A2A S.p.A. (A2A) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to the update of the strategic plan of A2A. Our CEO; Mr. Mazzoncini on the basis of the good results of 2021, we'll present the new strategy, which is based strongly on sustainability. The CFO, Andrea Crenna, will outline the economic and financial results. After the presentation, there will be a Q&A session diverted to financial analysts. At this point, I'll hand the floor over to Renato Mazzoncini.

Thank you very much Renata, and welcome to you all, and welcome to this presentation of the upgrade of our industrial plan. Now we gave the presentation this title beyond expectations because as a matter of fact, we closed 2021 with results beyond our expectations. And this gave us strength to update the plan and the plan that we are now going to outline. Now 12 months have up ever since we met only 29th of January for the presentation of the 10-year plan A2A. And we have seen 12 months announcing after the launch of our life is our duty, which is becoming a guide for us for our mission for our activities and which is guiding all of our strategies, which the company is implementing. For this reason, I'd like to start by dwelling upon a number of simple data. We have seen the end COP26, and we're convinced that we were capable to get to 2050 with a net 0 emissions. And after the COP26, we all know that the target of limiting the increase of climate temperature to 1.5. However, after COP26, we have not real clear ideas about the trajectory to be followed, especially from a technological point of view. But a few things are clear. You see on the left chart, we still have 64% of use of fossil fuels. Electrons is still marginal at 21% of electrified energy. 11% is represented by bioenergies including biomasses, biogas, biomethane synthetic or artificial fuels. So we need to move towards the world that if we want to have a decarbonization in 2050, electron has to reach 51%. And then we need to move up with bio energy to 30% with the biofuels. So a company like ours, which is active and which invests both on electrons and on green molecule has a very important role to play. Well, a natural hedging between these components is actually there because as we will end up in 2050, we do not know as yet. But there are elements that are intertwined between them, including fossil fuels, which will remain used inversely proportional the growth of renewables, electron and molecules. Well, these are components, which are included within the activities of A2A. And this is something on which we have to work. If we look at a snapshot of our country, we find ourselves in a situation whereby next 10 years, we have to make some EUR 4 billion investments for waste to reduce a landfilling, which is still very important, 17 million overall tonnes. We presented internal bill at the Ambrosetti conference last year, we presented a report on the need to close the infrastructure gap and there are a number of investments that we are going to make. We need to increase renewables by 70 gigawatts. And this is the topic of the day. Gas prices increase tell us that we need to accelerate on the use of renewables. And our plan here is very strong, as you know. Let me also tell that within this plan we shall find the 3 new elements that we have developed. Bioenergy, hydrogen and e-mobility and recharging infrastructure. These are topics which in January last year, we announced them and which now have turned into numbers, economic numbers, CapEx and EBITDA. So very important numbers behind our plan. Now on this issue, last year, we presented the curve of decarbonization, which is certified by science-based targets. In 2017, 425 grams per kilowatt hour produced. In our last plan, a target for 2030, 226 grams of kilowatt hour produced -- kilogram -- 216 grams of CO2 per kilogram hours produced. Now you would see that with the renewables, our target has improved going up to 216. And then an announcement in which we are now working is that we want to reach net zero emission within 2040, 10 years in advance versus 2050. So we opened up the plans to get to net zero emissions. Please remember that we have this topic. The number 2016 of 2030 is the average between generation with the development renewables goes down considerably. You know that without any kind of activities or intervention without carbon capture decarbonization or shifting from fossil fuels and renewables, we go down to 216 in 2030. So very, very close to the curve of 1.5 degrees. The curve of 2 degrees to give an idea, will lead us get to 230 grams per kilowatt hour, whereas 1.5 -- the curve of 1.5 degrees leads to 130, you realize this is very close to 1.5 degree. What keeps us far is the part of and waste to energy, which has a very important element to be taken into consideration based on ISPRA data, this waste to energy plants reduces by 44% of the emissions of CO2 versus the emissions produced by landfills. And so if you consider that the main goal of waste to energy plants that of resolving the problems of landfilling. As of today, we are speaking of a technology, which allows us to reduce CO2 emissions. This being said, in order to reach net zero, we need to work on reducing to zero the emissions of CO2 of waste plants using technologies like carbon capture decarbonization strategy after the use of different technologies like waste to chemicals and the like. So -- as we said and as we showed last year, you have here the comparison with the old plan, the plan that we presented 12 months ago. We maintain the target of emission reduction. You see that there is a slight increase in terms of the use of renewables. This is on top of our business plan, plus 3.9 gigawatts in the plan versus 3.7 gigawatts in the old plan. This is a confirmation of the millions of tonnes, which are managed speaking of waste confirmed than the millions of tonnes of CO2 avoided. And then as you can see, the increase in [indiscernible] in line with the UNSDGs. When it comes to economics you see quite important changes EUR 16 billion, that were announced in the plan, '21 in 2030 become EUR 18 billion, a cumulative CapEx. Now thanks to the results of 2021 that we should see in a minute. Then when it comes to these EUR 2 billion CapEx more and how we are going to investment, they, of course, generate a greater EBITDA at the end of the plan, you will see EUR 2.9 billion and then a growth by 9% of the net income on a year-to-year basis. We then maintain a good ratio between net financial position and EBITDA, 2.6x at the end of the plan. And you can see the 7,000 hirings in 10 years instead of around 5,000. So we find ourselves with a population of our employees, which have grown by some -- which are going to grow by some 1,000 people, but also younger people on a total out of 13,000 at the moment, which are going to become 15,000 at the end of the plan. So let's look at 2021. In 2021, we had a strong formidable acceleration on renewables. When we met in January last year, the main question during the presentation or during Q&A was the following. Well, you are basically at 0 when it comes to photovoltaic and wind energy. How do you think you can accelerate here. We started with a strong but robust component of hydroelectric power but with very, very low photovoltaic production. Well, this is the answer. This is a target that we set for ourselves for 2024, 2 years in advance versus the plan targets. 2.6 gig of installed capacity with 3 transactions that were very important. Octopus acquisition at the end of the year, in February, which includes one of most important solar farm in Italy. And then the transaction announced last week, the acquisition of [indiscernible], Ardian new for now with an overall are minorities of 60 megawatts installed, all of this, mostly in Italy with 2 relatively small plants, but which are very important. And then in Andalusia Catalonia in Spain a solar plans. Now this acceleration then produces effects on the green energy producer that we should see later on. This was not on the only transaction or deal in this sector. Last year, we created a pipeline. Last year, we asked a question about the pipeline. Last year, we had 0 pipeline. This year, we have to create a pipeline of 2.5 gigawatts, which is a pipeline made up partly of the internal activities made our group on renewables, which is growing and then acquisition of Volta Green Energy announced a few weeks ago, which is a company which has been actively working for years in the world of renewables, which gave us a very significant pipeline, which is also important for future developments. We have also worked on flexibility of the system. We have received 4 authorized upgrades [indiscernible] versus the 2 that were announced in the previous plan. We had the authorization of the Cassano Peter, as we had announced, and we have also the authorization for 3 battery or chemical battery storages in Gissi, Chivasso and Brindisi plants. Well, meanwhile, another factor, which is very meaningful is that we have continued to grow in our country. Well, at this point, we can announce the third phase of the life of A2A, we started from our local territories Brescia and Milan in the past 10 years, it became a multi-regional multi-utility by including a number of stakes at a regional level. And now our national presence is very strong. In particular, the acquisition that we made in the south of Italy in the field of waste, the big plant of and then 3 new [indiscernible], which are present in Apulia Campania Sicily and Sardinia. Well, this leads to become a leading national player considering the plants that we have had for many years in the rest of the country as well. And also thanks to the increase of A2A energy customers. Now we have customers in 4,700 municipalities and over 4,900 municipalities in Italy. We are the top regions in terms of industrial assets, which is Lombardy followed by Piedmont and Calabria. Now these are the innovative of the new plants that we have acquired this year. Now this -- the data speak for themselves. Well the company was used to have a stable EUR 700 million a year in terms of CapEx and M&A in 1917 -- sorry, 2017, 2018, 2020. In 2020 despite the pandemic, we accelerated our investments and we reached historical figures. We gave ourselves a goal of EUR 2.3 billion of CapEx in 2021, it was very ambitious. We did this when we did not have any idea about the explosion of the pandemic. And we closed the year with EUR 1.7 billion of CapEx. Please remember that within this, we do not have the investments of 3 new, which are EUR 620 million, which are classified indicated for 2022. Now both the growth of industrial CapEx, adding EUR 1 billion and the growth of M&A, please remember that here, the main items are investments in Octopus, the acquisition of shares -- of our own shares, buyback shares to consolidate 100% LGH. And then we have EUR 280 million for investment in [indiscernible] the closure of payment for Agripower. So you see a number of relevant transactions. Another important factor is that after many years of stable EBITDA at EUR 1.2 billion. This year, we are closing the year, then we will have the definitive data that we will make after the Board of Directors meeting on 22nd February, but the guidance is stable around EUR 1.4 billion of EBITDA. And the difference versus, what we had in previous years is quite clear. Obviously, these 2 factors have given us the awareness of the fact that we could further accelerate in a 10-year period, which I believe is key. And the reach of opportunities for companies like us looking at the circular economy pillar, let me continue to talk about the plan, 2 pillars, the circular economy and transition. As far as the secular economy is concerned, we increased our investments by EUR 1 billion, mainly because under the circular economy pillar, we have added biomethane and hydrogen. And I'll explain you later why hydrogen, why did we decide to include hydrogen and this is the unit EBITDA is 13% vis-a-vis the previous plan. And here, you see energy recovery and bioenergy as key indicators Well, mainly because of material recovery, well, we confirm the target of the previous plan, where as far as Bioenergy is concerned, we expect it to reach 4.7 million tonnes by the end of the plan. which generates energy recovery growth of 35%. As you know, bioenergy has a direct impact on waste-to-energy with biomethane but also with the composting and byproducts. So the strategic pillar of our growth is confirmed. So we expect to boost material recovery and energy recovery. we implemented an important we need to, including, however, hydrogen production and bioenergy production -- and here you see in greater detail what our plan factors in as far as material recovery is concerned. EUR 600 million cumulative CapEx, EUR 110 million EBITDA. Here, you see that the organic fraction is growing the most. During the Q&A session, Andrea will be able to provide you with details. We are planning a reduction of M&A in this area, and we plan to increase the development of greenfield projects. in terms of CapEx and how we are changing the mix of our CapEx. As for energy recovery, we have EUR 2.8 billion CapEx cumulative figure. So we confirm the