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

Good afternoon, everyone, and welcome to the Capital Market Day of ENAV. Welcome to the people here in the room, to the press and to the ones connected to the webcast. I'm here today with our CEO, Pasqualino Monti; CFO, Luca Colman; and the Director of Strategy, Felice Catapano. On the agenda, we can see how the management will walk you through full year delivery and the planned numbers. After the presentation, we will have some closing remarks and a Q&A session. Please note that the Q&A session will be in Italian. So for those of you who need it, you have the translation device to help you out. Before I hand over to Mr. Monti, we have a short detail. Thank you. [Presentation]

Thank you. Thank you, Fabrizio, and welcome to everybody. I will start my presentation with an overview of the 2024 performance. Managerial actions and the execution of our strategy positioned the company on levels that were never achieved in the past. Starting with the operational delivery. 2024 was strong across the board. Let me walk you through some of the main highlights. Service unit recorded a double-digit increase for both en-route and terminal. Number of flights increased significantly versus previous year for both en-route and terminal with en-route flights over 2.2 million. On capacity, we reached 0.066 average minutes of delay per flight, better than the targeted level of 0.07. Our efforts on sustainability yielded visible results as well. We reduced our Scope 1, Scope 2 CO2 emissions by more than 87% against the 2019 baseline. And finally, we were very pleased with the inclusion of ENAV in the A list of the Carbon Disclosure Project. Let's move now to financials as 2024 was remarkable also from this point of view. We successfully delivered our guidance on financial targets, marking the highest result ever reached by the company in terms of revenues, EBITDA and net income. Revenues came in at EUR 1.037 billion and EBITDA at EUR 311 million, both in line with the guidance set last year. More in detail, let me highlight the performance of the nonregulated segment, which outperformed expectations for 2 years in a row. Indeed, nonregulated recorded EUR 15 million in revenues for 2024, up double digit versus 2023. The higher level of delivery sets the stage for future growth with -- which will benefit also from the significant backlog built for 2025 and beyond. Our financial position is extremely solid. Net debt at around EUR 260 million is down versus previous year by 20%, resulting in a net debt-to-EBITDA ratio below 1. Free cash flow reached almost EUR 200 million, up by 1.4x year-on-year. All of this resulted in visible value creation for our shareholders with total shareholders' return for 2024 at 27% and a material step-up of our dividend per share to EUR 0.27 per share that will be approved in the next Annual General Meeting in May 2025. The proven ability to execute and deliver is the foundation of ENAV's path going forward. Let's now deep dive into the strategic plan. The plan is built around a clear set of strategic pillars, a combination of traditional core values for ENAV and new ones. Altogether, they are aimed at creating a framework that will be -- that will enable the company to meet the targets and generate long-term sustainable value. Our strategic plan revolves around 3 main areas. The first one is the regulated market, which will remain the core business for us. In this segment, we will focus on 5 strategic initiatives, all aimed at improving performance and efficiency. Then we have the nonregulated market. We'll continue to accelerate on existing initiatives and start new businesses and markets. This is key to generate new stream of revenues, add value as well as recurring margins on top of the regulated business. Lastly, we will change our organization, which must evolve in order to support the proper deployment of the business strategy and enable further value creation. Let's now take a closer look to the regulated business, starting with the evolution of the context and regulatory changes. Over the past years, the context has been quite difficult to navigate and was impacted by volatility. 2023 went back on track with lower volatility and visible growth in traffic at the national level. 2024 continued on the same note and further extended this trend. Indeed, both flights and traffic in Italy recorded a double-digit increase versus 2019 levels. Looking ahead, traffic and number of flights are expected to grow at low single-digit CAGR over the next 5 years. The main highlight is obviously the new regulatory period, RP4, that will cover the 2025-2029 period. Luca will go into more details, but I wanted to stress a fundamental feature of RP4, the stability. In fact, the new regulation confirmed all of the relevant features of RP3 and did not introduce any new negative provision. In a supportive traffic environment, the stability and visibility offered by the new regulatory period are fundamental for our plan. Let's move to the details of the plan, we start with the regulated business. The priority of -- for the regulated market is to preserve operating excellence in our core business, confirming ENAV's technological leadership and excellence in service level. The new plan reaffirms the crucial role of the 5 legacy key initiatives and focuses efforts on execution. Over the next 5 years, we will achieve relevant progress on all these initiatives, reaching completion of almost all of them by 2029 or shortly afterwards. These initiatives will allow us to have a state-of-the-art technological infrastructure, therefore, enabling continued leadership in operational excellence. Their implementation will also unlock efficiencies and savings. Over the plan period, we expect cumulative savings of around EUR 21 million while at regime we expect savings of EUR 47 million per annum as we reach full implementation. The continuity we have on the core business is coupled with a further push on the nonregulated segment. Our ambition for the nonregulated market is to continue to improve our competitive positioning, opening up to new businesses and markets. Building on the progress achieved so far, execution of the strategy will double revenues by 2029. Worth to highlight that the value creation associated with some of the strategic initiatives is not included in planned numbers, leading to upside potential versus targets. The growth path will play out along 3 main routes: the evolution of current portfolio of products and services to keep up with the market needs and remain competitive; opening of new markets through setup of new offices to ensure proper local presence; and lastly, entering new businesses to valorize ENAV's assets and distinctive know-how. Starting with the details on this. Let's take a closer look for the first 2 strategic. The expansion of the portfolio of activities will be tailored on the priorities of each single identity through which we operate. For ENAV, the main driver is to grow commercial opportunities and valorize its distinctive know-how. Consultancy, training and technical services will become more competitive and will be scaled up also via partnership. Techno Sky will continue to build its offering with new application for ATM and weather monitoring and unlocking new tiers of customers. IDS will strive to upgrade its existing products, and at the same time, implement new systems for aeronautical services. Development of the nonregulated activities will be further improved by a stronger international presence. We will enter new markets for IDS and Techno Sky and we will open 3 offices abroad that will be offering all of ENAV products in their respective market. New countries have been selected based on their potential in terms of planned investments in airport infrastructure or the ability to become aviation or tourist maps for their respective region. We are starting right way. India is set to open in the third quarter of this year and will be followed at the beginning of 2026 by Brazil and Saudi Arabia. Portfolio and footprint expansion will go together with new businesses. Let's start with drones. Drones are not really a new business for ENAV. We are the only player in Europe with both Common Information Service provider and UTM Space Service Provider certifications. With the Common Information Service Provider certification by ENAC, in particular, we are the sole air navigation service provider also for drones. We have expertise as we completed several pilot projects in infrastructure monitoring, logistics and drone detections that have created an important know-how within our group. Expectation for growth in the drone market are robust. We want to capitalize our expertise and the scale up to a full-fledged drone business. We can serve as enabler and focal point of a national value chain for drones, thanks to our unique position. We are ready to activate an offering that can include monitoring of critical infrastructure, drone detection systems and that can be expanded to several areas like logistics and insurance, for example. The business model will be handled through a NewCo fully dedicated to the nonregulated drone business. Still on new businesses, we move to Slide 13, more closely to the Energy Service Company and digital academy. A stronger positioning comes with the assessment of any opportunity available to create value. We have identified 2 new business models stemming from the same idea: generate revenue efficiency by transforming an operating cost into a new business. The first one is the energy service company. Commitment to sustainability and the ongoing efforts on efficiency underpin the reduction in our energy consumption by more than 15% by 2029. The Energy Service Company will transform the cost into an opportunity by selling energy efficiency services to small and medium airports starting with those located in the south of Italy. This will improve our energy consumption, reduce costs and enable a new stream of revenues and a better sustainability profile for our customers. The other new business, the digital academy, follows the same principle. Our in-house training facility is a certified excellence center. We digitalized it into an e-learning platform. This platform will give us flexibility and efficiency in the way we train our personnel and will enable us to generate revenues by selling aeronautical training, procedure, design and release of aviation degrees. Startup for these 2 initiatives is underway. Let me stress once again that these 2 initiatives have not been valorized into the business plan, so their execution will yield upside to planned numbers. Positioning in the nonregulated market can be improved also via M&A. M&A will be used to accelerate the deployment of our strategy. We will apply a selective approach and we'll evaluate opportunities based on the possibility to access new technology and know-how, increase market share, optimize costs and supply chain through synergies. We confirm the M&A strategy presented last year, ranging from licensees and software services to meteorology and drones. We stand ready to execute on all of them provided that they will meet our criteria. Thanks to the remarkable performance achieved, we can benefit from higher levels of headroom. We have up to EUR 350 million to be deployed by 2029 on value-accretive deals. The potential transactions will be fully funded through new debt, always maintaining our aim of preserving financial solidity and sustainability. We are currently in the advanced stage of negotiations on a few deals, and I believe you will hear from us shortly. All the strategic initiatives are connected to our broader sustainability strategy. As you know, sustainability is deeply rooted in what we do. Our commitment is clear and continues to be highlighted by the milestone we achieved also in 2024, as I commented earlier. Looking at the key strategic initiatives, it's easy to see how they connect to one or even more than one of the ESG priorities we have set in our sustainability plan. In the coming weeks, we will publish our sustainability plan, setting the bar even higher on our ESG commitments. Let's move now to the evolution of our organization. The changes to our corporate organization will start with a clear distinction between regulated and nonregulated activities. ENAV will stay as the corporate holding vehicle that oversees the regulated market and will control directly other 3 entities: D-Flight focused on the regulated market for drones; Techno Sky mostly operating as captive technology provider for the regulated market; and a new vehicle fully dedicated to the nonregulated market that we retain control of the nonregulated activities, both existing and new ones. The evolution will not be limited to the organization. We are also going to change the operating model. The way we work will become more digital, thanks to the migration on cloud of the ERP and the AI applications. Our efforts will benefit from excellence centers like the digital academy and the implementation of talent factories. Costs will be reduced, thanks to the in-sourcing of some strategic activities. The organizational changes, coupled with the execution of the strategy, will change ENAV. Let's move now to our targets. In 2024, we have achieved remarkable results. For the future, growth will continue at a sustainable rate even after the impact associated with the regulatory effort. In 2029, at the end of RP4, ENAV is set to achieve results even better than those recorded at the end of RP3. Indeed, thanks to our value-driven strategy, revenues will reach EUR 1.2 billion in 2029, also supported by the growing contribution of nonregulated businesses. EBITDA will increase with a CAGR of 3% and reach EUR 360 million, a level never reached by the company. Over the plan period, we will generate more than EUR 1 billion of free cash flow on a cumulated basis. The value generated will support shareholder remuneration, a cornerstone of our strategy. Let's focus on the dividend policy. We are confident that our strategy will deliver visible and predictable results. Based on this, we changed the dividend policy. For the fiscal year 2024, we will propose to the Annual General Meeting in May a dividend per share of EUR 0.27 per share, up double digit versus previous year. Over the plan period, shareholders will receive a DPS of EUR 0.28 in 2025 and growing to EUR 0.32 per share in 2029. Over the plan period, this corresponds to an average payout of real free cash flow of around 80%, a rule we believe can be kept also beyond 2029. We wanted a dividend policy that was simple and clear based on real free cash flows rather than a proxy and that would allow our shareholders to benefit from the stability and visibility of the regulation for the next 5 years. And now I hand over to the CFO that will walk you through the numbers of 2024 and of the plan. I will come back later for closing remarks.

Thank you, Pasqualino, and good afternoon to everybody. Our CEO has already shown you the key highlights of the operating and financial performance 2024. Last year, we achieved remarkable results set on a level that we never reached, both operationally and financially. I will go more in detail, starting with the traffic. 2024 has extended the positive momentum recorded in '23. We are now handling traffic levels that are far above the record of 2019 and are projected to grow even further in the coming years. Italy has been the best performer of the reference group with a year-on-year growth of 10.5%, 4 percentage points better than the average of the EU countries. En-route traffic is up double digit driven by sound growth of both international and overflight. Terminal benefited from a positive performance across all 3 charging zones ending up at EUR 1.097 billion, up by 10% versus previous year. This operating performance bodes well for our planned targets and was very visible across financial delivery in 2024. Let's move to the economics with revenues and cost dynamics. Revenues came at EUR 1.037 billion, up by around 4% versus 2023 as a result of operating activities worth around EUR 1.05 billion, driven by higher traffic and outstanding performance of non-regulated business that is up around 14% year-on-year, well above the guidance set for this segment for 2024. Impact from balance for around minus EUR 56 million, which is the net effect of the positive balance generated in '24 for about EUR 49 million and the negative EUR 105 million of balance generated in the previous year that are cashed in through the 2024 tariff. This is mainly related to the second tranche of the balance of the combined period 2020-2021, the so-called COVID balance. Cost amounted to EUR 726 million, up by EUR 26 million versus 2023. The increase is mainly associated with higher personnel costs, which stood at EUR 592 million on the back of the planning wage increase, this is linked to the inflation adjustment; a higher workforce to manage the relevant increase in traffic of the last 2 years and the planned for 2025; and the extra time needed for the peak in traffic over the summer. Moving on to EBITDA and key financials. We can see that EBITDA came at EUR 311 million, in line with the group's guidance, the highest ever reached by the company. The strong financial performance is further amplified as we move below the line, indeed, net income at EUR 125.7 million max and 11.5 increase year-on-year. This is mainly on the back of lower G&A and provisions as higher depreciations are more than offset by lower provisions and lower financial expenses driven by higher financial income on deposits and the balance actualization mechanism that partially offset the interest on debt. [ Same ] results is mirrored also from a financial standpoint. Net debt ended up at EUR 258 million for 2024, down by almost 20% versus '23. Over the period, the company generated an operating cash flow of EUR 278 million, which more than covered the cash CapEx and the payment of dividends worth a combined total of around EUR 200 million. Let me highlight that free cash flow came at EUR 199 million, up by 1.4x versus 2023. As a consequence of the operational deleveraging, net debt-to-EBITDA ratio sits now at 0.8x. The strong financial position gives us the possibility to act swiftly to capture market opportunities while preserving the overall financial stability granted by the balance sheet headroom that the plan will generate. Let's now deep dive into the 2025-'29 strategic plan. We start by looking at the key driver of our core business, the new regulation for 2025-2029, the so-called RP4. A few days ago, the Performance Review Body, which is the technical organization that supports the European Commission in the assessment of the performance plan of the EU states, issued a recommendation to the commission and highlighted the consistency of the Italian plan for all the performance areas. Hence, it recommended the approval for Italy. This is a key milestone for us. Now the only remaining step is the formal approval from the European Commission. We are confident it will arrive by the first half of 2025. As highlighted by our CEO, RP4 provides stability and the continuity by confirming all regulatory metrics and KPIs of RP3. Regulatory compensation mechanism such as those related to balance, traffic and OpEx efficiency are naturally reset to 0 at the beginning of the regulatory period in the planning figures. Over time, actual operating data will start to accrue and there will be the possibility to benefit from new balances and do better than the regulatory assumptions. Now we will come back on this point later. Finally, RP4 introduced a change advocated by the company by which terminal charging zone will go from 3 to 2. Now all the airports will be under the same European regulation performance plan with rules in line with en-route. Let's take a closer look to the key regulatory assumptions of our plan. Our traffic forecast for RP4 closely mirrors the base Eurocontrol Stratfor scenario that was published last February. Over the regulatory period, we expect an average annual growth rate of 2.9% with a notable 6.2 % increase in '25 compared to '24. This positive outlook is further supported by the strong performance that we have in January, up by 7.1% year-on-year; and February of this year also, up by 7.6% year-on-year as reported also by Eurocontrol. In addition to the traffic growth, it is important to highlight the impact of other key financial metrics. The expected increase in return of equity and the weighted average cost of capital are crucial factors that also help mitigate the reduction in the regulatory asset base. Specifically, the cost of capital included in the RP4 tariffs is forecasted to be higher than the one in the RP3 tariffs, which more than offset the decrease in RAB, ensuring the financial sustainability of the plan and enforcing the company's overall performance through the new regulatory period. Let me highlight that the PRB has underlined that Italy has the highest level of regulated WACC across member states in RP4. Before we move to the core of the strategic plan, I want to focus on a specific dynamic associated with the regulatory reset. I see the attention is increasing on this slide. As I have just commented a couple of slides back, new regulatory periods always trigger a reset of regulatory mechanism for balanced compensation, traffic and OpEx efficiency. A new regulatory period brings regulated figures as close as possible to the latest actual level, hence limiting the accounting effect and the potential extra returns, particularly in the first year. Moving along the years, actual operating and financial performance might eventually still accrue incremental returns vis-a-vis the regulation, but these cannot be assumed a priority in the planning figure. These recurring and structural dynamics entails that the first year of any regulatory period will be weaker than the last one from the previous regulation. Looking more closely to the 2024 and 2025 bridge, EBITDA is set to be lower by around EUR 85 million, a decrease driven by balance reset for EUR 49 million, regulatory reset on traffic and other operating parameters, more efficiency worth around EUR 38 million partially offset by EUR 2 million positive impact of the cost of capital. Mind you that 2025 EBITDA is an expected number and this does not include any assumption on the contribution from regulatory mechanisms as explained before. Therefore, the real impact of the regulatory reset can only be measured once comparable data are available. In simple word, when we get closer to the actual data. Let's deep dive now into 2025-2029 strategic plan. Over the next 5 years, we will deploy investment for about EUR 570 million, representing an increase of EUR 74 million compared to RP3. The investment plan enabled us to catch all the opportunities and finalize the strategic initiative we have outlined. Our investment strategy will ensure the continuous technological and infrastructural modernization of the group assets, ensuring full compliance with evolving European regulatory framework and enhancing at the same time both safety and capacity. Additionally, the plan will drive greater efficiency in the delivery of ATM services, reinforcing the group commitment to operational excellence and sustainability. Worth to highlight that the tariff defined for RP4 fully covered the investment plan. And now on the revenues. Revenues are expected to reach EUR 1.2 billion at the end over RP4, peaking versus the historical level ever achieved by the company. The lion's share of revenues will continue to be generated by the core business, which is expected to yield EUR 1.06 billion in 2029, underpinned by traffic volumes as well as by the execution of the key strategic initiatives. Not-regulated will double revenues, mainly driven by the expansion of the core product offering set to account for around EUR 70 million in 2029, coupled with the contribution from new markets and new business that should be worth around EUR 30 million in total. Revenue expansion for the not-regulated market can be further accelerated by the execution of M&A opportunities. Moving to costs on Slide 13. After the high single-digit growth of [ several ] between 2024 and 2025, total costs are expected to increase over the plan period at a low single-digit compounded growth rate reaching EUR 838 million in 2029. This is a consequence of the effort to put into the digitalization of core processes and infrastructure that unlocked higher levels of productivity and efficiency. Looking more closely to costs, personnel costs are expected to reach EUR 670 million in 2029, driven by higher head count and in line with the operating growth trajectory. Worth to mention that despite increase in the workforce, the relative weight of personnel costs on total revenues decreased by 7 percentage points from 63% to 56% at the end of the plan. External costs are expected to grow at a CAGR of 2.2% over the plan period as the expansion of the business and the geographical footprint trigger an increase in external costs. Also for the external costs, let me highlight that the relative weight on total revenues remained flat demonstrating the high focus placed on value creation and careful execution of the key strategic initiatives identified on both the regulated and not-regulated business. Let me now guide you through the significant drivers of EBITDA growth from 2025 to 2029. EBITDA in 2029 is planned to reach EUR 361 million, a new record level for the company that will be reached mainly thanks to higher traffic revenues in the core business, expansion of revenue from not-regulated activities and the focus on cost optimization and efficiencies that mitigates the impact stemming from operating costs in the context of higher traffic, larger asset base and higher workforce. Managerial efforts on the top line as well as on cost ensure a timely delivery of our strategy and enable higher level of performance and value creation. Moving on the next slide, we can see how financial sustainability can support value creation going forward. Financial equilibrium has been one of the key priorities in the definition of the strategic plan. The group has proven its cash generation capabilities over the past year, and the next 5 will not deviate from this path. Over the plan period, cumulated operating cash flow is planned to be equal to EUR 1.6 billion. Operating cash flow will fund investment, dividend policy and deleveraging preserving financial sustainability along the growth trajectory set out for the company. Cash generation and financing strategy will result by 2029 in 0 net debt as we create the space for optionality that can be activated on an as-needed basis focusing on the potential extra needs of the core and the noncore business and some cherry-picking M&A. Assuming a net debt-EBITDA ratio of 1x as fundamentally healthy and sustainable for our company, we would have headroom for EUR 350 million by the end of the plan. We stand ready to use this flexibility, issuing more debt to fund M&A opportunities and enhance even further ENAV growth. Finally, let's go to the plan targets. The 2025-2029 strategic plan sets ambitious financial targets with the total revenue expected to grow by 1.2x, reaching a milestone of EUR 1.2 billion by the end of 2029. This growth reflects a solid and sustainable trajectory driven by both core and not-regulated performance with the last one set to double by 2029. The plan highlights the company's effort to diversify and expand its revenue base with a focus on seizing new market opportunities outside the regulated business. In terms of profitability, the company aims for an EBITDA of EUR 361 million by 2029 through solid operating results and efficient cost management, not considering the potential upside associated with the regulatory compensation mechanism. The net result of EUR 165 million in 2029 underscore the company's commitment to deliver substantial bottom line growth, translating the top line growth into the solid financial performance and shareholder value. The stability and the predictability of our targets were highlighted also by the sensitives that we run by changing the underlying assumption on both the regulated and not-regulated business. The analysis resulted in a very limited impact in terms of revenue and EBITDA at risk in case of a negative scenario. Together, these targets show a clear path to sustained growth with a balanced focus on revenue expansion, operational efficiency and the profitability over the next 5 years. This approach not only position us for long-term value creation, but also supports our new dividend policy ensuring growth in earning and adequate returns to our investors while upholding financial discipline and sustainability. And now I give the floor to Pasqualino for the closing remarks.

Thank you, Luca. Yes, the business plan that we have presented today is solid and benefits from the stability granted by the new regulatory framework for the full plan horizon. The regulated business remains core. We will complete the key strategic initiatives in order to further improve the level of operating performance and preserve our technological leadership. This will position us in an optimal way to handle growing levels of traffic in the future. New nonregulated business will accelerate more than ever. Delivery has been very strong so far and it will improve, thanks to the new businesses, the opening of new markets and the expansion of the portfolio of services we can offer outside of the regulated market. This segment is going to be crucial to diversify revenue sources and improve profitability of the group. The visibility we have on targets and the confidence on managerial execution translates into a significant improvement in shareholder remuneration. Thank you for your attention, and now we can open the Q&A session. Thank you.

Okay. Thank you so much. So if we are ready, we can start with the Q&A. I'd like to ask analysts who raise their hands, please introduce yourself, your name, family name and the bank you represent, please. Thank you. Maybe we start with you, Amal. Please.

Amal Patel from UBS. Three questions for me, if I may. So first one being the EUR 225 million EBITDA in FY '25, this is certainly a little bit lower than the EUR 265 million-or-so that was suggested in January, which is roughly where consensus is at. What explains the difference? And has anything changed since then? Second question on free cash flow '25. In the past, you've suggested around sort of EUR 230 million to EUR 240 million. Can you provide any color on the building blocks there? If I look at Slide 32, you've got net debt at EUR 135 million, which is an improvement of EUR 130 million year-over-year. If you then consider the dividend that you'll pay of EUR 147 million from results, that would imply a free cash flow around EUR 280 million to EUR 290 million. Can you confirm, ballpark, is this the range that we should consider or are there any other moving parts? And then the third question is on OpEx. So Slide 30, you have personnel costs and external costs forecast to 2025, while in Figure 21, you have the 2024 number and this shows OpEx increases of around 8% to 10% year-over-year in '25. Why is this so much? And can you split out what proportion of this is wage inflation versus the number of FTEs and any other costs?

Thank you so much. Let me start with question number one. Now the reset of 2025, or let's say, '24/'25, well, we've always -- well, of course, it was impossible for us, I mean, to give you the numbers because the balance sheet wasn't closed. Anyway, the effect of the regulatory reset from one RP to another are very similar. So we have given some indications, I mean, to see what happened in 2021 during the reset RP3 versus RP2, okay. It was in 2019. If you check 2019, 2021 and 2024 values were the reset for 2025. Again, these values are very similar, around EUR 80 million, okay, more or less. So well, I have to say that -- well, this is the first part of the answer or the explanation. The second is, of course, we have to close the numbers of 2025. During the presentation, we said that the actual -- real makes the difference because the balances are calculated at the end. So at the end of 2025, we really want to be very straightforward on your answer. The balance was a little higher than what we thought we could have. So the amount -- sorry, 2024, of course, 2024, not 2025. 2025 is a planned figure, so of course, I meant '24. Okay. So basically, this justifies the difference. Second question, free cash flow at CF '25. We said EUR 1 billion free cash flow over this period. Now of course, this changes year after year. I don't remember exactly the value. Yes, it's around EUR 240 million. This is maybe 2025 free cash flow. This is the value we also have in our minds. And as for the third question concerning CapEx -- OpEx. Yes. Sorry, sorry, I forgot the question on the OpEx.

Amal, can you please repeat the question, please?

Yes. So the third question on OpEx. So you have your 2024 OpEx and if we look at 2025 OpEx, which you projected, it shows an 8% to 10% increase year-over-year. Why is this so much? And can you split out wage inflation versus the increase in FTEs and the different moving parts?

Okay, sorry, I had CapEx in my mind instead of OpEx, sorry. Now as for OpEx, you know that at the very beginning of the regulatory period, you know what happens. So the company is planning right now to have some developments, so higher costs in 2025 versus what we had foreseen or put in the 2024 total. So you know the regulatory mechanisms today. So basically, we confirm what we have always said in the past. Okay. I hope I have answered the 3 questions. Thank you.

Carlos Caburrasi from Kepler. I have a couple of questions, mostly clarifications. For 2029, you're guiding for EUR 360 million EBITDA. In January, the message was that it was going to be closer to '23-'24 levels. I've seen that you're guiding for EUR 29 million in cost savings, but what is the difference, the EUR 30 million additional in EBITDA? And then the second, you're getting for EUR 100-something million in nonregulated revenues for -- I mean, last year, it was EUR 170 million taking into account the inorganic part. Is that out of this calculation? And this EUR 106 million is mostly organic?

Thank you for the question. Question number two, if you don't mind. As for the nonregulated markets, last year we talked about EUR 100 million and we confirmed that for 2029 we said EUR 70 million that we would do on inorganic growth, so with possible M&A, so possible acquisitions. So now the fact that during 2024 and until today, we haven't done any closing on M&A operation. Well, this means we are very serious because last year we told investors and we told the market that we close operation only if operations meant value for our shareholders. So this means that ongoing negotiations, as I said during my speech, yes, so we do have negotiations, but the foundations of negotiations are based on what I have just shared with you. So I do confirm the EUR 106 million. So we don't base our developments and our capacity of making markets out of the regulated market on hypothesis. So today, I want to be here with actual data, which is EUR 49.4 million that you've seen this year and this is the result, so the fruits of an extraordinary order portfolio. It doesn't just represent the possibility of the company to deliver and to work internationally, but it also represents a clear signal of the capacity that the company has to do backlog. So once again -- we do backlog once again. And this means that we will be able to deliver in the future because we have something in our warehouses, so to say, much better than in 2024. In '24, we had to reorganize the company and we have highlighted this kind of business because we think that on this, ENAV, which is capped on the regulated market, will be able to get satisfactory results. We sell excellence around the world, just like a few international players. First question, EUR 360 million EBITDA. Now the regulated market is capped. I mean, there's a threshold, right? So what we tell you today with our numbers and negotiation with the European Commission is that the entire regulatory period is now moving on values and numbers, which are much, much bigger than the previous regulatory period. So if you believe in ENAV and if you have the guarantee to see a company which is highly structured on regulated market and on its core business, well, let's say, you have to understand that in the next 5 years the EBITDA volumes and margin volumes, of course, will be bigger than what we did in the previous regulatory period. If you check the first year and if you check the reset of the balances, the resets of the tariffs, so you see lower margins versus the previous year of the previous regulatory period, please don't forget ENAV is a company having a guarantee profile, which is very high. So the regulated market helps us do so. In the COVID year, ENAV had EUR 50 million of profits. So when we talk about seriousness in terms of investments and infrastructure over 5 years, well, it's difficult to find this type of companies on the market, I mean, as strong as ENAV is today.

Marco Limite from Barclays. First question, the reset '24-'25 that you have guided at around EUR 70 million. Can you give us some color on the moving parts? There was a slide, I think it was Slide 27, so just some more color, please on the moving parts. This is question number one. Question number 2 is on the M&A strategy. So how far are you or how close are you to a possible acquisition? And in terms of expectations within the EUR 350 million of budget, should we expect just 1 acquisition for EUR 300 million or maybe 10 acquisitions worth EUR 30 million each? So if possible, some details about this. The third question is on shape and trajectory of the free cash flow from '25 to '29. Now '25-'26 will benefit from the recovery of the balance, so free cash flow should go down to 2029. So what is the amount of free cash flow you expect in 2029? And if you go over 2029, CEO talked about the 80% policy so flat or stable even after 2029. Do we have the risk to have a dividend reset beyond 2029 because the 2029 dividend will take advantage of balance recovery?

Thank you so much. Question number one, the reset 2025. Can we go back to the slide? Anyway, you're right. It was Slide 27. Let me summarize it. The EUR 311 million EBITDA in 2024 -- okay, here we go, this is the right slide. So basically, we have EUR 38 million, this is the reset of the mechanism due to traffic. Now you know that we closed the year with a plus 4% traffic versus the tariffs so the performance plan. Within 2% you have [indiscernible], so you have different benefits. So if it was negative, all of this will be paid by the company. So we have 2%, which is ours. And then all the rest are up to 10%. So the remaining 2%, this is shared on a 30-70 basis with the market. It means that we are giving back 70% while 30% is captive within the company as proceeds or income. So this mechanism also works the other way around. So if we go below versus the figures we planned, of course, we are covered by 70% then you have the cost of recovery 10%. So EUR 38 million here means traffic. Maybe remember the 3 bullets, okay: traffic, cost efficiency and balance. Now in this case, we have traffic plus cost efficiency which, of course, lost in the reset. So it's basically traffic. While in the EUR 49 million area, we have the balance reset. So this is exactly the balance of the year, so this is the balance of the year that we have generated. I'm talking about generating balance, okay, I'm not talking about the tariffs. So these are the 2 different items. This is the balance we generate in the year and it is paid or collected after 2 years. EUR 49 million of balance, also helping us reach the result of the year. At the same time, we will basically collect them in 2 years, which is the 2026 tariffs. So when you reset the figures at the very beginning of the regulatory period, this is traffic plus cost. Everything is aligned, including the balance of the inflation. All of this is aligned to the planned figures because this was done 2 months ago. You have to remember that the values are planned values. All of this is aligned, okay? So balance is 0 in that case. So in this case, we don't have extra efficiencies and this is the reason why in 2025 you can see the box on the top right, well, this is to tell you well, this is what we have planned, planned figures. At the end of the year, so upon closing the financial statements, we have to make sure whether or not we have generated extra traffic. And as of today, we have plus 1%. This is the average of Q1 versus 6.2% that we said before. So now we have 7.1% for the first 3 months of the year. So once again, we have 1% extra traffic. So once again, we will include and even increase of the proceeds of the income. And this is on top of the number you can see here. We will also have inflation balances and other types balances. So once again, the regulatory system applies not only on the planned figures, which is what we have shared with the regulator, but in the financial statements so this may change. This is what the Managing Director just said. So of course, this fundamentally is so important. This is what we talked about in the previous debates and presentation. So this is the way you and we have to understand this slide. This is a reset on the planned figures. As for the final figures, we have to wait for 6 or 7 months. So at the end of the year, there may be positive surprises versus the EUR 225 million you can see today, but this is too early to say.

As for the second question, M&A strategy and the unregulated or nonregulated market question. This is what I said last year, so we started from a concept that I'd like to repeat: our company is a regulated company. So core business is absolutely fundamental. And the guarantee is the beating heart of our company. So we will never shift our attention from the regulated to the unregulated market too much. So during 2024 -- throughout 2024, we've been able to share and to show that the regulated market has incredible possibilities to grow for our company. And this is what we do today by sharing with you very tangible concrete numbers. And this is to explain a growth that was basically an organic growth. We have basically shared the skills we have, the fact of implementing technology. So basically, we have been able, I mean, to sell technology well around the world. Now I'm sure that this is absolutely what we have done. Our company is the most efficient service provider in Europe and one of the top providers in the world. So when ENAV, let's say, moves around the world, well, we do this with an incredible extraordinary expertise and an incredible possibility to sell and to deliver, which is, again, extraordinary. