Prysmian S.P.A. Ord

with an EBITDA that hit 527 million EBITDA, nearly lost well ahead of last year, even if you consider the 95 million stopper limit due to the anchor wire consolidation in the quarter of 2025. The angular margin, which you see at the temple one, is reported according to the standard metal prices so far. Those are the metal prices based on the average of metal, copper, aluminum, and lead processing in the 10 years preceding the 2019, which you know very well because they are only reported in the appendix of the anatomy school. The organic rot was fantastic, 5% reduction, certainly driven by transmission, but also supported by stability in ANC, in Dahlgren, and not in the digital solution. 3K slow, also outstanding at 1 billion euro for the last 12 months. ESG performance and language reputation, minus 37 risk of 1 in 2 reduction versus the baseline. I remind you that our target for 2025 is to achieve at least 38%, so a very long track to achieve it. Net-zero is confirmed accelerated by the end of 2035. Revenue links to solutions sustainable with IS43, and we have a significant improvement in the recycled content of copper and recycled content of material, with this 19% trend adjustment up on the average of last year, thanks to a significant availability of the copper waste in our west perimeter, which Anchor Wire took advantage of. Relative transmission, I mean, all KPIs are super great and super satisfactory. The organic growth in particular is 60% never been that high. It is certainly driven by some extra activity, not necessarily coming from the extra capacity. We had only additional capacity in terms of one installation method, Mona Lisa, that joined our fleet at the beginning of this year. But as far as manufacturing goes, we are never like the same as last year. The incapacity improvement will happen in a certain part of this 2025. Indoor-wise, there is a significant surge from $16 million to $154 million. It will be the margin from $13 million to $16.9 million. Talking about current net-of-prices, you see the margin underneath the bar chart, we are at the firm of 16.6%, which is already itself ahead of what we committed to achieving in 2025. The 16.9 is sustainable? Yes, it is super sustainable. We will end up at the end of this year with a margin slightly ahead of the 17% plus for the full year. The important phrasing for the data includes the 16 million is on the one end, We really had this quarter an impeccable execution. During the installation and manufacturing activity, we benefited from projects with better margin than last year. Last year, on the contrary, we had some more cost-of-avance that hit particularly badly in Q1 2024. Sequentially, you see, despite this is not supposed to be the strongest quarter in the transmission space, quarter 1.25, sequentially we also had both in absolute EBITDA and the margin terms, we had a quarter 4.24. The backlog remained pretty high, 17 billion. We count on some additions that we should see this year, coming from IPTA, from agreement, international agreement. But in Butter 2, Butter 3, we'll see what will happen with regard to.

Parallel, we are pretty flattish.

It's like a time in, I've got a growth more related to the tax compensation rate, quote, one last year. We also have to account for some bad weather impacts in the thermos U.S. footprint in quarter one, which also affected the IEC business. And there is some right-of-sea situation within the U.S. space, given the current tariff and dynamic happening in the markets. But it is always now in line with quarter one, 24, in terms of even a margin of I think here is a way where you can best appreciate the more effective way to read the profitability. If you look inside of our chart, you see an improvement in a bit of margin at standard level prices from 14.8.24 to 15.2. If you look at, on the other hand, at the current meta prices, they are moved from 35 to 38K. So these are the effects of dilution in the quarter of 2025 due to the incremental value of metal in our revenue. So that's why the standard margins are the best to appreciate the real inherent and genuine profitability of the business. In sequential, we confirm profitability and stability, 15.4 or 15.2, and also stability in EBITDA, in EBITDA absolute value.

Graphical Stations, also very critical strategy in terms of organic roads.

The E-comparison here over here is a bit difficult to appreciate because square root of 9.24 is without roads, without ANCO. while the $173 million of $425 million are with ANCO. But if you normalize ANCO and you consider Proforma, $424 million, you should read $114 million as $208 million. So we confirm that there are $34 million below $424 million Proforma. All of those $34 million belong to January and February U.S. March, the situation is completely different. The video margin has significantly improved, for the point that we can also anticipate of shall we do what April looks like April margins are well on track, back at the level of 15% which worked in the first quarter of the acquisition. So yes, the situation seems to have been resolved. There was a runoff impact due to the bad weather, due to the surge in data prices, due to the weakness of the market has seen the yield of different competitors, March has reserved the previous trend in April, as I've said, probably one of the best March ever in the alcohol dietary meta in the city of America. Specialties, so initially we saw significant improvement, 59 million, quarter flow 24, down to 74 million, Paying around a standard metal price, growing a couple of points. Year-over-year, we are still down, the strong quarter line that we had last year, and we are also, I mean, comparison, quarter two, quarter two is still going to be strong, but the $74 million per round 25 is taking away from some growth in quarter two and the coming quarters.

Digital solution finding a significant improvement.

Digital solution organic growth possible 3.4% year-over-year, 32 million turning to 42. Average margin significantly improved from 10.8 to 13.2. We are still not benefited from the pricing recovery in the market, or we have some mild pricing recovery in our background. But in the order of intake of this month, of this week, we see significant high level of prices, which we will turn into revenue in quarter two, quarter three, and over. The market is super strong in the United States. So the money that we are struggling with our local capacity, we are complementing our local output. with imports from different places to maintain our shadow wallets with our amazing customers and further the non-growth in the market. As said before, there is significant improvement in the circular economy KPIs. Climate Ambition on track to deliver the 30% target for 2020. and the social emission is in the right position and also 25% in the capital market angles.

Let me move to Francesco for the financial insight.

Thank you Massimo and good morning to everybody. The usual recap of our profit and loss revenues reached almost 4.8 billion of course including The change of perimeter coming from the consolidation of Anchor, which was not there in Q1-2024. Organic growth pretty positive, very positive, I would say, at 5%, certainly driven by transmission, but with also good solid stability in IMC and power grid and a growth, actually, in digital solution, as Massimo said, very strong in North America. Good news also from the start of the year on the EBDA, the adjusted EBDA, 527. You appreciate, as Massimo commented, the margin expansion, if you look at the percentage of revenues at standard metal prices, from 12.4 to 13.1. There are... Many good elements in this margin expansion. Certainly the biggest factor is the strong expansion of margins in transmission, but also margins in the power distribution, the power grid space are holding up pretty well. In terms of net income, the landing point group net income is 150. It is certainly affected by the growth of the financial charges to 73 million, which are, however, in line with our expectation and fully reflecting the impact of the acquisition, and we have a temporary negative effect which is on this monetary item, coming from the negative fair value of metal derivatives, which is sometimes a quite usual element in our profit and loss. It is temporary, but it is weighing a bit on our Q1 2025. We can move quickly to the cash flow. You see here, as usual, the bridge from March 24 to March 25 of our net debt, which is, of course, resulting in the last 12 months' free cash flow. So we see the move of net debt from 1.7 before and for acquisition of yours to the current 4.8, 4.9, affected by the acquisition effect. affected positively by the net of the convertible bond conversion, which took place between June and July last year, and the share buyback for a positive net effect of 357. And you see the pretty powerful free cash flow that we have generated in the last 12 months, which is... at the 1 billion level and substantially in line with the full year 2024. Of course, this still benefits a lot from the working capital changes as of close to 500 million. We may have some different distribution here throughout the quarters because you appreciate that the cash flows of the transmission business in particular are depending on milestones, are depending on down payments, so they don't, they never distribute equally over the quarters, but this is a very good start on track with our $1 billion midpoint of the full year guidance. Thanks a lot, and I'll give it back to Massim.

Thank you, Francesco. Let me move to the guidance.

We are still in the position to be pretty confident about these guidelines, with a midpoint of 2.3 billion, despite some, as you know, turmoil in the American footprint. But the signs, the signal from the market, the customer rise and rise are pretty strong. We see a market demand in terms of investment. We see a market demand in terms of cables for electrification and for special business. Telecom business are committed before. So we are in position to confirm the report on the guidance, of course. We have two effects. One that we expect to close the deal with the channel towards the beginning of June. So it will be before the end of quarter two. So we have the full impact of semester of June and the other revised guidance that we will probably share with you in July. This is a very positive news and opportunity. On the other hand, we have some headwinds that you can expect. in terms of forex, dollars, or euro exchange rates. For quarter one, we've been pretty much immune, but at the current level, because if this current level exchange rate continues for the remainder of the year, we might see some significant some additional headwind. We will be, in July, in the best position to reduce this guidance, including the business trend impact which is positive for what we see including the channel perimeter changer and probably including some uh adverse impact from the uh forex exchange rate vintage flow confirmed at the one billion for the full year so we are super super satisfied by the performance of transmission, which is also a very important pillar for the capital market today. Our journey from 2.1 billion performers in 2004 to 3 billion plus in 2008 relies a lot on transmission, and the further important one, we have expanded the business, we have expanded the mind use, and there is still a significant backlog that we possibly need in the next four years. So without the resulting traditional order intake to confirm our target, We are super confident that we achieved the 3 billion level mark for 2020 years. The cash flow generation is always, as usual, an important strength of this company and will continue to be an important strength of this company. Chain acquisition of Tojo is on track. We look forward to re-initiating and starting integration from June onwards and creating the common opportunity to turn the telecom business in the United States into a digital solutions business with the connectivity of cables. And so the 25-year loop is confirmed. and in July we will have a revised deal for Lithuania. Thank you for your time. I think this will become open to your Q&A session.

Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We will now take the first question from the line of Daniela Costa from Goldman Sachs. Please go ahead.

Hi, good morning. It's actually here on behalf of Daniela. So a couple of questions. First one, on power grid, if you could provide some color on medium voltage versus HVAC performance, and also if you can comment a bit on what you saw in US versus Europe. And then on the wait and see, you saw in the U.S., was that more on HVAC or medium voltage? And then the second question is if you have done any pre-buy during the quarter and if you've seen any pre-buy from customers and so what we should expect as a consequence for free cash flow conversion. Thank you.