investments that we had factored in, in our strategic plan as far as waste to energy plants are concerned, 2021 was a very important year in this regard. We showed our interest for the development of a waste-to-energy plant in Sicily. We are going to bid for the development of plants in Umbria and Lazio so in the Central Italy. And we are still counting opportunities abroad. Coming to biomethane, the reason novelty we are not going to rely on the organic fraction of urban solid waste only. Here you see 3 stages: feedstock collection production and liquefaction as far as feedstock collection -- of course, we do not grow dedicated crops ourselves, but we use by products. So we work with producers of crops and all the agricultural and the livestock waste can be used as a feedstock for biomethane plants. Currently, we already have 20 plants, biomethane plants following the M&As completed in 2021. So Linear Green SHGH. Our plan aims at upgrading all the biomethane plants to reach at least 60 plants within the planned horizon, time horizon. You know that biogas need subsidies. So this means that the current plans will have to be upgraded. Currently, we produce 1 billion cubic meters that are then dispatched through the Snam grid. Italy has a potential between 8 billion and 10 billion cubic meters. And so we really aim at becoming one of the major players in this area. As for liquefaction, this is also a necessary stage whenever the LNG plant is far away from the Snam network interesting economics. In order to achieve interesting economics liquefaction becomes a mandatory step. And here, we are currently analyzing the reference market for LNG. And we plan at least 5 biomethane liquefaction plants. According to our analysis, some of our plants could already be upgraded to liquefaction plants. And considering that this bio-LNG will be dispatched through this Snam work though there is an additional market out there. Even though this market according to the truck makers in the automotive, such market seems to be moving towards hydrogen more so -- more hydrogen rather than LNG. As for hydrogen, our plan provides for coupling between our waste-to-energy plants, where 45% of the electric energy produced is green certified and then the electrolyzers. So we started with the project of the hydrogen valley in Brescia. Thanks to an agreement between A2A, Ferrovie and Snam to fuel the trains that were financed by the ministry on sustainable mobility, namely 13 trains. The production of green will be made with electrolyzer that is located within the WTE plant in Brescia. This would enable to use a very low factor compared with the electrolyzer linked to Windows solar plants where the factor is lower because the working hours are much more limited, whereas the WTE plant is constantly operating, which optimizes the CapEx on the electrolyzer by kilowatt hour produced. And another important point, we are able to provide electric power to the electrolyzer and not just green power, but also without paying the network cost. So we can produce the green hydrogen at the lowest price available on the market. Currently, we consider as the only market the heavy mobility, namely trains and trucks and buses. That is the industrial sector that is definitely readier to move to hydrogen our plan provides for EUR 200 million cumulative CapEx in the planned time frame with EUR 32 million EBITDA by 2030. And then we have additional upside, for instance, steel mills. The ecosystem around the Hydrogen Valley in Brescia and BalcaMonica is already starting considering whether exploiting the funds that will be allocated by the recovery fund and specific subsidies to hydrogen, whether they can have access to hydrogen. And these are all additional upsides for us. So our plan is absolutely a credible plan, a reliable plan and feasible plan. And it's the best way for a company like A2A to enter the hydrogen sector. Also in the area of R&D, where currently it's difficult to achieve a robust economics and carry out experience at the same time. So we believe that WTE plants, electrolyzers and mobility altogether can provide very good opportunities for us. And let's not forget about district heating and water cycle. We've gone with the carbonization of our district heating system in some areas like Bergamo and Brescia, we have already reached the 72% target of heat produced with renewables and heat byproducts, therefore, not fossil fuels. As far as Milan and we still have to improve. Our goal is reaching 70% by 2030. So using only 30% of gas fossil fuel to generate hot water that is used for district heating. As for water cycle, our target is that, of course, of reduced water leakages, we have implemented Aquarius technology very successfully. This is a technology that was developed in Israel. These are probes that make it possible to identify water leakages very efficiently with sound waves in the pipes. So we retain our target, and we would like to go beyond our geographical area of reference, at least with the downstream part of the business. That is to say the water treatment plants in particular. 2022 we see the starting operations of a new water treatment plants, one in Brescia, in Val Trompia highly industrialized and densely populated area. So we confirm our commitment to water. And despite all the political problems that the ease still existing in this area, we do expect that we'll be able to extend our geographical footprint. As for energy transition, here again, we have revised -- revisited our targets. We have added EUR 1 billion CapEx, and Andrea will go back to it later on. We have -- we plan to increase our EBITDA by the end of the plan to EUR 1.7 billion. And you can see that we have set a higher target. Last year, we had 6,000 charging points. We have increased it by a factor of 4 to 24,000. And this is because, again, we have a much clearer strategy that I'm going to illustrate in a minute. Clearly, the acquisition of 3 new and 4 new that was completed will enable us to reach the target sector for 2024, well ahead of time. I'm sure there will be questions on it. 3 new and 4 new were acquired ahead of time, considering the stage of negotiations with Ardian because the fund shareholders of 3 new and 4 new were different among them and different than the counterparties that Ardian is expecting to invest with. So let's say that considering that there were different investors, the through transactions of the 2 deals could not be dealt with together. So we completed the due diligence we decided to acquire the 2 funds. As we announced to the market, these 2 acquisitions do not depend on the negotiations and the transaction with Ardian. As you know, we -- in December, we extended the deadline too much to complete the negotiations with Ardian. We're still working on it, of course, on this deal. If you remember, mid-December, we reached the record price of gas and the energy scenario suggested it was much more advisable to take a bit more time and wait for more clarity. The recent decree adopted by the Italian government as I already announced last week, was something that we had to consider closely. So all these elements did not have an impact on the 3 new and 4 new acquisitions, but the elements suggested to wait a little bit longer to carry out a bit more complex transaction with the Ardian fund. Anyway, A2A has the ability, the stand-alone ability to make the acquisition of 3 new and 4 new, which I believe is clearly suggestive of our ability to grow in this area. CapEx grew to EUR 18 billion, but this CapEx has to be spread to all the areas that we operate in, energy waste and so on. But nevertheless, we retained our final target of 5.9 versus 5.7 of the previous plan. The overall investment that we can allocate to investment is roughly EUR 4 billion. We have increased it to EUR 4.5 billion versus EUR 4.1 billion that was the target in the previous plan. This is a substantial investment. And I believe that A2A has proved able to make such investment and stick to the target. As you can see on this slide, this would lead to more production of green energy. We estimated roughly 5-kilowatt hour terawatt hour green energy more, thanks to the new plants that were acquired -- and the final target of 12 terawatt hour of green energy produced at 2030 is retained and confirmed. Briefly about the pipeline 2.5 giga, 60% of solar and 40% wind, 3% is at a very last stage. 39% is middle stage, and we are absolutely confident about this, and 58% is at an early stage. So this is our mix. We're still working on our pipeline, of course. Within the time horizon, we plan to generate 300 megawatts of renewables, new renewables per year, and this pipeline will enable us to achieve these targets. As for the flexibility, 1.7 giga and new flexibility for upgrades, I mean upgrades -- as for renewables-- we are developing a number of pilot projects. By 2030, we expect that the green part of the column namely e-storage is the one that is growing most together with our CCGT plant. Electrification inevitably implies working on our electric grid. The evolution of the RAB electricity network to 1.8 by 2030 is essential. And this will require 16 primary cabins, 1,500 secondary cabins. In 2022, we are going to make 2 new primary cabins operative in Milan. Milan is lagging behind and it needs at least 10 primary cabinet to develop electric mobility and decarbonization. We have signed the [indiscernible] of the Milan a municipality for the gas network 12-year contract. As far as gas is concerned, you can see on the right side, most of investment goes to maintenance. As for electricity, most of the investment goes to development. As for electric mobility, I would like to highlight an important point in my view. We decided not to invest on the quick charging stations, 11-kilowatt and 22-kilowatt charging stations. Because the economic performance of such charging stations are not really clear because when there is a lot of demand, the fast charging points would be required, whereas where there's a little use of these charging stations or slow charging points are more than enough because they are generally used overnight. This is why we have increased our target substantially from 6,000 to 24,000, consider that in 2030, in Italy, it is expected to be not less than 120,000 charging points. This means that we'll be #3 in Italy after ENI and . As You might know, we have set up a new company. So we have decoupled the charging points. So we have decoupled the charging points operator from the mobility services provider. The mobility service provider is under the market business unit, whereas the charging point operator falls under the network business unit. And the -- we have signed an agreement for interoperability with EnelX. Considering that carmakers are all moving towards low voltage electric cars, the slow charging points. So they require limited CapEx and 3 kilowatt and 7-kilowatt charging stations that can be used overnight. And I mean the car can be connected for the whole night. And then the development of fast and ultrafast changing stations that are very interesting economics will account for our policy going forward. And you can see the figures in terms of EBITDA, EUR 80 million by 2030 -- our business plan factors in the reduction of EBITDA in '22 and '23, considering the initial targets that we set ourselves. So compared with the previous plan, we can see slow reduction of the final result, 6 million clients originally now 5.4 million, but we confirmed our EBITDA. Actually, it is slightly higher also following the recapitalization of the cost of acquire and Andrea will provide you with more details about this. And we have reached 1.5 million, roughly 25% and the number of clients with contractualized added value services. And this figure is growing substantially, and I'm referring to complex products like board box or heat pumps and even simpler services. And then I'll be very quick as far as social and governance is concerned. Well, we have 1,300 new entries, 1,000 have left the group. We continued our trading activities in a very meaningful manner for all of our employees. And when it comes to diversity and inclusion, we have increased once again our goals. We are included in Bloomberg LP General Quality Index. This makes us very proud. And we continue to set for us goals that we believe are possible to be achieved in terms of the gender balance. The same applies to the big work that we are doing on the supply chain to align our suppliers ESG indicators, and we are increasingly including a sustainability criteria within our own than the rating process. Now a couple of words on innovation then I will give the floor to Andrea for economic and financial results. We're doing quite a lot of work with the start-ups in the field of innovation. We met 643 startups. We also have registered a patent. We have 7 startups invested in our corporate venture capital. We are among the largest projects of corporate venture capital. And then we have also had 3,000 employees that have put forward ideas, and we are building prototypes, which are very, very different in nature and which relate to our activities or you can this carry out by our employees. Andrea, you have the floor for the financials.

Thank you very much, Renato and good morning to you all, ladies and gentlemen. Let me make a preliminary comment about 2021. You've seen the figures and the numbers, which are the best forecast that we can have. Now 2021 was an exceptional year. It is, therefore, natural for us to think that this very much based on the energy scenario and therefore, to a new generation. But then when we show the financials, we will give you all of the details of business units performed all better than what we communicated at the beginning of the year and were better than we expected. In terms of capital, we had a very good year, but that is aligned EBITDA is better and with the hedging indices, which are very sound. Now despite the good performance and increase in 2021, the plan shows a growth going forward, which is very good with a compounded growth rate of 8.3%. And once again, this is not a back-ended plan, in the first 5 years, the growth is going to amount to 8%. I will now go through the numbers and will give you a few details on the individual business units, so that you will have great visibility. And I will focus a bit more on the first years of the plan 2022, 2023, imagining that much of your interest certainly is about the plan in general, but about the first 2 Years, especially, now as to 2022, a comment. In general, the year has to be looked as a whole and within its complexity, including that about the revision of water on electric networks, we factored in the numbers that you should see in the end, the estimate of the effects of the decree for an amount of EUR 35 million, EUR 40 million. As to investments as to CapEx, Renato went through that exhaustive, EUR 18 billion. as you can see. And the number includes both the industrial and the M&A part. But then if you want the details, we can give you the details for each individual units. The taxonomy underweight of the investments hasn't changed at 70% and 90% taxonomy aligned and SDG aligned, respectively. As to the energy business unit I shall focus on the first 2 years with greater details. The growth is going to be strong, more than 30%. There are positive elements, which are very visible. Let me say this, you know well, that we should have the effects of the tenders for capacity market for '22, '23, EUR 120 million of margin increase. We Have a positive scenario, all price effect on hydroelectric, whereas we have no major changes on the thermal production because the spread hasn't changed much. We have a normalization of the [indiscernible] services. It is a bit higher than the forecast. So we had increased years, but it is lower than 2021, which in terms of ancillary services. There was an extraordinary year. And then we have the contribution of renewables, which is certain because it comes from the acquisition of M&A may be 3 plus and 4 plus and Octopus that will account for 12 months in '22 versus last year. Negative effects, we only have the normalization of hydroelectric volumes in the first quarter of '20 -- in the first part of '21, we had a strong factor 3.4% in our production, we usually have our forecast on 10 years. Our forecast is 4.2%. Now these effects put together, it's a volume effect and is an effect on subsidized production in Friuli and all our feeding that we had in 2021 because of turbines went beyond certain limits. I'd like to pick up a couple of seconds to tell you something about an effect that is not going to have an impact on consolidated numbers, but we have an effect on numbers that you see in 2022, when we see when we take a look at the market business unit and I'm referring to development related to the biannual contracts. This is a technicality, but I think it has a strong impact. And so I mentioned it right now. We sell 90% of our mass market contracts fixed price contracts. And therefore, the revenues of the selling company is constant in the period of 2 years, the margin is defined as spread based on the procurement price, which is concern, the procurement price is the average of price of the PON of the 2 years. Selling price is fixed, margin fixed, the cost of procurement, which is the average of the 2 years will determine the fact that in the first year, we'll have a loss and the second year, there will be a complete total recovery of the loss of the first year. Now the numbers are relevant. And in 2022 for the market business unit, we expect some 45 million of negative effect, which, as I said, will be completely reabsorbed or made up for in 2023 and then there will be a tailwind in 2024. This effect is not there in the consolidated numbers the market business unit is making the procurements from the generations unit and we'll give you the details later on, but I wanted to talk about this effect before we get into other numbers. The business unit energy. Well, the story develops in further years based on 2 fundamental drivers. And here, we can give you a few details starting in 2024, we will have the overcoming of the enhanced protection market has been postponed. Now we know that it will occur on the 1st of January 2024. We have reviewed our assumptions. I can get into the details later on. And then we have the story of the development of renewables, which Renato mentioned before, which has no impact in the first 2 years, but we have an important impact in the next few years. As to the waste business unit, the growth rate here is 11% of the EBITDA versus 10% of last year. The current plan compares the [indiscernible] in terms of material recovery, an increase in terms of energy recovery from 5 terawatt hour to 6.8 terawatt hours. The drivers are here, the plan on biomethane that we saw before, which is expected to generate EUR 85 million of EBITDA, EUR 640 million of CapEx. We have then an increase of 0.2 terawatt hours. Thanks to the development of a new WTE in Piedmont, which was not envisaged there last year, and we put forward and presented the request for authorization and there are assumptions of adjustments for other clients. Now to give you a breakdown that we usually use to take into account the fact that this growth is mainly due to development of plants, which as we said very, very times that it's a kind of development that requires the necessary authorizations and authorizations take some time if we want to break down the EUR 120 million of margin from point of view of plants. The plant shows 27% of EUR 520 million of EBITDA that come from already authorized plants, we are building or we shall proceed with the building of these plans 21% of this EUR 520 million are related to plants where the authorization request has already been submitted, but which has not been received yet. And 21% times from plants, which we haven't yet submitted the authorization request and then the residual percentages the acquisitions plants. Well, the 2 years is very visible. The growth is 4%, as you may see. And this comes from the starting operations of 2 plants for the treatment on the organic fraction, solid urban waste, which have already been authorized like [indiscernible], they will lead to EUR 11 million of EBITDA and then the starting of operations in 2023 of the new WTE of Parona, this is a plant, which we have been talking about for years. And finally, in 2023, we should have the beginning of production. We apologize this. Now let's move onto the business unit Smart Infrastructures. We changed the name of the business unit we now call it Smart Infrastructures. The activities of the business unit haven't actually changed much plan of networks has been confirmed or slightly improved. The major novelties or the major industrial ties here are the review of e-mobility, especially. And then EUR 300 million out of EUR 560 million of cumulated CapEx that depend on this line of development. Another big change that we have in the numbers, which has a greater impact in the second part of the plan are the assumptions for the development of Cassano, the conversion of Cassano also for the production of heat, which will be then used in the district heating network of Milan. Here, we acknowledge the effect that the capital contribution that we envisaged initially. I cannot or will not come from the PNRR plan. We do not see a lot of fun there. But apart from the lack of capital from the plan. We think it will be easier to obtain white certificates. And the scenario of white certificates is more favorable, but there is kind of a change to take into account between CapEx and EBITDA numbers for '21, '22, you have to expect an EBITDA, which is going to be flat However, remember that electricity and gas network have been impacted by the review of regulated returns and impact of around EUR 20 million a year. And as you know, we have disposed off a small part of gas item, which we have dealt quite well. So we have some EUR 30 million networks starting point versus 2021, EUR 30 million, which are going to be recovered through cost efficiency gains and the increase of RAB. Here you see a snapshot, a picture which I just will leave it there. I'll move on to the financial part of the presentation. We have a target, which is of 80% in 2030 of gross debt, which is represented by ESG instruments, an increase by 10%. Last year, it was 70%. And we move from 2021, which even from the point of view of sustainable finance has been a very strong year as a natural effect was done by A2A in the World Finance in 2021, including the small operation of buyback was done with sustainable finance instruments green bond sustainable bonds and the small bank debt that we have drawn is ESG linked. Now the plan, like the one last year was built from a fundamental condition that was to maintain the rating given by both agencies at the same parent level, the level which is 2 notches above that of the Republic and which confirms the performance of A2A in managing its capital structure. We have envisaged the CapEx that we mentioned. You'll see while the dividend policy and everything is compatible with our goal of maintaining the hedging indices. -- which are a precondition to be able to maintain our rating. Out of EUR 21 billion of debt 70% is debt generated by A2A itself duration of cash flow. And then we have EUR 4 billion of incremental debt and then EUR 2 billion related to asset rotation activities. These are activities which are very similar to the ones that we made in the past. And the possibility to make some investments as similar to those we made with Ardian in partnership with third parties. That debt is going to be refinanced at cost of 1.7%, which shows that the cost of debt is going down based on the current scenario. This 1.7% is estimated based on forward curves, which envisage an increase in interest rates. So at this point, I leave the conclusion to Renato, and then we shall have the Q&A.

[Interpreted] Well, my conclusions will be very quick. As you heard, we have strengthened our guidance even further. I would like to remind you that in the previous plan that 2022 was below EUR 1.4 billion, EUR 1.380 billion, without the decree providing subsidies. And there was no impact on WACC. So despite the EUR 13 million in terms of WACC and loss of EBITDA and EUR 35 million that we estimated for the credit history. So altogether, EUR 65 million impact. For 2022, we -- our guidance is EUR 1.4 billion, EUR 1.45 billion, so growing, which confirms that we are already growing and then a target of EUR 1.6 billion in 2023. And then you see what to expect in terms of net income, constant growth of 3% of our dividend per share, with a growth of net income and of our economics, that is definitely higher than this 3%. So I can conclude repeating what I said at the beginning of the presentation. Our takeaway message is the following: we are 1 of the national leaders in decarbonization. Probably this is the most meaningful snapshot. 5-terawatt in 2021, 13 terawatt hour by 2030, and you see the good balance between the solar, wind, bioenergy and hydroelectric in terms of energy production. And this is something that is unprecedented and unique in Italy. So we can confirm the substantial growth of our investment, EUR 18 billion, net of EUR 1.7 billion already done, which means that between 2022 and 2030, we will have to make a EUR 16.3 billion investment with a return on investment. This is definitely very, very interesting. So I think we can say we are confident, and we are definitely very satisfied with what we have done so far, and we are waiting for a very, very good 2022. We can now start the Q&A session for the financial analysts. I would like to ask the operator to send the first question.

This is the Chorus Call operator. We're going to start the Q&A session now. [Operator Instructions] First question by Enrico Bartoli.

[Interpreted] Good morning, and thank you very much for your presentation. I've got a number of questions. And I would like to start with renewables. You completed these 2 major acquisitions in the past year. And you have a growth target by 2026 to reach 3.7 gigawatts. I would like to know from you what is the trajectory you're going to follow to reach this target and whether you plan to go on scouting opportunities on the market for further M&As? Or are you going to focus mainly on developing the pipeline that you already described? And then I would like to have more color about the transactions made, particularly Volta Energy pipeline. Can you give us an idea of the value of the acquisition? And for the Ardian assets that you recently acquired, can you please tell us about the debt associated EBITDA and the percentage of assets that will benefit of -- from incentives? And then I've got a question, another question. You pointed out that waste is going to be a major driver of your business plan up to 2026 and 2030. You already mentioned that you are asking for permits for new plants in different areas in Italy. Can you provide us with more details about the geographical areas that you are targeting? And what type of implants in terms of technology? What type of implants are you going to develop? And then 240 additional EBITDA in this area by 2026, what is the visibility? And then a question on Business Energy. First of all, your estimates of PUN. You expect PUN to remain around EUR 78 per megawatt hours, sorry, by 2026 and '30. Can you tell us a bit more about your view on energy markets. I believe you expect energy markets to remain strong, though not at the current levels? And can you upgrade (sic) [ update ] us about hedging in terms of price volume for water in '22 and '23? And are you taking into consideration the impact of the decree that was recently approved by the Italian government in terms of pricing?

[Interpreted] So -- we can answer your questions both of us. So I'll answer the question about the pipeline. First, of all, 3.7 -- to be precise, 3.9 is our target for 2030. Of this 3.9 giga, we have already developed 170 this year with Octopus, and we have just a remaining 40 megawatts to activate. And I can tell you that they will be bidding for the -- [ go for ] bid for new capacity. So this is an upside versus the deal that we concluded and 350 megawatts are coming from 3 new and 4 new. The target that we set ourselves in terms of future development implies roughly 20% of M&As and 80% of greenfield projects. So our pipeline is, therefore, extremely important, and that's why we acquired the Volta Green Energy that was a EUR 23 million worth investment with an overall pipeline of 840-megawatt. This is 1 of the most brilliant, let's say, development companies so that we managed to find in Italy. So let's say that looking forward, we are going to follow this linear trajectory. We started with M&As, of course, and we definitely are considering all opportunities arising on the market, even though currently portfolios of the size of Octopus or Ardian are not available in the market for the time being, in terms of size I mean. So that's why we're going to focus on the development of greenfield plants. As for our Ardian assets, overall value, EUR 626 million, with an equity value of EUR 452 million and roughly EUR 140 million debt. The rest is loan (sic) [ lock ] box, EUR 27 million, but let's say that these are the figures, EUR 452 million, EUR 140 and EUR 27 million are lock box. 91% of Ardian's pipeline receives incentives through the green certificates. So it has suffered no impact whatsoever from the energy decree. Please consider that our target for 2030, namely reaching 2.8 giga, considering that we are 400 megawatts ahead of time versus the previous plan, and we try and retain this advantage. So we expect to add 200 additional megawatts. But of course, considering that we have accelerated so much, let's see what happens, maybe even more than that. As for our waste business. Well, the 2 areas that are currently most interesting for us are Sicily, a very interesting debate has started in Sicily about the need for waste-to-energy plants, especially in the western and the eastern part of the region, 2 large waste-to-energy plants for 450,000 tonnes. We actually contributed to a well-advanced project in the Catania area. We contributed with a company that is operative in Sicily that belongs to the Alfa Accai Group, that in a site near its industrial site had developed the area to develop a plant. So actually, we joined an expression of interest with a project finance proposal put forward by us and Alfa Accai -- and Acciaierie di Sicilia, to be precise, and [ Thermo ] Chemical. We are very confident, I must say, because apparently, Sicily has decided to move towards this direction. Another very interesting geographical area is the center of Italy. The Mayor of Rome is reconsidering the topic. So there, there is a special waste plant in [ Taprenia ], a large plant, considering that we're talking about special waste, would solve the problem that the Lazio region plan did not provide for such plants for solid urban waste, considering that the biological and chemical and mechanical biological platforms -- treatment platforms in Lazio. So the waste that are first treated on these platforms and then treated in the waste-to-energy plants are classified as special waste. In the same area, between Lazio and Umbria, Gualdo Tadino, there is another project for another waste to energy plant. There, there was a company that had already asked for the permits. And so definitely, we're talking about the waste-to-energy plants in this area, and we are also developing the plants for the use of organic fraction from solid waste, 1 in La Carel and 1 in [ Kabaya ] in the Piedmont region. So we are developing these projects as well. So the two main technologies that we are investing on currently are waste-to-energy plants, biomethane production plants from the organic fraction of the solid urban waste. Would you like to provide more details, Andrea?

[Interpreted] Well, the growth of our waste business, well in terms of visibility, between 2022 and 2023, we can say we have a lot of visibility here. EUR 23 million in 2023. That is the Parona plant becoming operational and EUR 11 million that is at 2 other plants already authorized that will become operative again, and they are being developed. And then we have the contribution of the acquisition of [ Tegnoal ] slightly less than EUR 10 million. And then we have also negative impact, for instance, on HESM [ Agama ] has lost its concession for the waste collection in Varese. As for 2023, let's say between 2023 and '26, I believe your question asked about this period, if I understood you correctly. So here, we have 30% of the growth, roughly EUR [ 15 ] million will come from the plants that are being developed that will become operative in this period. So these are plants that have already been authorized. Then the Parona plant that will become fully operative. Then the Corteolona plant, another plant for the treatment of the fumes of the TWE plant in Brescia. So let's say 30% is fully visible. Then the remaining 33%, this is something that we had already assumed last year. We plan to acquire a TWE plant abroad with a partnership, roughly EUR 60 million impact and then 10% will come from the development of bioenergy, both in terms of M&A and development of greenfield plants. So we're talking about small-sized plants. And then we have 10% related to other plants for the treatment of the manufacturing from solid urban waste, and we are currently pending authorization. And then we have another set of minor plants, 2, 5 million each, for paper, wood and land and soil treatment. We are still considering developing them, but stand-alone and they have a very limited impact. So overall, we can say 50% between '23 and '26, 50% of the plants have already been authorized, are being developed or we are already at an advanced stage for the permits. And then we have EUR 60 million for the waste-to-energy plant abroad. And currently, we haven't identified a target as yet. So this part is less visible, if I may say so. And then you asked a question on the PUN. What we expect for the PUN. So we have slightly better expectations than the previous plan, definitely much lower than the current scenarios. Clearly, we have to rely on the expectations of gas price evolution and the CO2 emission certificate price evolution as well. Considering also macroeconomic variables, geopolitical variables, we consider all of them besides our models. We also rely on other sources to have, let's say, forecasts about energy prices, forecasts though we may consider reliable, of course, and then we make our own forecasts. We believe our expectations are credible, are reliable. We expect gas price not to remain at the same levels it has reached today. We expect it to go down to lower but more reasonable levels that can support future projects, and we expect that the CO2 price will remain a major driver of the cost of energy and the gas plants and CCGT plants that in Italy close the pricing 60% of the hours during the year. So let's say, over the next decade, we believe that the price will be set mainly by CCGT plants. So if we expect the price gas to be more or less a level of CO2 prices, then energy price forecasts we made are credible. As for hedging, we have roughly 75% hedging in 2022. I'm talking about the fixed price which, in our case, means not just the thermal electric production 4.2 terawatt that I referred to, but also the terawatt hours that are produced by WTE. So all in all, 5.2 terawatt hours. So 75% is hedged at EUR 65. And in 2023, we have a 27% hedged at EUR 100. And a question that you may ask later on, there's what we have estimated in our, in the restored decree is EUR 61. Actually, this EUR 61 was calculated based on our estimates, then we added some hedging. So we have added other hedging. And we -- you can reconcile the EUR 61 and EUR 65. So 75% of our production of 5.2 terawatt is hedged at EUR 65, just to be brief. In the restored decree, we have a 3 terawatt because the remaining part is the January production that falls under the restore decree and part are the plants that receive the feed-in tariffs that are excluded, mainly the plants in Friuli and Segula. We anticipate [ it stays where ] 2.6, so at an average price of EUR 61. As Andrea said, that's why we see an impact only for 400 giga roughly. And the difference between our unitary price and debt price leads us to EUR 33 million. And then we have a smaller amount coming from solar. And here, there's still a bit uncertainty. If the plant is at market parity or not, the photovoltaic ones are not subsidized because we had 2 different versions of this decree. Anyway, the Octopus plants have a substantial part of the production at EUR 52 per megawatt, and so they're not included. They're not factored in, in our calculations. That's why the impact that we calculated is based on this type of reasoning -- well, the assumption about the credit history is that there would be nothing for 2023. So this one-off amount will have an impact only on 2022. Thank you very much.

Just the clarification about the renewables that you acquired from Ardian. What about the EBITDA and the residual life? Sorry, I know I asked so many questions.

Well, EBITDA, EUR 52 million full year, and we consolidate EUR 40 million this year starting from April. Residual life of incentives, well incentives will expire on average in 2026. Thank you very much.

The next question is by Sara Piccinini with Mediobanca.

Good morning to you all, and thank you very much for the presentation. My first question is about the midterm targets. Could you please tell us what are the main drivers behind the growth, especially in 2022 and 2023? And then the growth in 2022 and 2023 in terms of EBITDA looks higher than the net -- than the growth of net income. Why is that? Are there factors that we need to take into account that offset the growth of EBITDA which then translates on the growth of net income? Second question, to follow up what Enrico said about the decree. Could you please give us an indication of the hedging level of waste to energy in 2022 and 2023? And then you said that when it comes to 2023, you do not expect an impact, which is okay. So that's it. Thank you very much.

[Interpreted] Well, I will start answering the second part of the first question. Well, the waste-to-energy plants are outside the restore decree.

I ask the question only because I wanted to assess possible impact. Should the exposure of this part of production also be included? Thank you.

[ Can you finish your ] response.

[Interpreted] Well, it is difficult to answer this question, Sara. Because when it comes to the restore decree, it doesn't include W to Es. And -- so we do not have elements for us to assess the related impact. Let me tell you something straightaway. The waste business unit, that sells to the generation business unit all of the production at the beginning of the year. If we look at things at the level of the individual business unit, which is a company as A2A S.p.A., well, the production of WTEs is completely covered the riskless trading. Now at what level is it applicable? Is it not applicable? Well, at that moment, it is very difficult to answer your question. I don't want to disappoint you, but I -- we do not have the reference figures to estimate the impact. Now as to the why the growth of EBITDA that is not reflected in the growth of net income in the same manner? Well, there are 2 items of the P&L that need to be taken into account. First of all, the growth of D&As, which are related to the investments that we made in 2021, which are now being factored in. These D&As are related to an implant for a given number of months. All those plants which do not have the EBITDA fully up and running. While this is typical when you have strong ways of investments, you have a given number of years where D&As are more relevant than the growth of EBITDA. And let me tell you the return on capital tends to shrink and tend to go down. Then when the investments have reached the steady state, you have the recovery in terms of net income. Secondly, we have an increase percentage-wise of the D&As which is greater than the growth of EBITDA. I think it is also appropriate to take into consideration that the growth of EBITDA is penalized in 2022 because of the effect of the review of regulated returns, which is around EUR 20 million. And by the restore decree some EUR 35 million to EUR 40 million. So we're speaking of EUR 60 million of EBITDA at 0 CapEx or at 0 D&As. So EUR 60 million that we could, so to speak, discharge directly on the net profit following the tax effect. So between the restoring decree and what we have lost, EUR 40 million of net profit plus the effect of further D&As. And a third element is that we are envisaging some EUR 20 million more of provisions for credit risks versus 2021. Now first of all, because at the end, we tend to have release of funds that can only be made at the end when you have definitive data about the delinquency of credits or the causes that lead to provisions to the credit risk fund. And then through the application of IFRS 9, the increase of revenues is related to a percentage of provisions. So when the revenues goes up, the provisions go up. This effect of the accounting principle, it is a volume effect. It is not a worsening of the quality of our portfolio. Now if you wish, at the end of the presentation we can get into the details on the principles of the provisions to the credit risk fund. Now as to the drivers or your question about drivers, on the 1 hand, we have in 2022, an increase related to the capacity market, an increase of EBITDA. And the EBITDA of renewables is also increasing because we consider new investments for the full year. As to waste, we have a number of plants starting operations. For instance, at Parona, [ Laquierela ] and then the organic production of Laquierela and [ de Tavaliatum ]. And then we have, starting in 2022, the first EUR 10 million coming from techno and -- which are related also to growth prospects. So we have some EUR 35 million of EBITDA coming from the waste, and then the remaining coming from generation.

