. The effectiveness of our strategic approach can be clearly seen in the strong order intake in our sustainable technology solution business unit. At 78 million euros, it represents a seven-fold increase versus the 2022 first quarter. The business unit backlog stands at close to 200 million, an increase of almost 40 million since the end of last year. The shorter cycle nature of this business is reflected by a backlog cover, which is at parity. From a geographical standpoint, the sustainable technology solutions backlog strengthened its exposure to Asia, also due to the recent award, the ultra-low energy urea plant in China, which we will see in more detail later on. Moving on to our integrated ENC business unit. Order intake of 225 million encompasses new awards related to feeds, which are characterized by high profitability and allow to get involved into the project since the early stages. Activities extensions of the carbon capture plant of Casal Borsetti in Italy. Change orders finalized with the clients on various projects. Our 7.7 billion backlog at the end of March provides a picture of our historical and longstanding exposure to Middle East and a good balance between the other regions in the world, from Europe to Africa, from Asia to the Americas. A backlog cover of 2.2 provides good visibility all the years ahead. representing a solid backbone of our business. Let's take a look now at the ultra-low energy urea award that has been granted to Stamicarbon. This is the largest ultra-low energy urea plant to be licensed in China by the group, and the scope of work encompasses licensing, process design package, and equipment supply. It has a design capacity of 3,950 metric tons per day and is the seventh plant globally based on Stanley Carbon's proprietary innovative design, which allows steam consumption to be reduced by about 35% and cooling water consumption by about 16% compared to traditional processes. This project strengthens our technological leadership in sustainable and energy efficient solutions and represents a fertile proof of Stanley Cardo's undisputable leadership in the Eurea licensing market where we enjoy a 60% market share. Moving to the select award for our integrated ENC solutions, a clear example of synergies and cross-fertilization across the two business units is provided by the carbon capture plant of Casal Borsetti. In December 2021, we were awarded engineering awards by ENI, And now we got the extension to ENC activities for the Ravenna carbon capture storage phase one. The plant would be able to separate the CO2 from emissions from the natural gas plant's turbo compressor, purifying and compressing them, thus allowing the capture of about 25,000 tons per year of carbon dioxide, which would otherwise be released into the atmosphere. The technology used for the capture of CO2 in emission gases operates at high efficiency and low power consumption, even at low concentrations. It has already been widely used to capture emissions of hard-to-abate industrial sectors worldwide. Moving on to the group's commercial pipeline, we are pursuing opportunities worth over €54 billion. We continue to see a healthy set of attractive projects, driven by the resilience of our core business and supported by clients' willingness to invest in energy infrastructures and technologies for the transformation of natural resources. Such a positive environment bodes well for our group's growth prospects in the year ahead. The effectiveness of our integrated approach is further demonstrated by the amount of potential opportunities originated by our sustainable technology solution business at over $10 billion, or 20% of the total pipeline. As we continue to develop our integrated strategic approach, we are confident to increase this set of high-value added opportunities, further increasing our technological leadership. With reference to the integrated ENCs opportunities, given the increasing size of large projects and the FEC consortia generally selected, The timing for the final investment decision requires more time compared to the past. Our commercial efforts are also widely diversified across key geographies, and all the regions where the group is active continue to remain extremely attractive. In particular, the Middle East is one of the areas where we see potential new awards in due course. Asia is also an area that continues to show significant opportunities. Before we move to our financial results, I would like to focus on the expansion of our technology proprietary portfolio as we recently completed two important acquisitions, CONSER and CAT-C. CONSER is a technology licensor and process engineering design company which owns an extremely strong portfolio of technology patents dedicated to the added value specialty chemical processes, including cost-effective and process-flexible technologies for the production of biodegradable plastic monomers. Conser's leadership position is demonstrated by its 50% plus market share in China, a country that has shown significant potential over the last few years due to their ban of non-biodegradable plastic for single-use products announced in January 2020. Furthermore, we expect to significantly grow concert business by leveraging on the group's commercial capabilities to penetrate new markets and by expanding its offering to proprietary equipment and catalysts. The strategic value of this acquisition is also based on a growing demand for bioplastic products, which is expected to increase at an annual growth rate of 7% up to 2050 and quadruplicate in this decade alone. The deployment of our technology strategy as of today was not limited only to CONSERV. As we completed also the acquisition of the CAT-C technology, which has now been transferred to a newly established company named Mairemono, which we control with a 51% stake. CAT-C is a depolymeration depolymerization technology which allows to recover high-curity monomers from sorted plastic waste. It was tested on Plexiglas in its proprietary demonstration plant with outstanding results, a 95% conversion rate. This process is expected to be extended to other value-added plastics, including the depolymerization of polystyrene and widely used plastic with numerous industrial applications from food packaging to electronic and automotive. We want to scale up and industrialize this technology while developing a commercial offering which will encompass licensing, process engineering, and proprietary equipment to be able to generate a double-digit profitability going forward. Our strong commitment to sustainability is not focused on green technologies only, but is a 360-degree responsible approach, embracing all the areas in which we operate, recognized by the various ESG ratings assigned to our group. Our ESG roadmap centered around environmental sustainability, the value of our people and of the territories where we operate, and the innovation which relies on our technological DNA has been deployed in an extensive set of initiatives to be pursued this year. Our net zero task force is implementing a vertically focused action plan aimed at reducing the emissions generated within our organization. We are strengthening training in health and safety, as well as the action plan of our diversity, equality, and inclusion work group. Our sustainable, unsustainable innovation, so-called innovability, we are focused on reaching up the 24 cooperation agreements with universities all over the world. We are also strongly committed to developing a sustainable supply chain, expecting over two-thirds of expenditure from ESG screened suppliers, as well as to keep creating values in the territories in which we operate with a number of CSR projects for local communities. Last but not least, We are heavily promoting training on business integrity, as we have included ESG targets in our NGOs and long-term incentive schemes. I will now hand over to Fabio for his review of the first quarter financial results. Please, Fabio.

Thank you. Thank you, Fabio.

Our financial results show double-digit growth across all main KPIs. starting from revenues of €958 million, with an increase close to 32% year-on-year, and driven by project execution. GNAs were €18.8 million, or 2% of revenues, versus 2.6% at the end of March 2022, thanks to our continuous attention to these items. EBITDA was €58 million, up about 33%, thanks to higher revenues and inefficient management of the structural costs. Margin was 6.1% in line with 2022 and within the 2023 guidance. Net financial charges were 8.4 million compared to 6.3 million in the previous quarter. The first quarter of 2023 was negatively affected by the net valuation of derivative contracts and the increased interest rates on the portion of floating rate debt, partially offset by higher financial income. Such a positive operating performance has led to a consolidated net income of $26.2 million, up almost 47%. Let's analyze the financial results by business unit. Sustainable technology solution revenues were 56.5 million euros, thanks to the constant growth recorded in the technological agreements and solutions to support the energy transition worldwide. As a reminder, the Q1 2023 figures include concepts. was 11.8 million at 56.3% as a result of higher volumes and with margin of 20.9%. Moving on to integrated EMC solutions, revenues were over 900 million euros, up about 31%, thanks to the project progress so a state is able to generate higher volumes. We did that with 46.2 million euro, up about 28%, with a margin of 5.1%, substantial increase. Moving on to the balance sheet, let's analyze the cash flow dynamics. Our Q1-adjusted net financial position has improved once again on sequential quarter basis to 94.6 million euro. The operating cash during the first quarter more than compensated cash, which amounted to a gross value of 41 million euros, including 35.8 million euros related to the acquisition of concert, which had a cash absorption of about around 19 million net of the 17 million euro cash available in the company. The remaining part of around 5 million euro was related to recovering capex to support projects, digital innovation, and R&D. Let us now take a look at the working capital dynamics. Turning to net working capital, we close the quarter with a negative figure of 71 million euros. You should remember that each quarter has its own dynamics in terms of working capital. depending on specific events taking place in the period on the stages reached by the various projects. In Q1, the difference with 2022 year-end is due to advancements mainly related to large projects, in particular, the $3.5 billion project Burush-4 in the UAE and the $1.5 billion project Port Harcourt in Nigeria. This impact has been partially upset by accounts receivable which had a cash in of 55 million euro which helped to maintain a negative working capital trend.

I now hand over to Alessandro for his closing remarks. Alessandro.

Thank you. Thank you Fabio. But before concluding let me take a moment to highlight the advantages of our integrated business model which leveraging on our DNA has recently evolved once again to face and anticipate developments in the external environment. Our technological platform, to be further strengthened with the ongoing expansion of our portfolio, is pivotal in placing MIRE at the forefront of the energy transition, enabling us to reach new clients and generating high margins in the short cycle. Our well-established world-class capability of executing complex multi-year projects and the know-how to successfully apply our technologies will drive the growth in our traditional markets, generating high volumes and providing revenue visibility. Two activities strictly interrelated among each other. in order to leverage cross-fertilization of ideas and synergies under the same group. This integrated approach will represent a competitive advantage to create value in the long term and deliver the significant growth envisaged in the 10-year strategic plan recently announced. Coming in detail to 2023 performance, our first quarter results confirmed the soundness of this strategy. Our backlog provides a solid foundation to future revenues, confirming our expectations of a double-digit growth in 2023. Margin expansions will be supported by our recognized know-how and technological solutions and expertise. Capital expenditures will be according to our plans, and will be mainly dedicated to expand our technology portfolio to foster future growth. Investments are expected to be covered by the operating cash flow in line with our usual financial discipline. At the same time, our strong and growing commercial pipeline will continue to deliver new projects. All that said, we reconfirm our guidance. that was communicated to the market on the 3rd of March. And this concludes our presentation. I stand ready to answer any questions you might have with Fabio. Operators, please go ahead.

Excuse me, this is the Chorus Call 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 touchtone telephone. To remove yourself from the question queue, please press star and 2. We kindly ask to use answers when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Marco Cristofori of Intesa San Paolo. Please go ahead.

Good afternoon, everyone. My first question is on the possible impact of the dropping oil price both days and also lower refining margin and gas price. In other words, don't you see the risk that some of your clients can postpone investment in downstream due to the current low visibility on oil price evolution and potential slowdown of a growing China, which seems to me the main problem at the moment. And my second question, if I may, is on S.P.S. and potential new acquisition. You guided for capex of 70 million, 70 to 80 million for S.P.S., so it seems that there is some room to finalize further acquisition ahead. Thank you for your question. For sure, oil prices, we have several times

repeated that since we are not exposed to upstream activities, but we are predominantly or even more exclusively engaged in downstream activities or midstream activities, we are not really exposed to the oil price fluctuations.

And also because

Most of our commercial pipeline and the opportunities that we have targeted and we are trying to transform into new orders in the short term are predominantly based on the transformation of natural gas. Natural gas is a natural resource which is also friendly from an environmental standpoint. We are not experiencing any lowering in the context of understanding the prospective context of the various clients. All the projects that were already sanctioned by the various clients that we are targeting remains and there are no significant delay. For sure, most of the projects which are on stream now are supergiant projects, so multi-billionaire projects, and before taking the final investment decision, the clients are taking some more time. But this doesn't mean that they are revising their capex spending or are delaying or cancelling projects. All the projects that we are targeting are still alive and remain without any major delay or variation. So as far as, you know, the projects and the opportunities that we are targeting, in particular in our ENC projects, integrated business unit, integrated ENC solution business unit, we are not facing any particular modification compared to what we were expecting a few months ago. For sure, I repeat, we are talking about multi-billionaire projects or, however, projects which approximate a billion each one, So the client, before sanctioning definitively the investment, for sure wants to analyze in more detail the various situations which can be faced moving forward. So they need some more time. But all of them remain absolutely alive, and for this reason we are really confident to be awarded new projects in the very, very short term. Then, as far as the targets in the technological division, more technological division, we have in front of us opportunities which predominantly rely on the values, in particular on some clusters of our technological activities. For sure, the green ammonia is the most significant cluster of activities which we are pursuing. We are starting from green hydrogen and then green ammonia. These are the two situations in particular domiciliated in Europe which we are looking for. Some of them are already in an advanced stage. In the others, we have already been engaged for the feed and to provide the client with the engineering services. So we expect them to be able to convert, to proceed with this project moving forward. But, you know, when the project will move into the FPC contract, these, of course, will not... create the benefit for the S.p.S. division, but we are talking about the cross-fertilization, which will create the benefit for the integrated ENC division. For as far as the S.p.S., which we call the technological division, For sure we are continuing in the development of the project for the waste to X, so waste to chemical, and the waste to methanol, waste to syngas, the project that we are executing in Italy. And we have already other opportunities still located in Italy which we expect to convert into real contracts very soon. So these, more or less, are the opportunities that we are looking for. I think that the specific question Martin found right was on capex on STX. You were mentioning that we have planned approximately 80 million, 70 to 80 million capex in 2023. We have already done a portion of it. Yes, we have targets on the acquisition side as well. We have also made clear that the path forward could be through further acquisitions, as we have done for Concert and CACI, but could also be achieved through strategic partnerships, which give us exclusive rights. So we will maintain some flexibility in this respect, but the answer to your question is that, yes, the targets have already been The first question will be related to one large opportunity that has been mentioned recently.

Over the past months, El and Geisha in Abu Dhabi, you have been preselected with Technip in terms of engineering, design, etc. And there has been some press information over the last weekend saying that Adnok wanted to restart to zero and to basically open the bids to new players, etc. So I was wondering if you can give us some callouts around Ellen Geisha, if it's still an opportunity for you in 2023, or if we should assume that basically this is an opportunity that is postponed for the coming years. That would be the first question. And the second question is related to the working capital movement. How should we consider basically the evolution in the coming quarters with those two big projects that you mentioned during the presentation, Bourouge and Paul Harcourt that will continue to move into procurement construction. How should we think about the movement in the coming quarters, please?

Okay, as far as Heilengasch is concerned, of course, I can answer as far as the onshore package is concerned because, of course, The development of the Highland Gas Project involves a much wider scope of work, including offshore works as well as the realization of a couple of artificial islands, four artificial islands, which for sure was not in the scope of work to which we have paid our attention. in association with Teknip and Samsung. But let me remember a little bit of the story of this project, which dates back to 2019, when AdMob, in association with other international energy companies, has decided to engage Bechtel to realize for the first time the feed for the development of this project. Then, apparently the client Adnok was not satisfied about the information provided by Bechtel and in November 2021 appointed PICNIP to proceed with a revision of the original feed with aiming at obtaining an optimization in particular of the original CAPEX which was estimated by DECTEL. Then, as a consequence of the feed which was concluded by TECNIP in January 2023, ourself in association with TECNIP and Samsung we have been awarded some preliminary construction works which based on the original intention this should have lead them to the real APC project. But now the client has decided to change the approach. Basically, apparently the client is no longer interested to proceed with an open book cost estimate approach, but is more interested to proceed with a traditional lump sum scheme, and for this reason has decided to open the project to a much wider range of contractors, which we know the invitation to bid has been recently raised. Of course, we are talking about a supergiant project, even limiting the discussion about the onshore portion of the total development. And we do not believe that many contractors can play and can release their services for the execution of this project. For sure, what I can say is that having had the possibility to enter into a lot of details of these projects when executing the preliminary construction works. We have, of course, retained a lot of details. We know very well the scope of work. We have already concluded also a market analysis by already producing, generating very in-depth analysis of the supply chain, including as well the first contact with the construction companies which can take care about the construction activities. And we do not believe that there are many other competitor contractors which can do this type of activity. So, of course, now we are waiting for the decision of the clients. For sure, Our intention is to continue to demonstrate our interest to participate to the bid. For sure, based on the present knowledge, it is, of course, natural to estimate a postponement of the award of the EPC contract, which originally was expected in the first part of this year, but now Due to the new approach adopted by the client, it is reasonable to expect that the final investment decision will take place only probably in the second half or the late portion of this year. But based on our knowledge, the client, of course, wants to continue with the development of the project because at the end, the 1.5 billion cubic feet of natural gas is almost mandatory for the development, the industrial development of ADNOC. So it is just a delay, but it is natural when talking about a project which in aggregate, in aggregate, but probably you already went through the news, the certain news which has been published works well in excess of $16 billion. So for sure, for a project of this size, it is quite natural that the client wants to retain some more time before taking the final investment decision. However, just to confirm that we maintain our commitment, our interest, Of course, we are working hardly in order to maintain and to propose a very efficient proposal, which will be released in the next few weeks. As far as the working capital is concerned, you are rightly saying that this is mostly attributable to the two major projects under execution, which have had a substantial contribution to revenues in the current quarter. And if your question was, are we going to see a cash flow, sorry, a contribution in the following quarter, so a normalization of the working capital, the answer is yes. We expect clearly to have a contribution already starting this quarter. Okay. Understood. Thanks.

The next question is from Roberto Ranieri with CFEL. Please go ahead.

Yes, good afternoon, everyone. Thanks for the presentation and for taking my questions. My questions are basically two questions. The first one is specifically on the project for the ATO refining in Nigeria, so I'm basically interested in how this project is going on. And in addition to that, I'm wondering if this project could be part of your track record and open additional opportunities for you in this field. There is a lot of interest in this kind of project from different operators. I'm wondering if this could be an interesting market for Myra. My second question is on that. Just a very simple, just to remind us what the variable that is a fixed rate component Just one second.

Roberto, for sure we have well understood the first question, but I'm afraid that then after my answer with reference to Nigeria, unfortunately, you will have to repeat your question. But now, talking about Nigeria, Nigeria, you know, the scope of work is not the usual one because we are talking about revamping. So revamping It is for sure we did our best in order to identify at the beginning of the project what should have been replaced in order then to deliver at the end of the revamping a very efficient refining unit. But you know that Some something is can be discovered only during the project execution when you enter into the unit. When you look at the equipment, you open the various equipment and then only then you are able to verify if your original estimate are correct or it is necessary to replace something else. For this reason, of course, as far as The work with reference to the original lump sum amount which refers to the project, to the activities which were estimated at the beginning of the project, these are progressing, progressing well, of course. But, of course, during the project execution we have identified some additional works which will require, for sure, some more time because You know, when you have to place the orders for the additional material which is requested to proceed with the project, of course, the supply chain requires some additional times. And for this delay, and for this reason, the original deadline for the commencement of the activities or what is defined here Area 5, which is the area which is able to deliver diesel, has been postponed by a few months, because basically it is the time which is necessary to wait for the delivery of the additional material at site. Then, apart from these unpredictable events, unpredictable at the beginning of the projects, Everything is progressing in line with the schedule. Then we have noted in some newspaper that someone is questioning about the possibility to monetize our activities, but it is, I believe, extremely unreasonable because the client has already flown into an escrow account dedicated to this project an amount which is more than enough to satisfy the next three milestones of the project, which means at least the next year and a half of activities. So we are absolutely not worried. Everything has been granted. The payment for the work done so far has been monetized in due time. So for sure, Nigeria is and is due to remain a very promising country for our business. both in the traditional space as well as in the green space because we have been made aware by some local clients, the national oil company as well as some privately owned entities in association with international investors that also some projects in the green space like green ammonia or carbon capture will be sanctioned very soon. We are very well positioned because basically today we are one of the most reputable operators, international contractors operating in the region. So we believe that very soon there could be also other very, very interesting opportunities in particular in Nigeria, but not only in Nigeria because of course we are monitoring the situation also in the neighbor countries like Angola, of course Ghana, Congo all of them are areas which countries which are dedicating a significant amount of their annual spending in the transformation of gas so for sure when dealing about the transformation of natural gas of course you know very well that we are one of the key players so for sure we are very well positioned being there to be one of the key players in the month ahead for the new opportunities. Then, unfortunately, Roberto, I ask you kindly to repeat your second question.

My second question is very simple. I'd just like to understand what sensitivity you have Sorry, the line is very bad. Sensitivities of what? S.p.A. S.p.A. S.p.A. S.p.A. interest rate or there is any floating component on the other interest rate. Interest rate, correct.

And, Roberto, apologies, but the line is really bad. But if your question is on interest rate, we all got it on the impact we are having on interest rates?

Yes, there is an impact on the interest rate. on the interest rate increase scenario.

All right, okay. Let me take on this. First of all, the impact we are currently experiencing on interest rate increase on our own liabilities is fairly limited because we have a portion of the debt which is hedged and we also benefit from active interest rates on our deposits, which help a lot in compensating interest rates that we have to pay. If your question is broader and is the consequences on the investment decisions of our clients because of higher interest rates, I guess, is this also part of your question?

No, no, no. I'm really interested on the impact on your EML from the interstates .

Then let me complete the answer. Then on our own liabilities, we expect to be able to show up the increasing interest rates, which will definitely have an impact with the contribution of interest rates on our deposits, which is already happening. Clearly, we will have to renew some of our debt and liabilities in the next year, so we hope that we will be able to enjoy milder financial markets next year, but for this year, I would say that we are quite quite covered by the hedging tools we have and the coverage provided by active interest rates.

Okay. Thank you very much. Thank you.

The next question is from Massimo Bonisoli with Equita. Please go ahead.

Good evening, Alessandro and Fabio. I hope you hear me well. I have two questions, one on your guidance Since we are already in May, if you can provide some color on the guidance range, which is pretty wide both for volumes and for margin. If you see the top of the range or the bottom of the range now more likely, just to understand how you see the evolution over the coming quarter. And the second question is on Casal Borsetti. Assuming there would be a commercial phase, since this is the startup phase or the test phase. In the commercial phase, how would you split your revenues between the two divisions, so SPS and EMC? And maybe if you can give us also some color on the value of the commercial phase if you are willing to provide it. Thank you.

Yeah, just one second.

Well, Massimo, of course I believe that what we have already delivered in the first quarter can be considered a reasonable proxy of what then we expect to generate over 2023, which means that considering that in the first quarter we have generated more or less 960 million revenues, You know, multiplying by four, it is something which should approximate four billion. Of course, this will depend, and we have lots of space to improve these volumes. to the extent we will be able to confirm the awards that we expect to get in the short term. So, you know, at least I believe that between the 3.8 to 4.2, which is the guidance that we have provided, based on our latest estimate, this for sure should be a little bit in excess of 4 billion euros. This is what I can say Now, we are still at the beginning of the year, but this is the situation. Then, as far as the project, the carbon capture project that we are executing in the Adriatic Sea, in the Casal Borsetti, the portion which affects the services which then... had been, not then, had been already reported in the sustainable technology solution is something which has been reported last year because the highly technological services which was part of the first phase of this project because I don't know if you remember that we have been awarded this project in 2021. And the first phase was relating to the highly technological services plus the technology which was necessary to proceed with the project, which was in the region of something close to 12 million euro. And this is an amount which has been already accounted for in the recent past. Now the project is moved into the APC phase, which now worth something close to 40 million euro and these activities which will be part of the integrated ENT solution because we are talking about the realization by infrastructure which is due to capture the CO2 and then to inflate the CO2 after having been compressed into an exhausted well in the Adriatic Sea. So all in all, we are talking about a project which in aggregate worth something close to 60 million euro, whereby more or less 15 has been already part of the P&L of the previous years, whilst the residual portion will be part of the integrated ESP solutions for 2023 and the portion of 2024. I was more interested in the potential future project that you maybe will be awarded of a new project in the S.p.A. for D&I, how much can be in that case part of the S.p.A. provision? So just on the future project rather than the test phase which I don't know if you can speak louder, Massimo, or close to the microphone, I don't know, because otherwise we are not able to understand, unfortunately. I don't know if it is the peculiarity of today, or I don't know, but unfortunately we have not understood. Can you hear me now? Yes. Now just to understand better the potential of a new award for a commercial phase of the CCS close to Venice, close to Ravenna. This was the Casal Borsetti one was the test phase. Just to understand the eventual value for SPS of a commercial phase project for CCS in the Adriatic Sea. In particular, Massimo, if I well understood your question, When paying attention to a project in the CO2 capture environment, of course, both business units, as you have correctly stated, are interested. Basically, the sustainable technology solutions took part of the first level of activities by providing the client with the technology, of course, with the license of the technology, which, by the way, for the time being, we sublicense the Mitsubishi license because for the time being, we are using the technology retained by Mitsubishi. But at the same time, we are developing our own technology which we expect to be able to approach the market in the second half of this year with our own technology. So for sure, moving forward on top of the license package there will be also the process design package and these two activities will be retained by the sustainable technology solution business unit then as soon as the project moves from let me say the technological phase into the execution phase so When it is necessary to realize the infrastructure, this is the scope of work which normally is served by the integrated ESC solution. So on average, you can say that more or less 20% of the total value of the project can be served and retained by ESC. The next question is from Emanuele Negri with Mediobanca. Good afternoon and thanks for the presentation and for taking my question. I have two questions.

The first one is on the ordering case.

You confer to have as a target one times the book-to-deal ratio for the full year 2023. And considering the fact that Europe was the main contributor for the first quarter, where do you see the main opportunities in the short term for taking and for having new awards? And the second one is on the hydrogen value project in Rome, if you have any update on this front. Thank you.

Okay, let me take on this for, let me go on the second question, and then we'll get back to the order intake in the short time. As for ROMA, the project is proceeding. We, as you know, we have been granted a grant, apologies for the repetition, whose first portion will be released before the summer in July. It is going to account for 20% of the grant itself. It will be used to cover the expenses to date and the development of the pilot plant which is part of the project itself. So in a way it's proceeding. We have identified the area where the project will be located and activities are proceeding according to schedule. And as for the first question, first of all, let me confirm that globally in 2023, we expect to be able to get new projects as a group, so regardless of the division, in excess of the amount of the turnover that we expect to deliver all over the year. So we are talking about something in excess of €4 billion. Where they come from? For sure, Middle East is the region which is due to serve the most significant portion of the awards that we expect to get. Some of them, one is very important, we expect to finalize it very, very soon, for sure in the second quarter. And let me define it as a sort of giant project located in the Gulf area. Immediately after and even again in the second quarter, we expect to finalize another project which relates to the gas treatment, the gas processing plant in the North Africa, in the North African region. In aggregate, these two projects will boost significantly our backlog by the end of the second quarter. Then, for sure, some projects which originally were expected to be awarded in the first part of the year, then due to the decision of the client to call on board other partners, then the timing for the award has been a little bit delayed. The projects are there, of course, but due to the decision of the client, which has preferred, has preferred, because we are not talking just one client, but more than one client, has preferred to team up with other international energy companies, the timing has been postponed a little bit. But they have declared that everything must be closed within the end of the year because before the close of December 2023, the activities must be already online. So just to say that in the very short term, you will appreciate a huge award Then another one, very important, not of the same size again in the second quarter, so within the end of June. And then the rest will be predominantly concentrated in the fourth quarter of 2023. In aggregate, as a geography, we are still talking about predominantly about Middle East, so the Gulf area. Again, North Africa, you know that we are very active in Algeria as well as in Egypt. And then there are also other prospects which are due to be transformed into new awards also in Europe. Namely, we are paying attention to projects which are in a very advanced stage of negotiation in Poland. another one in Romania, as well as in Spain and Portugal. So just to say that we are very confident and optimistic about the possibility to beat the awards, the record that has been reached a couple of years ago, and because this year we are really confident that there could be a very record year in terms of human work.

Thank you, very clear.

The next question is a follow-up of Roberto Ranieri with Stifel. Please go ahead.

Yes, thank you. A very quick follow-up on the opportunities in the near future. ABNOC announced a CapEx plan of around $150 billion always around 15 to 20 in the green, in the energy transition and green technologies. Are you, are you, you know, do you think you will be part of this tender in the future and if you look at the, if we look at the relationship with Arnok, I would say that This could be, in my opinion, very likely. In addition to that, I would like to know if there is a timing in this tendering and if these tenders or opportunities are already included in your commercial pipeline. Thank you very much.

Roberto, first of all, very interesting question because it is for sure represent what you have mentioned, one of our major elements of attraction and interest in that part of the world. Of course, we are there in the United Arab Emirates, in Abu Dhabi. ADDOC for sure is one, today is our most important client, but As you have stated, moving forward will not be our client only in what can define the traditional space because, as you have correctly stated, it is its intention to launch very soon a number of projects in the green space, predominantly in the hydrogen space and the CO2 capture. We have already one of them which relates to the CO2 recovery is already on stream. We have already submitted our proposal which, based on our knowledge and what the client, potential client so far, has notified us that they want to take the final investment decision immediately after the summer season, so which means more or less August or September. I believe that we are very well positioned for this project and for the time being is the only one which is on stream. The next projects which I repeat predominantly relate to the hydrogen production from renewable sources as well as additional projects in the CO2 capture are due to come on stream probably within June, July. Of course, we are there. We have been also recently in the public domain. I don't know if you have the possibility to go through the news published by Mead, but Meyer Tecumseh is the first player in Abu Dhabi in terms of size, in terms of appreciation of the client. So I believe that we have... all the characteristics to be one of the significant players to serve AdMob also in the green space. By the way, we are dialoguing with AdMob not just as far as projects already on the line or projects which are due to come on stream very soon, but we are discussing with the technological team of AdMob in order to verify if our technologies can serve the program of decarbonization of ADMOC group in the various forms that we are able to serve. So just to say that the intention of ADMOC is not just to find a contractor for the project execution, it is also its willingness to find out a partner to which to provide a technological solution and able to explore the possibility to develop together also some new solutions. Of course, we are extremely interested and delighted to became a partner of our group, of course, to the extent we decided in such a direction, but dialogue are already ongoing so far. So it is one, I repeat, one of the most exciting situations that we are facing so far.

Thank you very much, Mr. Sandro. Very helpful.

Mr. Bernini, there are no more questions registered at this time.

Thank you. Thank you to everybody. Bye.