Thank you, Daniela. So, Paolo Griglia, Samuel Collo. The rent growth has been negative because last year in Q1 there was a significant strong demand in volume and price in the overrated transmission business, E-Noise, which is now in Q1, but also in Q3, Q4, and Q7, not as strong in price, but also in volume as it was in the past. Mid-year growth is wise. The demand is still very strong. to the point, as you know, that we have approved two months ago a significant investment in medium voltage in the US and McKinney to both serve the IEC space and the power distribution space. The latency was about, say, the fact that in quarter one we had some Negative impact from the usual bad weather. We had a couple of factors. We went on stop for two or three days. Customer could not really start installing cables due to the soil condition. The wetness was about this situation. In March, as soon as the high season, the wet season started, we saw these rebounding medium worth of demand. Overhead transmission line, we were kind of... full coverage of 2025 in terms of backlog, so we are doing pretty well in this space in the United States. As far as Europe is concerned, demand remains self-cut, with strong demand in North Europe, strong demand in the UK, strong demand in Spain, weaker demand in France, so a different situation. We are, you know, this year we will have the new capacity is still renewable coming on stream, and this line is already full-saturated through the rest of the year. So there is stronger situation across the board. Remember that in the space also we have a medium, sorry, low-voltage cable that remains a weak center of business across all geographies. On the other hand, in the same space, probably we have a high-voltage business, which is a... I'm sorry, super strong, super demanding to the point that we are not able to catch up with this demand. And we are about to decide to make a second investment in Europe for additional capacity. I see U.S. versus Europe. The U.S., I mean, you know that we were scared by U.S. performance in January and February, but we know that was something specific, one-off, related to a negative combination of many factors, the weather, the season, the behavior of some competitors in U.S., and the sharp increase of the corporate price. The situation has completely changed. In March, the behavior of other players became more reasonable. We witnessed many price increases in the market in March. They have all been followed suit by all other competitors. And in April, we continue to lose strength. Europe remains also here a scattered situation. We have a genetic demand good in terms of industrial commercial projects, some stability, with some good spike in demand in residential markets. Pre-buying, I mean, we have not seen pre-buying in the US, which is where we expect things to be exposed to tariff importer, but we've seen customers that are working away from the usual importer's channel, and afraid of being hit by targets in the shoot. So there's been more additional demand in the market. There has been some of the customers used to buy from importers shifting that amount towards local players.

That's clear, thank you.

Thank you. We will now take the next question from the line of Akash Gupta from J.P. Morgan. Please go ahead.

Yes, hi. Good morning, Massimo, Francesco. I have two questions as well, and I'll ask one at a time. The first one is that I see that you are now moving to margin in constant metal price, which I guess makes sense as it removes impact from swing in metal.

prices.

But can you tell us what does the new normalized margin will be in constant metal prices? I mean, previously you said you target 18% to 20% in transmission, 12% to 13% in grid. So how do they translate into a new margin definition? And where does electrification margins are going to sit on constant metal prices definition?

That's the first one. Okay. As far as the emission is concerned, the impact of the

Thank you. Thank you. Thank you.

Standard metal passes versus carbon metal passes, not that much because even in transmission using metal, quantity of metal, it is a much more quantity of other material and installation activity. You've seen this in the in the quarter one where margin at current was 16.6, margin at standard was 16.9, so no big deal. So we confirmed that in the mid meet long-term targets, so the capital market rate target, when we mention to you that we'll be averaging around 18% slash 20%, you should probably ask the point to these targets to recognize the effect of the standard meter margin in the transmission space. On the contrary, in the IEC space, the differential is pretty high. I think we should consider a couple of points, 200 basis points additional, if you convert it from current metal prices, current being quarter 4, quarter 1.25, into standard metal prices. The level of copper in standard metal prices is $5,500. The level of aluminum is $1,500. The level of lead, which is a minor metal, but we celebrate, is $2,000 per ton. And so you can make a comparison to the current metal prices. I give you another additional hint. So, in the current, the famous ankle wire 15% EBITDA margin at current, we are really close to 19% as standard.

Thank you.

And my second one is on the opportunity of market outperformance in the U.S. in the electrification market. I mean, when we were at the Capital Markets Day, you talked about how Encore is complementing your offering and making you a full line supplier for all the types of cables.

that are required by distributors.

So we'll be soon approaching to one year anniversary of close of ENCODE deal and I wanted to get your thoughts on have you started to see any increased traction from distributors that may help you gaining market share given now you can supply literally all type of cables on both copper and aluminum conductor. So any thought on market outperformance that we should see in the remaining part of the year? Thank you

Thank you. Actually, if you understand the question, it's about the opportunity to sell more to distributors and the opportunity to leverage the facilities. We're talking about the same stuff. We have already geared up the commercial organization, which basically is what we adopted from the Anchor Wire acquisition. The agent footprint of Anchor Wire is the new commercial organization in the entire IMC space in the United States for Prismian. We need to gear up these commercial organizations to sell our products, not just the ankle wire products, so the copper and aluminum building wire, but also medium-voltage cables, elastic cables, portable cords, electronics. Most of the stock... We are already either relocated in terms of production in McKinney or we are initially relocated in terms of service in terms of distribution center to McKinney. This is helping us deliver from McKinney across the entire INC portfolio of products the best service record. So what we notice is that customers have recognized Even recently, despite some, let's say, contingent difficulties in the first two months in terms of maintenance, maintaining the same service level, in the last four months our service level has been impeccable. We all appreciated the 24-hour delivery. Most of the monthly revenues are from stock, and this means that 70% are from stock within 24 hours. These advantages that used to be applied only to copper and renewable energy, now is applied basically to the entire portfolio, almost to the entire portfolio of products that we deliver to the NC space. So this is the rationale, this is what we are going to leverage to achieve the cross-selling opportunity and the pressing improvement associated to the integration of the two perimeters.

