Webuild Stock

Good morning, and welcome to the Webuild First Half 2026 Results Conference Call. On today's call, we will have Pietro Salini, Chief Executive Officer; and Massimo Ferrari, General Manager, Corporate and Finance. Please note, this conference is being recorded. [Operator Instructions]

I will now hand you over to your host, Pietro Salini, to begin today's conference. Please go ahead, sir.

Thank you, Zach. Good morning, everyone, and thank you for joining our conference call on our group first half results. Let me start with headline. We are proud to present a very strong first half results that keep us firmly on our industrial trajectory. The environment was demanding, inflation, high interest rates, geopolitical uncertainty and supply chain pressure. On top of that, the 2 NEOM contracts in Saudi Arabia were canceled, yet we did deliver. The scale and diversification of our backlog absorbed the cancellation in full, and our 2023 guidance already reflects it.

Let me talk to the numbers. Revenues held at EUR 6.7 billion, in line with the record first half of last year. Profitability improved further. EBITDA margin rose to 10% and EBIT margin to 7%, continuing on the improvement path we recorded in the last years. Our financial position remains strong, a net cash of EUR 110 million with gross leverage broadly unchanged at 2.67x. The order backlog stands at a robust EUR 47 billion, fully covering our 2026 revenue guidance. New orders reached EUR 7.7 billion. We see a strong momentum moving forward into the second half of the order intake. The book-to-bill stood at 1.2x.

To summarize, Webuild is diversified and disciplined. No single project or market can affect our ability to create value. We have reached scale and market leadership. Now our priority is to turn that scale into additional value. That is the direction of the new 2026-2029 business plan we will present at the end of September. Deeper vertical integration, technological innovation and profitable growth with one clear aim, stable and predictable cash generation. And we are not waiting to start. Yesterday, we announced a voluntary tender offer for Trevi, the first tangible step of that plan. By acquiring Trevi, we will bring critical high-value expertise in-house, gaining greater control over execution and improving competitiveness in tenders involving complex geotechnical challenges. We will discuss the strategic rationale in details later.

So we look to the coming years with confidence. In Slide 5, we show some of our major operational milestone in Italy and abroad for the 6 months. In Italy, we made significant progress on ongoing high-speed rail, Napoli-Bari, Messina-Catania and Salerno-Reggio Calabria and on the new breakwater Fortezza-Ponte Gardena. Abroad, we opened 11 kilometers of new highway lanes in Florida ahead of schedule and inaugurated the Senqu Bridge in Lesotho.

Two further milestones confirm our credibility and financial discipline. The 2026 Sustainability Report Award and the successful EUR 500 million bond issued in May, a clear sign of investor confidence. Our track record is recognized internationally. We are #1 in water, #1 in Italy and #6 in Europe. Australia continued to be one of the most important growth markets, and we are the third player there.

I now leave the floor to Massimo for a full overview of the financial results.

Good morning to everybody, and thank you, Pietro. Before I go through the results, let me remind you that we are presenting the recurring performance of the business. You can find details of the adjustments in the presentation appendix. Let me start with Slide 7. At the top line, we maintained the same record level of first half 2025. At EUR 6.7 billion, the group shows how it can maintain production levels and absorb the impact of the 2 very important NEOM contracts being canceled by the client, an impact of around EUR 250 million in the first half and more than EUR 550 million for the full year. The strength and diversification of our backlog protect our volumes and margin. Margins improved. EBITDA was EUR 673 million, up 14% year-on-year. EBIT was EUR 464 million, up 15%. EBITDA margin increased by 120 basis points to 10.1%, and EBIT margin by 90 basis points to 7%, both versus first half of 2025. The improvement reflects strict cost discipline and the effectiveness of the contractual and operational solutions we have adopted.

Turning to Slide 8. More than 90% of revenues were generated in low-risk countries with Italy, North America and Australia, the biggest contributors. More than 60% comes from international markets with revenues well balanced by geography. First half production was driven by our largest projects, already mentioned by Pietro, in Italy, in Australia and also some other in U.S. The revenue contribution of the top 10 projects down to 53% shows our market diversification matters. It reduces exposure to local shocks, mitigates project-specific risk and makes the group's revenue profile more balanced and resilient. By business area, sustainable mobility and clean hydro energy are the largest contributors, representing together around 90% of the revenues for the period.

Let's see in detail some lines of the P&L in Slide 9. Financial income was EUR 49 million, down EUR 11 million, mainly due to a reduction in average balances of bank deposits. Financial expenses increased by EUR 93 million, this increase is non-cash. The larger part is a deliberate trade-off in favor of cash by waiving interest on some receivables under settlement agreements. We accelerated collections, added new work to our backlog and reduced our claim exposure. The remaining part is a genuine one-off write-down of certain financial receivables. The net exchange result was positive for EUR 32 million, impacted by the performance of U.S. and Australian dollar and the Colombian peso against the euro. These effects tend to end up being neutral over the course of the year and most of them are nonmonetary.

Proactive decision to derisk the portfolio and protect future profitability on certain projects completed or nearing completion in North America and Australia had an impact on investment results. Disposal is now closed with no further losses expected. In short, the underlying quality of our results is intact. Net income stood at EUR 113 million.

Moving to Slide 10. We highlight our continued financial discipline. We maintained a positive net cash position of EUR 110 million. It's the eighth semester in a row that we achieved a positive net cash. This marks a structural change. It stood at EUR 363 million at year-end 2025. The decrease reflects the typical seasonal absorption of working capital that we normally see in the first half of the year. The decrease also reflects around EUR 210 million of CapEx in the first half. For the full year, we expect a total CapEx of around EUR 700 million. At the same time, we preserved a disciplined leverage profile. Gross debt was EUR 3.3 billion at the end of June 2026. The increase versus end 2025 reflects the impact of the new bond issue. We also assumed the Panama Canal bank debt, which was previously accounted for at equity. What matter most is the gross leverage that remained almost unchanged at 2.67x. In fact, the increase in gross debt should be seen as an opportunistic prefunding transaction. We tapped favorable market windows to give greater flexibility and create additional liquidity while keeping the net position under control.

You can see on Slide 11 on how the recent bond issuance has further strengthened our financial profile. The EUR 500 million bond issued in May and maturing in 2032 attracted orders exceeding 5x the offer size, generating record demand of approximately EUR 2.5 billion. Around 75% of investors were from outside Italy, mainly from U.K., France and Germany. The issue helped us extend the maturity of our debt. We will have the first expiration date material in 2028.

Today, more than 90% of our corporate debt maturities start from the fourth quarter of 2028 onwards. This also gives us greater long-term financial flexibility. Our structure is predictable with 95% of debt at fixed rate. The average cost of debt remains at 5.1%. On liquidity, we have a very strong position, supported by EUR 2.4 billion of cash and around EUR 1 billion of fully undrawn revolving credit facilities. This financial strength is recognized by the rating agency, as you know, both Fitch and Standard & Poor's confirm Webuild with a BB+ rating and stable outlook.

I thank you for your time. And Pietro, over to you.

Thank you, Massimo. Let's move to Slide 13. Our strength lies in the quality and visibility of our order book. As shown at the top of the slide, the total order backlog stands at EUR 53.7 billion, including EUR 47 billion for construction and EUR 7 billion related to concession and operation and maintenance activities. If we include the projects awarded after June 2026 and the best offers already secured, construction alone rises to approximately EUR 49 billion. This means that despite the termination of the 2 NEOM contracts, which reduced it by around EUR 3.8 billion, the overall backlog remains at a very significant level, almost in line with last year. It continues to provide substantial visibility on future revenues. 2026 target revenues are fully covered and large part of our business plan. Beyond this size, quality matters just as much. It is a high quality, supported by contracts with price adjustment mechanisms that provide protection against inflation. It therefore, offers not only coverage, but also greater predictability in project execution and profitability.

Turning to Slide 14. What keeps this backlog replenished is our commercial momentum. In the first half, we already secured EUR 7.7 billion of new orders. It represents a book-to-bill of 1.2x over the 6 months. The majority of the new orders came from our core markets. Italy contributed EUR 3.6 billion; North America, EUR 2.6 billion; and Oceania, EUR 1.2 billion. Among the projects awarded, there are Rome Metro Line C extension in Italy, Ohio River Tunnel project in the United States, Kwinana gas power plant in Australia. And we ranked the New Zealand market with an award of Christchurch Men's Prison. The pipeline ahead remains strong, as I'll show you on the next slide.

Let's move on Slide 15. The megatrends determining investment in infrastructure remain unchanged. This includes climate and energy transition, water security, urbanization, defense and digital infrastructure. Webuild is well positioned to address them all. Let me add some color by region. In Italy, our home market demand remains strong, supported by national new transport programs and growing investment in hospitals and sports facility. Across the rest of Europe, infrastructure renewal, rail modernization and higher defense spending are driving demand. In North America, large public programs and PPPs are funding transport and water. Australia offers strong opportunities in the energy transition and transport, while Saudi Arabia continue to build out an integrated urban system, connectivity and social infrastructure.

Beyond these core markets, we monitor other geographies where our local experience can deliver the right risk return balance. Our commercial pipeline stands at over EUR 108 billion. Of this amount, we have EUR 19.6 billion of tenders already submitted and awaiting announcement. While a further EUR 14.2 billion relates to tenders we are submitting. Importantly, the pipeline includes a number of major contracts where we are already strongly positioned to win. There are projects where we build is already well positioned for the work. Other where the tender has already been won and the project is progressing through the design phase. These contracts will be included in the backlog once the design activities are completed.

Lastly, on Slide 16, you will find our 2026 guidance. We expect revenues at more than EUR 13.6 billion, in line with the record level obtained in 2025. EBITDA is expected at more than EUR 1.2 billion and a net cash position at more than EUR 300 million. Let me put this outlook in perspective. Early this year, around EUR 3.8 billion of backlog was canceled and yet our performance and our guidance remains strong. That is the real message. The scale we have reached and the diversification of our backlog allow us to absorb even extraordinary events without changing course.

Our outlook is not based on optimistic scenarios of future upside, but on a solid foundation of existing backlog, visible commercial opportunities and operational initiatives that are already underway. We have built something solid and hard to replicate. Now our focus is clear, turning that scale into additional value with the same discipline that brought us here. We are finalizing our 2026-2029 industrial plan, which we will present to the financial community at the end of September. It will pursue the priority of a stable and predictable cash generation also through vertical integration, technological innovation and profitable growth. And in line with the direction of that plan, yesterday, we announced to launch a voluntary tender offer for all the ordinary share of Trevi. Let me be clear, any impact from this offer are excluded from our guidance for the full year 2026.

Let's now look at the strategic rationale of the offer on Trevi. Slide 18. Trevi is one of the leading global specialist in underground engineering and special foundation with a unique vertically integrated business model, combining engineering services and equipment manufacturing through Soilmec. This model has been built over more than 60 years and established Trevi as one of the few truly global operators in the sector. The industrial logic of this transaction is straightforward. Special foundation and underground engineering and critical activities in nearly every major infrastructure project and directly influence schedule, cost and delivery risk. Today, these services are outsourced by Webuild.

By bringing Trevi's capability inside the group, we would acquire competencies in a highly specialized and a strategically important segment of the construction value chain. It would also secure greater control over execution in terms of process, quality and delivery risk across the group's order backlog. And for Trevi, this EUR 54 billion of backlog is not an abstract number. It's immediate reality. The acquisition would allow us also to be more competitive in tenders involving complex geotechnical challenges. It would enable us to offer clients a more integrated end-to-end solution, improving pricing capability.

On the financial side, the cash offer is already funded. The initial financial debt linked to the acquisition is around EUR 500 million, approximately EUR 300 million related to the equity investment that Webuild have and around EUR 200 million at Trevi level following the financial restructuring completed in the first half of 2026. Trevi's stand-alone business plan already envisages the full repayment of its debt over the plan period to 2029. At the same time, the industrial synergies that are expected to generate around EUR 200 million of cash in plan horizon. This, together with additional synergies to be quantified and we build stand-alone capacity to generate cash, will give ample coverage to reduce the leverage within plan.

Let's move on Slide 19. Bringing Trevi into the Webuild Group, we generate significant industrial and commercial synergies on both the revenue and the cost side. Through Trevi, we build with internalized high value-added foundation and ground engineering activities that today are largely outsourced to third parties, while Trevi gains direct access to the group global leading platform, accelerating its own stand-alone plan. Overall, we have identified synergies of approximately EUR 80 million to EUR 90 million of additional EBITDA per year on a run rate basis. This estimate is highly visible. More than EUR 60 million of it is tied to work we have already in hand through our current backlog and our short-term pipeline.

In practice, these are plug and play. The rest is a deliberately prudent estimates of cost synergies. Around EUR 10 million comes from joint procurement, equipment and fleet optimization and logistics plus a further EUR 20 million from leveraging shared service and standardization of central processes. Together with Trevi's own EBITDA, the transaction would bring to Webuild an incremental EBITDA contribution of around EUR 150 million to EUR 170 million and would be accretive to group's EBITDA margin. Importantly, the estimate does not include further expected benefit, which represent additional value creation potential. These are mainly financial and funding synergies, lower cost of debt and improved access to capital markets and bond financing, thanks to Webuild's standing and the strengthening of risk management, compliance and quality and safety controls through alignment with the group standards.

On Slide 20, we show how this transaction creates value also for all Trevi stakeholders. For Trevi and its people, joining Webuild opens a new growth path. The company would gain access to a global platform, operating in around 50 countries with a backlog of EUR 54 billion, more than 85,000 people and decades of experience in delivering some of the world's most complex infrastructure projects. Trevi would plug directly to Webuild project pipeline, gaining volume from day 1 without the commercial cost of winning it. Trevi just completed its financial turnaround as a credible growth plan of its own. With Webuild that path would accelerate. The company would leverage Webuild's international footprint to access new geographies, for example, scaling up in markets such as Australia, where the group has a major industrial presence and to take part in larger and more complex projects.

Let me be clear on one point. We do not intend to change Trevi's identity. We intend to protect it and build on it. Trevi would remain an Italian center of excellence with its headquarters, its people and its know-how firmly rooted in Italy, continuing to serve both third-party clients in Italy and internationally, and Webuild projects while benefiting from stronger risk management, compliance, governance and health and safety standards in line with Webuild. For Trevi shareholders, our offer means certainty in a meaningful premium. The consideration is entirely in cash, EUR 4.5 per share, representing a 29.8% premium to Trevi's the closing share price on June 26, 2026, delivering immediate certain value and full liquidity unlike the ICOP offer whose shares are not yet listed on a regulated market. Certainly, value is a key differentiator of our proposal.

Let me finish on Slide 21. The transaction is structured as a voluntary all-cash tender offer for 100% of Trevi's share capital, aimed at acquiring control and delisting the company and fully integrating its capability into the group. The proposed minimum acceptance threshold is 66.7%, significantly lower than the 90% threshold contemplated by the ICOP offer. In economic terms, we are offering EUR 4.5 per share, valuing Trevi at approximately EUR 295 million of equity, a premium of 29.8% over Trevi's undisturbed share price and a 14.4% over the value implied by the ICOP offer. Unlike the ICOP proposal, our offer is not conditioned on Trevi's lending bank waiving change of control strikes. It is subject only to customary conditions, antitrust clearance, Golden Power clearances and a material adverse event condition. And as I said, it is based entirely on cash rather than shares whose final value depends on future market performance and liquidity. Put simply, our is a more compelling offer to the Trevi shareholders.

Certain cash instead of variable paper, higher value, a lower acceptance threshold and a fewer condition. We expect to file the offer document after the summer, run the offer period in autumn and complete the transaction by year-end. We take this step and the one that we follow in our plan, confident in our ability to meet the challenges ahead in a market that increasingly demand a more integrated approach.

Thank you for your attention. We are now ready for the Q&A session. To keep the discussion focused and efficient, we would encourage questions on strategy and the main initiatives supporting the group's current and future financial performance. For any follow-up question on figures, table or specific technical details from the presentation, the Investor Relations team will, of course, be available after the call.

[Operator Instructions] The first question comes from the line of Michele Baldelli from BNP Paribas.

I have a question on the Trevi acquisition. If you can share at this current moment some details about the cost synergies or the top line synergies, just to give a little bit more color on these targets that you gave on the EBITDA, how much is cost, how much is revenues and so on? And the second question relates to the order intake. So basically, just an update on the outlook for the coming few months until the end of the year. If you can provide a sort of color on what could be the book-to-bill expected at the end of the year or what could be the large contracts still ahead that could be got until December? And lastly, the third question relates to the items below EBIT. You are referring to some write-downs of receivables and also interest from customers on the financial expenses. Can you elaborate how much of the total financial expenses was driven by these kind of one-offs, please?

I think that all of these questions were already answered by the presentation. Probably you arrived later. But let's say that starting from Trevi synergies that are with us. We just said that we have synergies that are firstly related to our portfolio, the one that is, let's say, linked to the around EUR 60 million of the synergies comes from the portfolio that we can share immediately with Trevi. It's given on the slides. The rest is deliberate prudent estimates of cost synergies, around EUR 10 million comes from the joint procurement equipment, the fleet optimization and logistics plus a further EUR 20 million from leveraging shared services and standardization of central processes. So this is around EUR 90 million, but we say from EUR 70 million to EUR 90 million. So that's it a prudent assumption of it. Of course, we didn't take into consideration what can happen to our portfolio in terms, of course, of products that significantly demand the role of a player like Trevi for us. So I think this transaction on Trevi, the synergies that we are seeing that bring us an accretive EUR 150 million, EUR 170 million to the group EBITDA is very prudent assumption. This is for Trevi.

Regarding the impact that you mentioned under the EBIT, we already mentioned it but at the level of the net profit that has been impacted by around EUR 190 million of one-off items, we already mentioned that are not monetary. The first part, EUR 90 million is within financial expenses. Most of this is a deliberate trade-off in favor of cash by waiving interest on some receivables under settlement agreements, we accelerated the collection. So we cashed in the money that we expected renouncing to something, but we added the new work to our backlog. You can imagine that we can refer, for instance, to the Metro C project. And we reduced significantly our claim exposure. The remaining part here is a one-off write-down of certain financial receivables. The second part around EUR 100 million is in losses on investments, which reflect the economic effects related to projects that are completed or nearing completion in North America and Australia. Decisive actions have been taken to contain the risk. Regarding the new order...

What order intake we expect to sign in 2026, we have already a very sound pipeline we said during the presentation of tender that have already been submitted in which we had the best offer, let's say, or the sole offer. This has already also happened. We already secured EUR 7.7 billion of new orders since the beginning of the year. We entered the second half with a very solid high-quality backlog of EUR 47 billion. We are very well positioned on several additional opportunities while other water projects are progressing through the design phase and will be added at the backlog once the relevant facilities are completed. As a result, we remain confident that book-to-bill above 1 is achievable.

The next question is from Matteo Bonizzoni of Kepler.

I have 2 questions. The first one relates to the strong EBITDA margin, which you have posted, which is above 10%, which is above, let's say, the usual range, which in the past you were flagging sort of 8%, 9%. So I would like to know what is the midterm sustainability of this 10% plus EBITDA margin? And also if you can explain a little bit more the reason and the origin, let's say, of this very high margin. The second question relates to the offer on Trevi and the rationale. So just to elaborate with you, Trevi is currently an independent special foundation player as it is Keller or Bauer. We have a case of Soletanche, which is below VINCI. But in general, I would say that in the industry, most players are independent. So I can understand that they will gain more opportunity with you, but I wonder if they will lose maybe commercial opportunities outside the Webuild Group because from now on, they will see as a captive player of Webuild. What are your consideration about that? And also, I would like to know the funding. So if you look at the enterprise value of the deal is in the region of EUR 0.4 billion, EUR 0.3 billion, slightly below equity value and then Trevi has slightly below EUR 100 million of net debt. So overall, close to EUR 0.4 billion, which for you in terms of ratio on the EBITDA is 0.3, so not much, but still, I would say, a midsized move. So what are the options which you are considering for the funding of this deal?

Let's start with question on Trevi. It's not the only case of a player of special foundation that is owned by a group that works for the rest of the market. There is VINCI, there is ICS that also in Australia is a specialist. So there are other example of it, very successful for the group, they work for and for the market. So we think that this model is something that gives exactly to Trevi a good benefit to enjoy our platform, which is much larger, of course, than the one they have alone and the fact that they can benefit from our project pipeline, which is quite large. We are one of the largest operator in the world for infrastructure, where, of course, the special foundation market is one of the key factor for success, for competing, for advantages in terms of synergies that can be had together. So I think that the strategy on Trevi is exactly what we need now. I would say also that this idea of investing in the competence line that we will explain further into the business plan presentation, it is, of course, something that is very important for us, not only in the sector of special foundation, but also in the other segments that are important to our clients and important to the projects we work with. We have a very important internal market, internal demand for these specialties that we now have to outsource because we don't have the resources internally. So we will develop this capability internally, not only as an investment on the market of purchasing company, but also creating these specialties internally and dedicating part of our specialized companies to master this competence line. This you will find in more details, of course, in September. So this is for Trevi. For the other question, Massimo, what was--

Margin. How can...

Funding, Massimo. Funding for Trevi.

The funding right now is, of course, debt with a very, let me say, reasonable cost in line with the average cost that we have on the gross debt. And at the end, we expect to finance the acquisition through a capital market source. Is it okay?

Bond?

Bond, right.

Equity -- Okay.

Not convertible, not equity bond.

Because I received a question from some investors. I'm asking because I was receiving this money...

Yes, for sure. It will depend, as Pietro mentioned before, from -- of course, we cannot anticipate which will be the total amount of Trevi shares that we can receive from the actual shareholders. And then we can have also to view from inside the opportunity to reduce to optimize the total leverage of Trevi and the entire group, including Trevi.

The next question is from Enrico Coco.

My question is on the guidance. The guidance on EBITDA looks really conservative because it implies an EBITDA in the second half below EUR 530 million. You did above EUR 670 million in the first half. And usually, in the second half, you have higher values. So the EBITDA is higher compared to the first half. So it seems to me that I'm missing around EUR 100 million on EBITDA on the guidance side. So I would like to understand if there are particular reasons why you are so conservative on the EBITDA.

Yes. The first thing that you have to take into account is when we say EUR 1.2 billion of EBITDA at the end of the year is not negligible if you see as a marginality. And the fact that the second half is less than what is in the first half, depends on the job mix, which is normal related to seasonality and the project that are done by the company and the schedule of this project. The strong 10.1% EBITDA margin achieved in the first half reflects, as I said, a particularly favorable mix, including contribution for projects with higher profitable profiles. We continue to execute the initiatives embedded in our strategy, aimed at increasing profitability, including greater selectivity in new order intake, tighter project execution control and continued focus on cost optimization. As a result, we still expect full year 2026 profitability to improve compared to full year 2025, confirming the structural progress achieved by the group in recent years. Is it okay for you? You further details?

It's okay.

The next question is from Alessandro Tortora of Mediobanca.

I have 3 questions, okay. The first one is you mentioned before the, let's say, impact in the recent cancellation you had on the Saudi Arabia contract. Can you share a little bit with us what is your medium-term view there because you shared that there is a healthy pipeline in the region. So how do you see Webuild, how do you see, let's say, your commercial pipeline maybe moving, let's say, to some other, let's say, areas with the focus, for instance, let's say, on new sectors like data center also for Saudi Arabia. So just to understand how do you see the project mix evolving in Saudi Arabia compared to the past? This is the first question.

Let's go to the first question. Saudi Arabia is not NEOM and the market is quite large in Saudi Arabia. So I think that the first thing that we have to say that the fact that a decision from the government to cancel a very large investments and do not transform Saudi Arabia into a bad market. We are working in Saudi Arabia for more than 60 years. We have enjoyed a very solid pipeline of important project. We have just finished the metro of Riyadh Line 3. We got a new contract, the Line 2, and we expect good news on further Line 7, probably that we will receive some news in the next coming days. So I think that the market in Saudi Arabia remains for us very important. It's a very large investor. And so of course, we are sorry that they did change their ideas on the project. We were very well executing, I have to say. So it's a pity. But we understand that the project was not only us. Of course, there were an enormous investment, which was related to that and probably the magnitude of that investment in the present situation for -- in the Gulf that means a very strategic, let's say, tourist attractive new very large project, probably time to market is not exactly the right moment to do it. So we understand the rationale that was behind this decision. Now the safer area, of course, of Saudi Arabia. Saudi Arabia, as you know, has also enjoyed a very good, let's say, politic, close understanding with U.S. and they are working together to defend the area. So I think that it will remain a very central part of the world for investment and for us as a competent executive infrastructure builder to serve the nation for their needs.

Then the second question is, if I understood well, you mentioned this year roughly EUR 700 million CapEx for you to support, let's say, the ongoing backlog execution. Should we see this level of CapEx as a sort of peak or I'm also, let's say, linking this to your comment on the focus on cash conversion, okay, increasing focus on cash conversion in the coming years. So should we think about this EUR 700 million as a kind of...

I agree, Alessandro. You can see as a peak.

So let's say, going forward, you should see, let's say, some kind of, let's say, normalized CapEx on sales rate lower.

Yes. As you know, we expected something more as a CapEx for the first half. We achieved a level lower, but keeping the production. So it depends also from the business mix. This can occur also in the second half. This is why I immediately answer that you can consider as a peak.

I have to add that also linked to the cancellation of the connector and NEOM, there were, of course, some investment related to that, that has been canceled. So this is, let's say, an upside on that part.

And then the last question is, you mentioned before that you clearly -- now Australia is really -- it's a big market, second market for you after Italy. Are you happy with the current kind of organization you have, you own 100% of this business. Do you see at a certain point, for instance, the possibility to crystallize the asset value for, let's say, for the Australian business.

By putting the company in the stock exchange there or what do you think?

I'm just asking because today it's pretty big. It's pretty big business. So just understand...

We want to increase the size because, of course, Australia is a very large continent apart from the fact that there are a few people, but it's a very large continent is investing enormously into the sustainable energy. And Oceania, not only Australia, also, for instance, the New Zealand, Tasmania are an important part of this design of expansion. There is also an enormous defense plan in which we are participating. Transmission line for Clough and other specialized activities in the defense and also in the energy transmission are very well position. We are very well positioned. So we think that we can still grow a lot in Australia. We have now 10,000 people working for us in Australia. So it's quite a large company. We are one of the major companies there working. So very happy about that. It's our largest market after Italy. Most probably it will even grow in the very next future. So this is important.

Probably we have the last question coming from Emanuele.

The next question comes from the line of Emanuele Gallazzi of Equita.

I have basically 2 follow-ups on the Trevi deal and then one on your business. On Trevi, I just try to understand if you can, let's say, provide a little bit more color on the time line for the synergies. So basically, when do you expect to be at regime? And you mentioned the EUR 60 million of synergy coming from the plug of Travi on your current project. Can you quantify the weight of the foundation or underground business within the Webuild the total revenues and how much of that work is currently carried out by Travi versus third parties? And still, if you can just elaborate a little bit more on the geographical footprint because Trevi has quite significant exposure to emerging market, roughly 60% of the revenues are coming from Middle East, APAC, Africa and South America, while clearly your focus in the last years has been on lower risk geographies. Then on your business, looking at the U.S. market, clearly, a strong commercial acceleration in the first half. Can you comment a little bit more on the outlook there and the, let's say, the operating performance of Lane?

About Trevi, to give an idea, we have now around EUR 1.5 billion into the business plan of product, let's say, of demand for what are the services of Trevi that can be given. The synergies will start from the 2027. Of course, this is it. And expected time, as we said, EUR 80 million to EUR 90 million of additional EBITDA, of course, we start when we can physically...

We will have it.

We will have it and this is it.

You expect this EUR 90 million to be reached in, I don't know, 2029, 2030?

Clearly from 2027.

That concludes our Q&A session. I will now hand back to our speakers for closing remarks.

Sorry, sorry, there is another question. Regarding the U.S. outlook on Lane is favorable both because we already achieved the turnaround in 2025. As you mentioned before, we got a very good and excellent commercial performance. And the market is very interesting. It's mainly a single-state market and where Lane is very established and established since a long time, they are getting very profitable new job, and we have a very good relationship with the client. So we expect something very good coming from U.S., but let me mention also the Canada market where we are doing a lot of commercial activity. We are running very important project and the pipeline could be very, very interesting for also the new business plan. It's okay Emanuele?

Emanuele is now offline, but I think he could hear your question.

Okay. Anyway, I think that for the Q&A is okay now. And every other question you may have, you may simply ask to the Investor Relations and we'll be happy to answer to all other questions. Thank you very much, and we wish for you happy day.

Happy summer, and have a good day.

Good morning, and welcome to the Webuild Full Year 2025 Results and 2026 Outlook Conference Call. On today's call, we have Pietro Salini, Chief Executive Officer; and Massimo Ferrari, General Manager, Corporate and Finance. Please note, this conference is being recorded. [Operator Instructions]

I will now hand you over to your host, Pietro Salini, to begin today's conference. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining our Annual Conference Call. It is a pleasure to be here with you and to celebrate the conclusion of our 3-year business plan.

Let me begin with some context. The past 3 years have been exceptionally complex. Unprecedented inflation affecting both our geographies and the core component of our operation, a significant increase of interest rates and currency volatility, geopolitical structure changes, supply chain bottlenecks and persistent labor constraints. Notwithstanding that, we've not only delivered well above plan industrially, financially and commercially, but it also went through a structural transformation.

Now you have in front of you a new company with significant higher scale and unique execution capabilities on high complexity projects, an order backlog among the strongest in the industry, both on size and quality. Webuild has become more profitable, proving to be resilient and strongly derisked with a strong balance sheet and we focus on cash generation. Last but not least, we delivered 160% of total shareholder return over the last 3 years.

Now let me walk you through the evidence. Slide 4. Moving to Slide 4, starting with execution. Over the plan period, more than 45 infrastructure projects were delivered across multiple countries. Many others have started despite some challenges and are being carried out according to the plan. We are talking about some of the most complex infrastructure worldwide that improve quality of life for millions of people.

One example is the Grand Ethiopian Renaissance Dam, the largest hydropower facility ever built in Africa. We also delivered strategic projects for sustainable mobility, Milano Metro Line 4, Riyadh Metro Line 3 as well and the new bascule Unionport Bridge in New York. Today, Webuild is the leading infrastructure player in Italy and one of the top players in Europe and Australia. Globally, the group is #1 in water sector.

Our unique and integrated set of capabilities make the real difference when complexity is high, from advanced engineering procurement to large-scale project management and in-house construction technologies. This is the reason why clients continue to select Webuild as their partner. This success is powered by people.

In the last 5 years, Webuild hired and upskilled more than 14,000 people each year all around the world. This shows our ability to attract talent and our structural contribution to local economies. Today, around 95,000 people work for the group. Thanks to scale, Webuild is able to develop internally highly specialized skills, skills that are difficult to replicate in the industry. Over 3 million training hours were delivered across the plan.

Safety remains a cornerstone. Webuild is the top performer among European peers in health and safety. And this is our distinctive marks in more than 50 countries. Our lost time injury frequency rate improved from 2.79 in 2022 to 2.23 in 2025, which is a significant improvement.

Our global activity is supported by a supply chain of 17,500 companies worldwide. A qualified supply chain is the key enablers of execution. It offers the resilience to navigate global uncertainty. It also drives efficiency and innovation across projects and local communities.

Slide 5 shows two clear and simple messages. One, the financial targets set out under the plan were outperformed. Two, the improvement in profitability is not a one-off. It's a structural result of the new business model. We delivered faster growth.

Revenues grew annually at 19% versus the 10% expected into the plan, reaching in 2025, EUR 13.6 billion compared to the EUR 10.7 billion planned by the business plan. ForEx was a headwind. At constant 2022 exchange rates, revenues would have been EUR 1.5 billion higher. This represents a remarkable 68% growth compared to 2022.

Profitability improved significantly. EBITDA margin increased from 8.6% from 7.2% in 2022. EBITDA reached EUR 1.2 billion, above the EUR 1 billion planned target, more than double 2022 levels.

Three structural levers explain this improvement. First, stronger contract management and derisking. Our contract model was redesigned to identify and address risks even earlier than before. Price revision formulas are now included in most of our contracts. New contract models such as progressive design and build and incentivized target costs were adopted, particularly in North America and Australia. Webuild has been able also to renegotiate some of major contracts on the backlog in order to rebalance risk and return.

Second, cost discipline. Through disciplined overhead and indirect cost management, we delivered EUR 200 million of savings above the EUR 180 million planned target.

Third, Lane turnaround. Lane reached EBITDA breakeven in 2025. It refocused on core markets, selected lower risk work, tightened controls. Its legacy projects are almost completed with the settlement of claims underway. Lane is also doing very well in terms of order intake.

Slide 6 is about financial discipline and balance sheet strength. Gross leverage declined sharply from 4.5x in 2022 to 2.6x in 2025. Net cash stood at EUR 770 million at year-end 2025 on a normalized basis, adjusting for ForEx and a cash-in that slipped into early 2026. This was achieved despite EUR 2.5 billion of CapEx strategically invested in equipment such as tunnel boring machines, which expand capacity and support future cash generation. We did not just stay with a positive net cash position as targeted in business plan, a meaningful net cash buffer has been built. Credit markets recognized this progress. Fitch and Standard & Poor's upgraded us to BB+, a double notch improvement in 3 years.

Slide 7 covers commercial performance. Order intake exceeded the planned target by EUR 13 billion. As a result, construction backlog reached EUR 51 billion at the end of 2025, one of the highest in the sector. But it's not about size. The [ matter ] that counts is about quality. The backlog has been progressively derisked, thanks to a greater focus on developed markets, which choose the market where to operate, a more balanced contract structures and a selective bidding where 80% of tenders were awarded to us on best technical offer, not on price, thanks to our execution capabilities.

The outcome is a larger backlog with a significantly improved risk profile and higher earning visibility. Before handing over to Massimo, let me highlight the most important point. The platform is built record backlog, people, capability, governance, risk discipline, partners, financial strength. The next step is to leverage this platform for a sustainable and selective growth, improvement of marginality and cash generation.

Massimo, over to you.

Thank you, Pietro. Before I go through the results, let me remind you that we are presenting the recurring performance of the business. You can find details of the adjustments in the presentation appendix.

Let me start with Slide 9. As Pietro mentioned before, Webuild delivered double-digit growth in revenues, EBITDA and EBIT in 2025. Revenues reached EUR 13.6 billion, up 15% versus 2024. 67% of revenues were generated outside Italy. EBITDA reached EUR 1.2 billion with an 8.7% margin and EBIT rose to EUR 705 million with a 5.2% margin. Both EBITDA and EBIT margins improving year-on-year. Planned targets were exceeded and results came in above upgraded 2025 guidance, as you remind. Net income reached EUR 280 million, up 13% versus 2024 despite a significant negative ForEx effect.

Let's see in detail some P&L lines. Financial income was EUR 126 million, down EUR 60 million, mainly due to a reduction in average balances of deposits with banks. Financial expenses decreased by EUR 24 million. This drop reflects, among other factors, the lower utilization of corporate credit lines, the lower cost of variable rate debt and higher expenses related to the bond issued in 2024 and July 2025.

The net exchange result was negative for EUR 73 million, impacted by the performance of U.S. dollar, Saudi real and Ethiopian birr against euro. These effects tend to end up being neutral over the course of the year and most of them are non-monetary.

Slide 10 focuses on the streamlined of the cost base. The structured cost efficiency plan on indirect and overhead costs generated more than EUR 200 million in savings. That is above the plan target of EUR 180 million. Multiple initiatives contributed, optimization of external spending, shared service among projects, automation, branch rationalization and project-specific actions. This is not a one-off effort.

Cost discipline remains a structural priority for the group. The focus on cost efficiency will remain in place in the coming years with continued actions on overhead and indirect cost project and also we will start on the direct cost of the project to support margins and cash conversion, mainly leveraging on innovation and also artificial intelligence.

Turning to Slide 11. Reported net income stands at EUR 240 million, plus 23%. Over the last 3 years, over EUR 205 million in dividends were distributed. For 2026, Webuild is proposing EUR 0.081 for ordinary shares and EUR 0.26 for savings shares for an overall amount of dividends of around EUR 80 million with a payout ratio around 25%. It would imply a dividend yield around 2.7% at current share price.

Let's move to Slide 12. Our net financial position stayed strong despite significant CapEx of around EUR 960 million, so approx of EUR 1 billion in 2025. Reported net cash was EUR 363 million at year-end. There are two temporary effects that impacted the reported net cash, foreign exchange effects and just a timing effect linked to a Dispute Adjudication Board's decision on an Italian project. The cash-in was expected to occur in 2025, but it was received at the beginning of 2026.

Normalizing by these two effects, net cash would stand at around EUR 770 million above our EUR 700 million guidance. EUR 700 million.

This year, advanced payments had a negative impact on the net financial position for around EUR 300 million. There was an important part of the order intake that came at the end of 2025, beginning of 2026 with advances will be cashed in 2026. So year-end net cash remained at the strong despite high CapEx and advanced payments being a net outflow in 2025, making these results even more significant.

On Slide 13, there is the balance sheet. Fixed assets increased due to CapEx plan. Working capital reflects the strong growth in production activity as well as the reduction of advances I told earlier. Equity declined mainly due to losses attributable to non-controlling interest and to effect of the U.S. dollar performance mainly against the euro.

Gross debt remains stable at around EUR 3.1 billion. Gross leverage continues to strengthen, reaching 2.6x, a significant reduction from 3x level recorded in 2024. It compares to peers at around 4x on average.

Moving to Slide 14. Our financial structures remain robust. This is confirmed by the upgrade received by the rating agency mentioned by Pietro, before. Our total liquidity position remains strong at EUR 2.4 billion (sic) [ EUR 3.4 billion ].

Revolving credit line stands at around EUR 950 million. In 2025, EUR 450 million debt were refinanced. Cost of debt stands now at 5.1%. Our debt maturity profile is well -- very well, let me say, distributed through 2031 with an average debt duration of 3.4 years, mostly at fixed rate. This shield us from any market volatility in the short term.

Going to Slide 15. Let's have now a look at our commercial performance. Order intake in 2025 was EUR 13.2 billion. In early 2026, around EUR 2 billion new projects have already been awarded.

Quality is key. More than 90% of 2025 order intake comes from low-risk countries. The geographic mix is well balanced with roughly half outside Italy, confirming our international footprint across Europe, mainly North America, Australia and Saudi Arabia.

Slide 16 illustrates our order backlog that amounted to EUR 58 billion. It includes EUR 7.5 billion of backlog in concessions and operation and maintenance business. Construction backlog stood at EUR 51 billion. It gives us visibility and predictable revenue development. Around 90% of this construction backlog is located in low-risk markets. The vast majority of our clients are public and most contracts include inflation protection mechanisms through price adjustment formula that we mentioned before and in other meeting or conference call.

I now leave the floor to Pietro to introduce the guidelines for future developments.

Thank you, Massimo. Before I start with the outlook, we are planning an Investor Day early June to present the new 3 years business plan.

Let me highlight that this backlog covers 100% of the actual level of revenues in 2026 and '27, and a very large part of the portion of 2028. So we have a great visibility. This is very important in the present scenarios.

Let's turn to Slide 18. Scale matters today more than ever. I think of it this way. Every year, we generate about EUR 1.8 billion of additional revenue. That is like creating a top 50 European player year-after-year and adding it to Webuild. Scale means flexibility. It means resilience. It means the ability to stay disciplined when the environment becomes more volatile.

The next question mark is infrastructure demand. We see demand remaining very strong.

Moving to Slide 19. The megatrends that are fueling infrastructure investment are clear: climate and energy transition, water security, urbanization. The new drivers are accelerating, defense infrastructure, digital infrastructure and artificial intelligence. Webuild is positioned to address these trends. This is visible in the numbers you can see on the next slide.

In Slide 20, our near-term commercial pipeline stands at EUR 91 billion. More than EUR 19 billion are tenders submitted and awaiting outcome. Around EUR 9 billion of tenders are under preparation. But the key point is not just volume. It is quality and risk profile. The demand is there, it is visible and it's concentrated in the markets where Webuild is the strongest. We are in a position to be selective and disciplined on risk-adjusted returns.

As closing remark, EUR 9 billion of the commercial activity are in areas currently affected by the military conflict in the Middle East, in Saudi Arabia. We are closely monitoring the latest development.

Turning to Slide 21. This slide brings together the key elements underpinning our 2026 outlook. We are entering 2026 with scale and global footprint, industrial visibility supported by the order backlog and the demand that remains strong. At the same time, with the conflict in Middle East area, the global order is experiencing a new profile.

Let me first clarify that our activities in the area are currently limited to Saudi Arabia, where operations continue regularly and safely in agreement with clients and with our security protocols. The fundamentals of our business remain strong. But considering the current geopolitical and macro backdrop, we have taken a prudent approach, providing 2026 guidance on a directional basis. Revenues are expected broadly in line with the record level reached in 2025. They are supported by the significant backlog and global footprint.

The focus remains on improving margins, strengthening operating cash generation and maintaining a positive net cash position. That said, the group is already looking beyond 2026. Record backlog, people, capability, risk discipline and strong balance sheet provide a solid starting point for the next phase.

Thank you for your attention. We are now ready for Q&A session. To keep the discussion focused and efficient, we would encourage questions on strategy and the main initiatives supporting the group current and future financial performance. If any follow-up questions on figures, tables or specific technical details from the presentation, the Investor Relations team will be, of course, be available after the call. Thank you.

[Operator Instructions] The first question comes from the line of Emanuele Gallazzi of Equita SIM.

I have, let's say, three questions. We can go one-by-one. The first one is on the Australian business, basically because looking at the commercial pipeline you reported, there seems to be a strong acceleration in the opportunities over there. Can you just update us on the country and on how the execution of your main project is going?

This is Pietro Salini speaking. I'd say, we have no effect now on our projects ongoing. There is no particular effect. I told you before that the only project that is inside the area of Middle East is our projects in Saudi Arabia, which is a very safe country and they are going as on business-as-usual basis. And of course, we look at the present situation with a prudent approach, but I don't see any practical effect at the moment.

That was my second question. Actually, my first question was on Australia, not the Middle East, but even the Middle East was my second question. So, on Australia if you can comment on the commercial opportunity over there.

There is a very large pipeline in Australia. This, of course, as you know, Australia is becoming our largest market and it is a pipeline not only of an important pipeline of projects, but especially a very important pipeline of project of complexity and scale, which are the project in which we perform best, in which the experience and capability and competence of Webuild are having an advantage on competition.

I think that we are working closely with clients on a number of very large projects in a way of looking at the project together and to be selected in the future as their contractor. I think that this is the way in which you minimize risk and you can maximize or, let's say, a very reasonable margin of return from those projects with diminution -- a very important diminution of risks.

Very clear. And my last question is on the M&A. I think during your last conference call, you rolled out basically big M&A. Is it still the case? Or are you looking at something, let's say, more material on this side? We clearly have seen the press reported potential interest for Rizzani, but any comment on this side will be helpful.

We are, of course, opportunistic. We see where we have a special opportunity. And we look at vertical integration possibilities that could implement the EBITDA that remains inside the group for sectors like special foundation design and other possibilities in which the services that we purchase outside of the group are important every year. So I think that the first thing, of course, is to remain cash positive. This is the essence of the plan -- with the plan, so of course, we have to limit our appetite in this sense in order to remain in a situation in which the rating agency expectation remains inside the metrics that they have designed for us.

And this is for us a very disciplined approach to the market. As you know, we have limited equity and so we have to remain inside this frame in order to remain with the present upgraded financial profile.

The next question comes from the line of Andrea Belloli of Banca Akros.

I just got one on Lane. If can you give us some update on the Lane's turnaround and maybe more in general also on the U.S. market?

Thank you, Andrea. This is an important question because for us, Lane was in the past, not only a potential activity, but also a source of problem. We have to solve legacy project that in the past have underpinned our performance there. And now finally, we changed the people. We put a very good team there. We made a completely different pipeline of order intake with a selective approach to projects, also teaming up with Webuild tendering departments. And I think that we -- these things are now going to pay out, and they are paying out in this year with the turnaround.

The market in the U.S. is booming. We can see that from the very beginning of the year, we had a very exciting -- I cannot say the project specifically, because the clients didn't allow us to make the disclosure so far. But I think that we have already done the plan for what was envisaged into the order intake of Lane just in the first 2 months of the year. So I think that the situation for Lane in U.S. now is very bright.

And we see a number of products of the scale, magnitude, the partnership that we want to have. So I think that being now in U.S., it is something that also gives us an additional strength into this present worldwide scenario being such -- being having these strong pillars, one in U.S. and one in Australia. I think it's very well balanced to the rest of the world in terms of visibility and in terms of also predictability.

Absolutely correct what Mr. Salini said before. Let me add that the market is booming, notwithstanding the situation. We are not, of course, affected by tariffs because we are working with a U.S. company. And we are working also in some areas that are defense related where Lane was present before with a very successful story.

The next question comes from the line of Matteo Bonizzoni of Kepler Cheuvreux.

The first question relates to the book-to-bill. Your book-to-bill was very strong in 2021 and 2023, also driven by key awards in Italy. Then it flattened to around 1 in 2024 and '25. My question is, what is your outlook for the book-to-bill in the next year? And also if you want to provide maybe some color between -- on the outlook in Italy versus other countries? And also, I'm curious to know, you mentioned just in the last question, U.S. Are you looking also at some opportunities, I don't know, in growing area like data center or this growth business segment, let's say, which would be new for you in any case?

Then the second question is, these are two numerical questions, but on very relevant topic. So I would expect the company to answer to this question. CapEx in 2025 approached EUR 1 billion, so EUR 960 million. Can you provide an indication for '26?

And finally, working capital consumed just over EUR 0.5 billion of cash flow. Also in this case, what is the outlook for the net working capital evolution next year, in particular in relation to the delta between contract assets and contract liabilities?

Yes. For the numbers, I will leave the floor to Massimo and to the team. But for the -- of course, in the business plan that we present to the market early June, as I said, you will have all the details of the new business that in the next 3 years and that will make Webuild even more productive in terms of marginality and cash. So I think for the time being, we cannot give colors. I say that in the present situation, one thing I want to take off, is that we are not giving a precise guidance for the 2026 not because we do not -- we think that there are risks.

But we think that in this situation, giving a precise guidance on cash flow that is done day-by-day and without taking into consideration the possibilities that the client have to as a reaction to the present situation is, it is unprofessional. I would say that we are looking at the present turmoil as a tipping point in where the world is and then giving precise numbers, notwithstanding the situation is unprofessional. So I have no fears, because as I said to you, the present backlog gives us a very important visibility over the next 3 years, not only on '26.

So we could give them simple numbers that are out of calculation on what is the revenues and the investment and whatever else connected to the backlog we already have and then the contract we already have to perform. But I think in the present scenario, this is unprofessional.

So let's say that we hope that in June, all the situation will be clear and along with the business plan, we can also stick to numbers, as we said before, as we always have done in the past and that we outperform every time that we have given even if they were higher than the expectation of the analysts and the people that follows us.

So please, Massimo, do you want to...

So regarding the working capital, we expect for 2026 a positive contribution. This should be supported by the cash-in of advances on projects awarded in 2025 and early 2026, as mentioned by Pietro, also by some Dispute Adjudication Board decision. So the contribution that we have in the budget is very material for the working capital.

Regarding -- let me just confirm and give you some other color on the book-to-bill. 2025 was another very strong commercial year with, I mentioned before, more than EUR 13 billion of new order.

We also enter 2026 from a very strength position, supported by a solid backlog. This means we do not feel pressure on order intake in the short term. We can remain selective with a clear focus on margin quality, cash conversion and risk discipline.

When I look at the commercial activity also in Italy, we are -- we already submitted or we are studying and submitting many billion of new potential order. We have still some order that could come from Saudi Arabia that is the main or the only market in Middle East where we are very active.

And as Pietro mentioned before, the commercial activity was particularly strong, and we already paid for engineer, project advisers and so on, mainly in Oceania and North America. Oceania, meaning not only Australia but also New Zealand, for instance.

So the market also in Italy, we can be selective. There is no more support coming from the PNRR, but there are some other very important projects that will be interesting for us and supporting the GDP growth for the Italian country in the coming years.

So did we miss something in your question, Matteo?

No, no, it's okay. On the CapEx, maybe you have answered, I was not -- I was distracted. Have you indicated the CapEx for this year?

Yes. This year, we expect around EUR 900 million and that we spending that, the cash -- the net cash position we expect will be positive.

The next question comes from the line of Alessandro Tortora of Mediobanca.

I have, let's say, two questions, okay? So the first one, let's say, just a clarification on, let's say, the current sales outlook for this year. So basically, the assumption is, let's say, to assume a stable, let's say, sales, which means also that the contribution you see, let's say, from Middle East today is assumed, let's say, as pretty stable. So just a clarification that, let's say, roughly over EUR 1 billion sales from Saudi Arabia is a contribution that you see, how can I say, not affected by the current situation in Middle East. This is the first question. And then I go with the second one.

Sorry, we missed some words, for the line that was not clear. You were asking us -- can you repeat it shortly? Sorry, Alessandro.

Sure, absolutely. See, see, Massimo, it was not related to, let's say, to your guidance on sales. Now whether you are guiding, let's say, this stable, let's say, sales level. So the assumption, let's say, behind Middle East and for Saudi Arabia is basically today, let's say, awaiting, let's say, any further update on that area, you are assuming basically also a stable contribution from Saudi Arabia and your sales assumption.

Yes. I think that for the time being, we don't assume any negative effect on what is coming out from Saudi Arabia. I think that due to the situation in the oil, even if the price of oil, even the investment in Saudi Arabia could even improve or being larger. I see that we can expect some positive outcome in some part of the world, not only negative outcome. So let's see what happens. For the moment, we have no particular worries coming out from Saudi Arabia.

In general, as Pietro mentioned before, we are considering very seriously the situation, the global situation not only for just one country or one variable because it's a very discontinued point in the global order. So as the VIX and the volatility in the market, all the markets is telling us, is very prudent and very serious to look at the evolution of the global situation in order to disclose any more punctual target.

Understood. And then -- sorry, the question was -- the second question was on -- you mentioned before the work you did over the last 2 years on changing and having effective contract formulas. So the question relates mainly, let's say to two important projects you have in your backlog. Clearly, the first one is Snowy 2.0, when I read press article mentioning that it is going to come some kind of project cost reassessment. So just your view on this because I recall it now that you changed the formula. So if you believe that, let's say, this new format is able to protect you on this cost update?

And the second question is on Trojena -- Trojena Dam. I recall it, also in this case, some press article mentioning that, let's say, spending in the region was shifting for downsizing the line, maybe changing the scope, focusing on data center. So just to understand also your view on these two projects, which are not pretty big for you.

Sorry. Microphone shut down. I didn't see it.

I'm saying about Snowy, I think that we told before and everyone that we made a re-contract -- a contract reset with the client changing from a remeasurement contract with target cost plans, which, of course, changes the risk apportionment and the marginality of that. This is a positive outcome. The contract is performing well and the appetite for contract of this type of [ contract ] in Australia is growing.

They want to invest into sustainable energy and sustainable energy without this type of pumped storage, do not have the same effectiveness. So I think that this will not only be a very important plant for Australia, but also will be something that we can leverage on around the world. We have done a fantastic job there, and we are doing a fantastic job there.

So I think that Australia is looking at the relationship with contractors in a different way, the partnership and this is another very important in which you change the risk apportionment so far. You remember many contractors in the past had problems in Australia. But at the end, the government understood that it is not on a confrontational basis that you solve your infrastructure in a different way in partners shipping. And this is what they are doing with us and with other contractors at the time. So I think that Australia is a very important market for us in the future. And is doing exactly the type of complex infrastructure that we are best at doing.

Out of Snowy, what already mentioned before in the speech, it's very important that we are adopting a very different contracts model also for the pipeline. This is very important because the cost of the engineering commercial activity and also the structure of the contracts if we are able to win it. So the environment around the world, mainly in Australia, but also in the U.S. and Canada is changing rapidly and it's very consistent with a different business model that could generate more stable cash in the long run.

Massimo, if I can add on NEOM because this is something that has been on the press, the rumors about scale down of NEOM. For now, the payments of Trojena have been so far regular. Production is progressing well. There may be in the future some slowdown. We cannot predict it, but a change in the scope of the project is not foreseen at the moment. Anyway, we expect that the market in Saudi Arabia as we physically see now, it is important. So if the governments are reducing on the one side, probably we'll have different projects in other area where we are present like in Riyadh, for instance, in Diriyah, where we are very large contractor there. The Saudi infrastructure market remains highly significant. We have witnessed a shift in funds to initiative aimed at developing Riyadh and in preparation for the Expo 2030 and FIFA World Cup 2034.

All right. So there are no more questions at this point. I will hand it back over to the speakers for any closing remarks. Please go ahead.

Thank you for attending this call. Of course, we are very positive in the future, especially on the business plan that we present. To us, at the moment, I repeat because it's important that we create the platform. We outperform our business plan '23, '25 in a substantial way. And I think that the condition for the future are very similar for the 2025, 2028 business plan in which finally the scale, the dimension, the competence, the people are now there and that we can extract from that platform profitability and cash.

This is it. Thank you for attending the call and see you at the Investor Day in early June.

Thank you very much. Have a good day.