[Interpreted] Well, thank you. Thank you very much. If I can ask very quickly another question. Can you give us an indication or a sensitivity about the change of EBITDA in terms of an increase of EUR 10 for a megawatt hour?

[Interpreted] Yes, certainly let me wait so that we can find the answer. [Operator Instructions]

And the next question by Stefano Gamberini with Equita.

[Interpreted] I've got a number of questions, too. The first is the following: Can you tell me more about the [ Techno A ] EUR 10 million EBITDA to EUR 180 million on the price, if I understood you correctly. And then I read in the press release that the target was EUR 40 million. Can you please tell us more about the return on this investment. Second question, going back to the transaction with Ardian. Probably I didn't hear about that. But what is the wind capacity and the solar capacity that were acquired? And what is the return you expect on this investment? And then -- what about the Ardian deal? There's no risk of dilution here of your net income if you join -- if you contribute your water plants to the joint venture. And did you factor this impact in considering that this transaction is going to be executed by March next. Has this been factored in, in the plan? And then final question, 1 about debt. In the annex is the last page of the annexus. I saw EUR 2.9 billion in 2021. We are currently EUR 4.1 billion and EUR 4.3 billion. And I can reconcile this with the EUR 1.7 billion acquisitions and investment for this year and a similar figure for next year too. So what is missing here that I didn't grasp? If there were the [ colfor bids ] at the end of '23 for the thermoelectric plants in Lombardy, what would the impact be? What kind of cash in would you expect to reach the target that you set in your plan? Anyway, congratulations on your plan. I do apologize for my numerous questions.

[Interpreted] So Mr. Gamberini, as far as Techno A is concerned, that was the opportunity we grasped because of that plant processes 80,000 tonnes and has already received the authorization to reach 245,000 tonnes. So clearly, we've factored in this element in the value, namely the acquisition of this plant with these forthcoming authorizations. We planned additional EUR 70 million CapEx, EBITDA for expected EBITDA EUR 40 million. So we have a plant that is the only one in the center in the south of Italy able to treat special waste. We have [ a benfilago ] plant in Bergamo which is similar from a certain point of view. So we can achieve a greater efficiency also for this. So we're talking about EUR 350 million overall investment, generating EUR 40 million EBITDA per year. But has a lot of future growth prospects and EBITDA full year 2022 EUR 15 million. But again, the implementation of the new plant requires also a downturn of the plant. So it requires a stop of the plant, which will make possible an upgrade of the plant at the same time. But this is definitely a very good opportunity for us. So with this deal, A2A becomes the first player in waste cement in Italy, especially in an area that is the South of Italy. I mean Techno A also treats pharmaceutical waste from [ Malazio ],and this is another new market that is very interesting. As for the Ardian, please consider it's almost all wind, 430 megawatts of wind, 19 photovoltaic in Italy. And in Spain, we have 30 megawatts of wind and 10 of photovoltaic. So the acquisition of these 2 portfolios had as a main goal to develop more the wind part of our renewable business. We didn't factor in our plan anything more as far as Ardian is concerned. So this is the stand-alone plan of A2A that was factored in; namely, the acquisition of these 2 portfolios financed with our own resources, which would enable us to retain the rating that Andrea mentioned. And considering that this is what we're going to do, no dilution of dividends is expected as far as the Ardian transaction is concerned. It goes without saying that to prevent dilution of dividends, it is essential that the proceeds of the Ardian deal are immediately invested or progressively invested in activities that generate more EBITDA. So this means that we are not going to convert our debt with the equity coming from Ardian to prevent dilution, of course. So this plan is a standalone plan and all the economics that we mentioned, dividends included, are not diluted, have no impact whatsoever. And the Ardian deal can only improve this plan from an industrial and from the economics point of view. As for the return on investment for the Techno A, 7x EBITDA. So this is the multiple we're talking about here. And I answered the question about the debt. Actually, you already answered all the questions. But anyway, probably I wasn't clear enough when during the presentation, I mentioned financing. The plan factors in for 2022, the issuance of a hybrid bond for EUR 600 million, considering that a hybrid bond is accounted for as equity, so it is netted from the debt. So if you calculate the cash flows, there will be additional EUR 600 million, then you subtract the EUR 600 million and net financial position. So 3x is the result of the assumption of financing, EUR 600 million of cash flow with the issuance of a hybrid instrument.

[Interpreted] And then did you find the answer that Sara asked?

Honestly, I forgot about it. What was Sara's question that was still pending and I was supposed to answer? Oh, the question about sensitivity. Yes, I found the information: for EUR 10 of unit reprice, it's roughly EUR [ 90 100 ] million.

And if I may ask a follow-up question about the cost of this hybrid bond? If I understood you correctly, I have to add EUR 600 million to the EUR 4.3 billion debt. Is that correct?

[Interpreted] Yes, this is exactly correct. This is exactly what you have to do. Then this EUR 600 million will account for 50% equity and 50% debt for the A -- rating agencies, I mean.

Stefano, if I may add. If your question implied trying and model the financial charges as well, well financial charges on hybrid bonds do not go through or not factored in, in the P&L. It's, again, an instrument that is classified under equity. Anyway, we haven't issued it yet. It will probably be around 2%, definitely more than the senior debt. But again, it's a debt instrument. It does generate financial charges, but not accounted for under financial charges item, whereas the financial charges on the hybrid bond are included in the cash flow.

Okay. Thank you very much. And can you comment on the hydroelectric business?

Well, as for the hydroelectric, we are going to proceed with project finance. Currently, the conclusion of the investigation of the European Commission on countries that decided not to call for bids, Italy included, has led to a number of measures put in place by Lombardy region, for instance. The Lombardy region is currently considering using project finance for the next tender with investments aiming at a better use of the existing plants, which is absolutely correct and fair. And the bidders will be operators or the bidders admitted will be operators. So we are waiting for these tenders to be announced to then start again with an investment in the area and strengthen our position here. But the plan is, let's say, in continuity with the past, yes. But it factors in an increase of the rates, considering that the concessions will be confirmed. So we are considering now [ K interest ] of rates and of the fees and then, of course, the investments on the plants. This has already been factored in, in the plan.

[Interpreted] The next question by Emanuele Oggioni with Kepler Cheuvreux.

[Interpreted] Good morning, and thank you very much for your presentation. I have a few questions which have not yet been addressed. Now first of all, a clarification about the capacity market and the [ amnesty of the old ] services market. The new scheme for the capacity amounted in my estimation, can lead to a contribution of EUR 165 million, which is partially replaced. We need to understand how much is the cannibalization of the old services market of the previous period. Now you were referring to EUR 130 million, and I wanted to understand whether it was so. And the usual EUR 160 million, EUR 170 million, EUR 180 million that you usually find in this market become EUR 130 million. But then what about this EUR 165 million, are they additional? Second question. It relates to the [ PNRR ], which is not included because of the low visibility of the national plan. So I'd like to have your estimate about a potential upside and additional EBITDA let's say, in a period, very low short period, certainly not 2022, or but 2023. Can there be a positive impact which is at the moment not factored in, in your plan? Do you have an idea of a possible impact? And then a third question, which is about the waste to energy, WTE. In Italy, it has always been difficult to build new plants. Could you please clarify what is included in the waste-to-energy plant? What is included in Italy, because we heard something about outside Italy as well, in other European countries? And what is the timing? And what are the costs, building timing. And then the return on the investment. Moreover, do you expect to be able to recover something on this? There is a [ spinning ] map of authorization times for waste-to-energy plants, given also the new Prime Minister. And then a question on the energy supply market. I'd like to have an idea of margins that you expect for customers [ or customer related ] margins in 2022, 2023 and 2024 because of the postponement of the enhanced protection market procedures. And then A2A, how can you benefit from the force the consolidation of the market, considering that a number of small players are suffering and are going to be or are ready to become bankrupt because of the problems that we know, prices, hedgings that they cannot do, advance money that they cannot pay, funding that they cannot receive from banks, and so on. Can this lead to a more rapid or further development of acquisitions of customers 1 way or the other? Thank you very much.

[Interpreted] Now let's take the first question on the capacity market, EUR 138 million in 2022. Yes, EUR 130 million, let's say, EUR 140 million. And on the MSD, the ancillary service market, EUR 140 million. As I said before, this is a normalized figure. And in subsequent years, this amount will remain more or less constant. In the plan, we have factored in certainly assumptions about the renewal of the tenders for the capacity market. Some of these tenders are going to be launched in a while. But we have envisaged the presence of the capacity market throughout the plan period, however with decreasing returns, EUR 140 million in 2022, the same number in 2023, similar number in 2024. And then progressively, in the expectation that tenders are continuing to be launched, but the capacity will be lower, the returns are going to be lower. We have a decrease going down below EUR 100 million in 2030. So if you put together the 2 effects, the numbers, they are almost constant to EUR 185 million in 2022, similar numbers in 2023 and then the numbers of the figures have progressively decreased. When it comes to MSD, ancillary service market or dispatch in service market, well, the numbers of the last 5 years, regardless of the underlying reason, well the numbers are not normal. Especially in 2021, the figures, the numbers were higher. Have I answered this question?

[Interpreted] Yes, very clear. Thank you.

[Interpreted] As to the number of WTEs that we have in our plan, please consider that we have in this moment filed a request for authorizations in different parts of Italy. For instance, from [ Cabalya ], where we have an integrated plan, which is very important there, down to Sicily. So we filed authorization requests or permit requests. And within the plan, we envisage the building of 1 big plants, for Italy, like the 1 I mentioned when I talked about Sicily, and then we shall see. I'm speaking about big plants. We have discussions ongoing; at the moment, we have filed a request for authorization for 1 big plant. We are very confident that we shall complete the -- or see the authorization of [ Cabalya ] to 150,000 tonnes. And we have also opened up talks for Lazio, where it is very clear that problems are to be solved, and the plant where we have the [ most ] advanced the process in terms of permits is our plant in Tarquinia. Between small and large plants within the plan, we have [ C ] plants, 1 [ in thas ] plant that [ ober techna ] already brought in, 2 plants abroad and 5 within Italy. So [ now they're ] all between big and small plants. It is certainly complex to have the possibility to build plants in Italy, but it is true that A2A is the only company building them. Suffice it to say that we are almost completing the works for the WTE plant in Parona. And we have advanced stage talks for the building of new plants, the plant of [ Corteolona ] or powering up of third line of the WTE of [ Corma ] for sludges and so on. So we are quite confident that we can proceed positively with all of this. As to the supply. Well, Emmanuel, the unit margin is I believe the only figure that we have never disclosed and so we shall continue. Why should we stop this tradition? Well, at least the trend, says the analyst, it's kind of an industry secret. Well, we have continued to assume in line with our tradition, again, a shrinking or a decrease by 3% for every single year. So 30% on an annual basis. On the energy component, that is, sales of gas or electricity are not revenues, which takes into account also taxes and duties and so on. When it comes to energy, which is the 1 which makes the margin for the reseller, there is 3% less year-by-year. Now I don't have the final figures for this year at the moment. But up to the 6 months, first 6 months of the year, if we take the portfolio overall, electricity, gas, mass market and clients, we didn't see the reduction of that size. We have to take a look at the definitely [ bear ] figures of the year, but the dynamics are such that there will be an erosion of the unit margin in years -- and this is the amount that we have factored in the plan. Was that the only question on supply, Emanuele? Or did you have something else?

[Interpreted] No, I was asking whether you are thinking of having a potential positive benefits because of the consolidation of the market because of the small players, which are suffering, and therefore the possibility to acquire some of them on the market.

[Interpreted] Well, 2 things are occurring and which are -- say 3 things. Now first of all, we are very lucky when it comes to the tenders that have been opened recently. We have 1 more tenders versus the packages that were tendered in 2021. And then the energy scenario, has affected the prices of the energy production market. So we are witnessing a greater shift towards the enhanced production market. And then as you said, there are many customers that are kind of confused because they are losing their reference points. They do not have an idea what to do. And we have also resellers or other entities that are trying to transfer their customers of finding solutions so as to be able to suffer less and have less damages. Yes, there is the scenario that you mentioned, and that is it.

[Operator Instructions] This is the Chorus Call conference operator. Because of time, there is no room for a follow-up. There is another question by Davide Candela with Intesa Sanpaolo.

[Interpreted] I've got 1 final question. What are your assumptions and what did you factor in your plan about extractions? Do you think this can have a greater impact on your CapEx and cost base? And in terms of CapEx, what is the flexibility you have factored in? And finally, a very short question about the supply chain, particularly about the development of renewables that you expect by 2023 and 2026. Are you experiencing some problems with the supply chain? And will this have an impact on your growth target?

[Interpreted] Well, currently, I must say that we have not experienced so far problems with our suppliers. So we are not witnessing delays in our construction sites because of the lack of raw materials or because of the problems with our suppliers. As for the flexibility of our CapEx, we have a lot of flexibility here because in 2022, for instance, we have planned EUR 2 billion CapEx overall, including industrial CapEx and M&A CapEx. Industrial CapEx account for EUR 1.3 billion and [ 70 ]% will be devoted to development. So should a project because of the inflation impact -- should a project go below our expectations, then it would be abandoned. But consider that we have such a rich pipeline, it won't be a problem for us to either abandon a project or replace it. Consider that starting 2019 up to date, our CapEx has increased by a factor of 3. And consider that most of the CapEx is devoted to development, we really have a lot of flexibility. And then about inflation, we have factored in our plan the official forecast, roughly 4%. So if your question was, do you have any specific forecast about inflation related to specific raw material. Well, so far we haven't seen any signal from our suppliers of this kind. So we didn't factor them in, in our plan. Thank you very much.

[Interpreted] So thank you very much. We're closing. Thank you for your time. Thank you for your attention. I would like to remind you that the Investor Relations team of A2A is available to you whatever further question or additional information you may need. Thank you very much, and see you next time. [Statements in English on this transcript were spoken by an interpreter present on the live call.]