I hope I answered the question, Akash. Thank you very much. Thank you.

Thank you. We will now take the next question. From the line of Chris Leonard from UBS, please go ahead.

Yeah, hi there. If I could just ask a first question to clarify the electrification business and on-call why you're saying that you've already achieved sort of 15 cent margin in April. I'm just wondering if that's also true.

Are we seeing an improvement in...

in the legacy IMC margins as well, excluding Encore? And if so, has that been driven by higher demand for copper wire or aluminum wire, or is that actually also from better pricing behavior that you commented on for all competitors? Thanks.

March and April benefit from all those factors. Of course, there is an additional volume in the market, given the start of the high season is a quarter of March, and quarter two is certainly set at the start of the high season. So the volume in the market, more demand, as I said before, there is some customer really shifting their supply chain from imports to local players, so this is also We had better prices, no doubt. We had better prices because on the one hand, copper and aluminum stabilized a little bit in terms of a price increase, and we could, with a price improvement set in the market, fully accept their costs, which this was not the case in January and February for copper and aluminum and iron, and actually were beyond accepting their costs. So this level of profitability is not back to the level it was before, it is not just ANCOR to answer your question, it is also the rest of the IEC perimeter, which tend to be less visible, less, how to say, It's not difficult to carve it out because most, so some, so the entire copper production with Lega Suprema has been moved to ANCO. Most of the aluminum building wire that we used to, we still produce in our site, Lega Suprema, we are delivering to customers through ANCO. So the two perimeters fully, fully become very, very bland. And so the overall margin is in line with what I tell you about today in Colorado March.

Okay, thank you. That's very clear. And maybe a second question tying into electrification, but also maybe on power grid. What are you seeing for indications of higher pricing on aluminum, and is that being able to be absorbed across the market? And if you can maybe update us as well on this, of percentage exposure for aluminium on the new INC divisional structure with Encore included and equally on Power Grid just to give us a flavour of that shift to more local players and how that will impact revenue growth. Thanks.

The Midwest premiums or the extra costs represented by Tile is part of the formula in existing firm agreement contract with the customer, so this is a simple pass-through. As far as the aluminum impact into the electrification, so IC space, we've seen the Midwest premium reflecting the impact of tariff even before tariff had been put in place. So from end of January onwards, we had seen Midwest premium increasing there. We have been able to pass it on to the market because this is a common situation across all competitors. Satwaya, ourselves, we all needed to sell some aluminum from production plants that are located outside of the West, and so tariff has become a normal part of the cost. Of course, this will create more inflation in the cable space, in the activities where cables are required. for investment in expansion of the grid or for investment in connection of building and so on to the grid. But so far we didn't see, we didn't notice any downward market demand due to the incremental costs associated to metal increase over the two times.

Okay, that's great. Thanks for all the comments, Super Claire.

Thank you.

You're welcome.

We will now take the next question. Please go ahead. Hi there.

Thank you for taking my question. I missed it. Sorry about the noise. So my first question is on PowerBree. I'm not sure we see it back already, but we've seen very resilient margin compared with, you know, some concerns on margin softness discussed in the U.S. market last quarter. Do you still view the 12% to 13% as the right margin range, please?

We see new resilience, yes. Maybe it was too negative last time when they mentioned a range of stabilization in margin per week between 12% and 13%. I think in standard terms, in standard meter prices, we see this level of between 14.5% and 15.5% or 15% midpoint stable over the coming quarters. because the drivers are the same drivers. And in public, not necessarily this year, but very significantly next year, we will see an uptake in margin represented by the additional HVAC volume delivered to the market from our additional capacity.

15% level is what we expect to see in the coming quarters.

Okay, great. And if I can just follow up on the power grid. So my next question is, was there any frame agreements due for renewal in the quarter? If so, was there any change on the price and duration of the agreements or any terms and conditions?

There are frame agreements under renewal every quarter in the U.S.

as well as outside the U.S., But as we all understand, even if they went out for tender, it is very difficult for a customer to shift from supplier A to supplier B, especially supplier A has been excellent in terms of service level, in terms of reliability delivered, in terms of quality, in terms of technological capabilities. So we in the current frame of brain that they renewed in quarter one and what we see for quarter two, we haven't seen a particular price pressure for the market. It is true that Capacity coming soon from all players, but it's equally important to know that once you gain an important leadership position in terms of sharing value with a customer, there is a lot of resilience from this customer to shift from a different supplier. from a neutral to a different supply. So we are seeing pricing deterioration in the Newfoundland agreement. On the contrary, our ability to keep adding stuff to the cables, like the monitoring devices, like the assessors, like the puncture dischargers, so a lot of stuff we are adding to cables to make our offer kind of unique. So this is a happy answer. When the market is weak, spend the possible price and pressure. When the market is solid, it is easier to build additional volume and opportunity.

That's very clear. Thank you very much. I'll go back to the queue.

Thank you.

Thank you. We will now take the next question. From the line of Monica Posseo from Intesa San Paolo, please go ahead.

Good morning, all, and thanks for taking my questions. I have three. The first is still on power grid, sorry. The start of the year was with a minus 2% organic decrease due to the tough comparison days. So should we expect the organic growth could turn positive from 2020? Second, when the new capacity will come in force. And if I'm not wrong, within the power grid segment, the weight of the low voltages is quite low, 20%, 25%. If I'm not wrong, low voltages are weak. When should we expect a recovery also in low voltages within the power grid segments? This is the first question. The second one is on transmission. The plus 50% organic growth in the first quarter was materially above the market expectation. Should we expect similar progress also in the next quarter? You guided for a 17% margin. I'm just wondering what could be the incremental adjusted EBDA in absolute terms by year-end for transmission? And the very last is on the competitive environment in industrial and construction. Now you increase the pricing, the volumes are up, but any call on the competitive environment and the pricing discipline within the segment will be useful. Thank you.

Thank you, Monica. And that question, computer suppression, well done. So let me try to answer one at a time. So power grid, organic growth, negative by 2%.

The growth is... Thank you.

That is a tough comparison due to the overnight transmission business particularly stronger in some projects in U.S. in Q1 2024. We will see organic growth in the coming quarters in the wake of an additional capacity but also the additional of the strong season. It will not be at 10% organic growth, it will be in the range of a mid-single digit organic growth increase. Bear in mind that in Q4 last year we had a significant growth in paper grapes, so whether we will be able to maintain additional growth year-on-year over Q4, we will see. But Q2, Q3, we will see organic growth turn into positive. the voltage has been very weak since ever so the reason is not that simple for us to understand or to quantify but certainly the demand of electricity driven by a load in this case that we are very aware of, is affecting much more high voltage AC space and medium voltage space than it is mid-flow voltage. It's not that demand is declining, it's not just growing. While the demand for medium voltage and HVAC is stronger in order to transmit more power, more quantity of energy, to feed electricity to the different fuses. So I don't expect recovery in the low-voltage space. Transmission, yes, super fantastic, super satisfied. 60% was not considerable a few quarters ago, but we did very well in terms of execution and in terms of efficiency. benefiting from the high-margin projects and the additional installation capability thanks to the investment. This contrasts with our strategy to invest both in manufacturing capacity and installation is really paying dividends. And different from what many competitors, actually all other competitors, have decided to do, so to focus only on manufacturing. Installation is an important part. of the EBITDA margin increase, an important factor that drives organic growth increase. The full year of EBITDA, you know, we know it. It is well defined because of the back of one hand. Last year, we did a little exam in system medium. I didn't mention what the capital market is, what the EBITDA target is for 2028, but I gave you many indication to allow you to see the results. So we have exceeded 100 million times by 2028. So our journey from 264 to 100 million plus in 2028 goes through a significant increase in 2025. In the region over 180, 170 million. Green Greenland, Greenland, Greenland, what is the factor that you see in the quarter one? Execution, capacity increase across the board, so manufacturing and installation, and the commercial portfolio.

I'll do my math, thank you. The competitive... Right, I'm sorry, I'm going to...

So you want me to answer the third question, or do you want to go back to PowerPoint? Yes, yes, sure, sure, Massimo, sorry. Okay, so the third question was about the competitive environment in the ILC. Yeah, we had some undisciplined behavior, let me say, in January and February, which were fully recorded in March and April. So the whole market became more disciplined. As I said, the pricing increases that we set in March were free. They were all truly stuck into the market. So we had maintained the pricing increase set every single time, and competitors followed them. is recognizing our power in the market in terms of leadership in pricing, and also recognizing our large position versus our power channels, distributors. And also recognizing that some of the smaller distributors that used to buy products from imports are shifting to demand to the local suppliers. And this is the indirect benefit of the possible threat represented by tariffs, which are not yet in place anyway.

Yes, agreed. Thank you very much, Massimo. Thank you. Welcome, Monica.

Thank you. We will now take the next question from the line of Uma Samlin from Bank of America. Please go ahead.

Hi, good morning, everyone. Thank you so much for taking my question. So my first one is follow-up on the electrification margins. Michael, you mentioned that the behaviors in March and April have returned back to what you saw last year. Does that mean that your electrification margin is likely to return to a similar level of last year, something around like, you know, 9.5? to like 10.5% of margin profile. And another one is on ANCOR that, you know, do you see any scope for the ANCOR margin to return to the previous like 20% if you see any pickups in U.S. construction? And my second question is on the funding of the channel acquisition. Would you be able to give us an update on the plans in terms of the mix of treasury shares and the sale of the shares of the YOSC? That would be great.

Thank you very much. Thank you. I mean, the first six months were not noted because we didn't consolidate ANCO until the end of July. Quarter three last year, the EBITDA margin over ANCO or ISC in North America was more or less the same, like 15%. So, when you mention this 20%, I don't recognize it. The margin over ANCO were even higher than 20%, but I'm talking about 2020 to 2023. And also, our ISC margin was pretty high. driven by the significant scarcity of products due to the disruptions of the chain, scarcity of the machine, and due to the inflation that the US was exposed to in May 2021 and the whole of 2022. So from that moment onwards, even the marginal anchor and prisming perimeter stabilized at 15%, from 1st, 2nd of 23 almost and we had this deep margin in November, December, January, February November, December 24 and January, February 25 March and April has restored the level of 15% so we are back to where we were thanks to the strong demand, thanks to the behaviour of competitors and also thanks probably to some tariff, indirect tariff benefits The 15% current margin means the 19% is standard metal margin that I mentioned before. So I don't want you to get confused now for no reason. We will report the standard margin. So margin is standard metals. So the original 15% of anchors based on current margin will turn into 19%. The 19% is the level that we confirm for now. No words. Finding our channel position, I would like to hand over to Francesco for the detailed explanation. Thank you, Massimo.

As we said, as Massimo by the way anticipated, we certainly add to the closing or channel in the first half, end of May, beginning of June, we'll see, it will be a balanced mix of debt and equity or equity-like. And the important thing to register is that it will be absolutely consistent with our investment rate. Okay? That's the important point. Of course, there is a timeline. It's not that we have to do things entirely in... at closing time, it's important to keep this financial position balanced throughout the year. We mentioned the instruments, we will resort to certainly the hybrid bonds, the subordinated bonds, which is currently pretty strong in terms of market after some, let me say, weaknesses that we saw in the market, I mean, a few weeks ago. I think that now the market is back and pretty much in good shape. You saw, by the way, that we have activated some, let me call them, equity-like, such as, for instance, we decided to go for a the placement of our wires to stake, this is also a way to finance the transaction, which is, as a matter of fact, equivalent to equity, in principle. And, of course, this is also an instrument to do that. What I can assure you is that we certainly minimize the dilutive instruments. This doesn't mean that they will be zero, of course, but we will certainly minimize any dilution for shareholders, keeping our financial structure totally in line and consistent with the investment rate.

Thank you. That was helpful.

Thank you very much.

Thank you. We will now take the next question from the line of Miguel Borrega from BNP Paribas Exxon. Please go ahead.

Hi, good morning, everyone. Thanks for taking my questions. I've got a few. So first on transmission, I was wondering if you could give us more detail on the margin performance of Q1. You mentioned execution and better mix. Is it because of some specific project that started to kick in, or is it because you're delivering ahead of your initial budget? And how much visibility do you really have ahead of the quarter? I ask because these projects usually have an estimated margin, and one quarter you were guiding to 16% or slightly above 16% for the full year, and now you're saying 17%.

Thank you, Miguel. You know, when we plan, when we provide our forecast, we tend to be conservative because we want to ensure to date it. So that is probably the reason why we plan for sustainable delivery of 17. But very specifically, yes, we had the With the expectation and the margins of the project, we have some better margins projects in the back, like Tiranyanlinka and some others. So let me not be specific, because I mean, they are customers, so listen to the questions. And we have great visibility of this transmission business, because the 17 billion vehicles provide us these benefits. not only for the coming quarter, but for the remainder of the year, through 2028. That's why I came in. Even confirmed that if we continue with this current pace, which I don't think we will be difficult to do, we will achieve a 17% dividend margin for the full year.

Thank you. And then, big picture, you saw yesterday Orsted cancelling Horn C4, complaining about higher costs, etc. And I know you've been involved with Horn C2 and 3. The political environment is also a little bit different in Europe. So how likely are we to see further cancellations in the European pipeline? Not yours specifically, but more generally. And can you give us some thoughts about the size and number of awards going forward? Would we see your backlog, for example, growing again, or do you think it has peaked?

We have seen what you mentioned.

There is certainly some pressure on some offshore businesses, more than anything else. It's a business that is not relevant to us, but you're right, in terms of project-wide guidance, the inflation might cause some readjustment of the timeline of the permitting of some of these projects. So far, we still see a significant, long and reliable list of pipeline projects ahead of us. We will confirm the market size for $25 billion, the original $15 billion plus. There are many awards, that is the IPTO-Greek Play, Play-In-Play-In-Play-In-Play-In-Play-In-Play-In-Play-In-Play-In-Play-In-Play-In-Play-In-Play-In Improve our backlog is likely to improve it, because we don't want to exaggerate, as we probably did in the past. To build up a backlog doesn't allow us to play the proper role of only the new couple, the customers for the new projects. But undoubtedly, given the current 15 billion intake that we see for the working 25 years, Indeed, on that we will consume probably $2.5 billion or $3 billion of our current backbook for the execution of the revenues in the coming quarter. Thus, you will see at the end of this year an increase, a marginal increase, to our overall backbook.

Okay, thank you very much.

Thank you.

We will now take the next question from the line of Lucas Serrani from Jefferies. Please go ahead.

Good morning. Thanks for the question. Could I ask about the trends you're seeing for electrification, especially INC in April so far? Are you still confident about kind of the improvement you've seen in March? Thank you. Yes.

When I commented March, I also commented April because April is for now a month that we already closed. The margins progression was stronger in March where it was generally in February. In April it was even stronger than March. So April has confirmed. that the discipline, behavior of competitors, the sustained demand for the market, the high season has reestablished very high level of the margin in the United States. So in current terms, current rate of terms at 15%, in standard rate of terms close to the 19% that is the rate that it used to have in the quarter 3 last year when we first consolidated and co-initiated. My input is reassuring, comforting, and setting the scene hopefully for a week or two.

Thank you. And generally, when we look at the full year, given the start you had, I remember I think in Q4, when talking about INC margin into 2025 in current terms, you were talking about maybe 10.5, 11, or maybe even above 11 possible. Where do you think you end up now for the full year, given the information and the visibility you have now on margins?

Yeah, I think we have to distinguish when we talk current and when we talk standard. In standard metal, of course, the standard metal costs, the standard metal prices sell it. The level of 13% from the total group margin is what we can think of achieving. So in state quarter one it's 11.6, so there is definitely a big cut, one and a fourth to two points in place for the remainder of the full year average that we will see, but the coming quarters 2 and 3 are suggesting, in light of what we've seen in April, that we can achieve the level of 13.7, 13.5, 13.5 for the full year.

Thank you. And a quick follow-up just on offshore wind. Obviously, we've seen the stop order on Empire Wind. Obviously, you're working on coastal Virginia. There hasn't been any announcement there yet, but can you give us an idea of how much left do you have to do on that project? Is it the cable manufacturing now done? Is it just installation and roughly in kind of In 100 million euros, what would that be in terms of revenues? There is not much of what is left to be done.

We have completed the production. For now, the production is a few tens of millions of what is left to be done in terms of value.

Perfect. Thank you.

Thank you. We will now take the next question from the line of Shing Wang from Barclays. Please go ahead.

Hi, thank you again. So my next question is on the financial item. So net income is lower this quarter, and part of the reason was this $55 million loss on commodity derivatives. Can you maybe elaborate on this, please? Was there a change in how you do hedges in Q1? Or maybe there's some level of speculation on enterprises. How should we think about this line-on term going forward?

Thanks for the question. Thanks for the question. It's quite the contrary. We are fully edging, and for this reason we don't manage for some technical accounting reasons to achieve an edge accounting treatment, and exactly for this reason we have some metal, some significant metal derivatives, which has always been the case in the past, which fluctuates on our profit and loss in terms of... for many of these derivatives change. And this is a temporal impact on our profit and loss, by the way, a non-cash impact on our profit and loss, and it will basically stabilize or disappear throughout the year. So no concern on that. No speculation at all. Just to be very clear about the contract.

Okay, excellent. Thank you very much for confirming. You're welcome. So my second question is on the high-voltage demand. So in April, Texas approved $10 billion spending on 675 kV transmission lines. Given Texas is basically your home base in the U.S., I assume prison is very well positioned to address this demand when it comes through. I think it's still early stage, but do you have thoughts already? Would you need to build a new capacity? And how fast can you get the facilities qualified for 675 kV?

We have the qualification for the level of technology, of course, in the restaurants as well. We see the U.S. committed to investing more in the grid. HV is one important piece of the grid. When we talk about HV, the U.S. is both underground cable and overhead transmission, and we are pretty positive about the opportunity that we see in this space. Also, also considering that After this market is served by Koreans, and should the target be one day implemented, most of this market will be restricted and limited and confined to local players. So that will be an additional opportunity to take advantage of local presence in the U.S. and local technological capabilities in the U.S.

That's very good to know. Thank you for that. My last question, if I may. For power blackouts, these were very rare in developed markets in the past but are happening more often recently. What can Prismian do to enhance grid resilience? What are the commercial opportunities out there for Prismian?

What we can do is very simple. We can offer more cables because what is actually missing is utilities investing more in connecting the local grid, the country grid, with the adjacent neighborhood country grids. This was a weakness, we know that, it was a weakness in the energy footprint of Spain. It's less, it's more reliant on local generation than it is on the integration, the interconnection with adjacent countries. This is a completely peculiar situation for Spain, different from many other countries in Europe, which have at least 30% of their energy demand connected and supplied by other countries. So the opportunity for us is important because there will be more interconnectors if they wanted to resolve the problem in a structural way. There will be more cable interconnecting in Spain with other countries, either via land, so underground cables or submarine cables.

It's an opportunity for additional stream of revenues.

Thanks very much. The one thing we didn't probably touch on is digital solutions. Can you maybe update us on the demand and pricing trends in Europe and U.S. markets? Has the Fed's four months progressed as you expected? How should we think about coming quarters?

Yes, thank you, Ox. The demand in the U.S. is very strong. To some extent it has taken us by surprise. We hadn't realized that there was a significant surge in demand. We started to respond with local capacity and we are using other factors, European factors, basically to supply and top up the local production of rice. The demand remains strong because it has been very weak over the last two years. due to the stocking law that the U.S. customer entered into after the big buying that happened in 2022. So coming quarter, we'll see this demand remaining pretty solid, and hopefully we will see pricing improving because we want to overweight the available capacity. So there will be tightness in the supply chain. Europe is, on the contrary, not as strong and stable. Most of the countries in Europe are more advanced in terms of how they run out. And we don't have yet in Europe the additional stream of activity resulting, coming from the data center expansion. There are data center implementations in Europe, but not to the level of what we see in the United States. So stability in Europe, pricing and also stability in Europe, volume opportunity in the U.S. with pricing opportunity in the U.S.

where we get to here. Thank you so much.

Thank you. You're welcome.

Thank you. We will now take the next question from the line of Alessandro Tosra from Mediabanca. Please go ahead.

Yes, hi. Good morning to everybody. I have three questions, okay, if I may. The first one is if you can come back a little bit on channel, if you can comment also on Let's see about the triggers behind the turnout mechanism. I recall the very high profitability of channels, almost 40% bid-amount. So if you can help us understand if, let's say, the payment of turnout is more linked to top-line acceleration you see for the current year. So that's the first question. The second question, please, if you want to go ahead, please, thanks.

So, China's mount mechanism is, as you see, based on a baseline price of $150 million plus a range of up to $200 million. All of this is related to the BIDA performing into 2025. for the full-year performance of 2025. Based on the range I've built up, in $150 million, we can grow as high as $1,150 million. They are doing well. They did well in quarter one. they are, let's say, well positioned to benefit from the boundary bound also in the collision space. We anticipate a route quarter two also, and then we'll see what quarter three, quarter four will look like. At that point, we will have them in by the normal perimeter. So that is the mechanism of the analysis. That's enough for now.

Okay, like you said, the level is not fantastic. You said in terms of EBITDA up to 150 million, sorry.

No, the price mechanism is based on a 950 million minimum price, on top of which there are 200 million price increases if they achieve certain thresholds, certain targets of EBITDA. So the amount price is based on the BIDA achieved at the end of 2025. For the time being, the BIDA is doing well for the last year. What it does is expect it to be also positive, and we'll see what happens in the second half of this year.

Okay, okay, thanks. And then the second question, okay, I can crunch the second and third one. If you can give us a few indications for DNA, for the period considering the one that you give a medium level into one, and also in terms of charges for the period, I think.

The DNA is quite simple, I think, if you... times 4 is a pretty good projection because we have now the full impact also of the amortization related to the price allocation of ANCOR so it should be quite easy and for the financial charges the indication that I can give is for a total of 260-270 million for the full year

not very different from the times for us in this case, and I don't worry about it in this case. Okay, okay, thanks. Welcome, Alessandro. Thanks a ton.

Thank you. We will now take the last question from the line of Luigi Debellis from Equitasim. Please go ahead.

Hi, good morning. I have three questions, if I may. The first one related to the transmission business. Could you elaborate on the potential pipeline of a new project? How has visibility evolved compared to three months ago on your target market, so mainly TSO and Europe? The second question, the new tariffs introduced by U.S. administration are creating and will create significant destruction that could lead to a shift in global manufacturing flow. So do you see any risk of increased competition from Asian players in Europe or in specific segments of your business? And on the other side, Could you elaborate on the trend you mentioned of shift of your customer in U.S. positive indirect impact from tariffs? And the last question regarding data center, how is demanding evolving looking to your side and have you observed any changes in the trend based on your current visibility?

Thank you, Luigi. So Transmission Pipeline is, yeah, we have the usual visibility. We have at least three-and-a-half years worth of projects in the pipelines with names, the name, with definition of the routes and all the rest. So we see through 2028. Of course, it's important to understand when this product will become a tender and when it will become an order intake. So we have a great visibility of 2025 in terms of tendering activities because it is actually active and happening as we speak. And we also have visibility of some tenders that will be released into the market in 2026. As far as the time is concerned, yes, there is a little bit of uncertainty as to what is going to happen at the end of these 90 days. You know that those 90 days commenced on the 10th of April, so throughout the 10th of July, That is the suspension of the time zone, and then we'll see what happens next. What we notice is a behavioral change in local customers, as I mentioned before. trying to shift away from the current supply chain, offshore supply chain, so shifting to local producer. I didn't see any increasing aggressiveness in Europe coming from those players, redirecting their supply to European customers. I haven't seen any changes, any indication coming from the market. Besides that, the central demand we see is still not changing. The market is pretty strong. We are gaining position in this space because now we leverage the portfolio, the synergistic portfolio, especially in the US. And in Europe, we are weaker than we would like to be. So we should be more effective. So we are working more closely with potential contractors Because the one in the U.S., the different center market is a trade-to-trade distribution, and we have a strong position there. In Europe, it's trade-to-trade contractors. So we're gaining position, we're gaining share in this space, thanks to the new negotiations with these contractors. But in terms of overall demand, we will see changes.

Thank you very much. Thank you. You're welcome.

Thank you. There are no further questions at this time. I would like to turn the conference back to Massimo Battaglini for closing remarks.

Thank you for your time.

I really appreciate it to have this satisfactory quarter-run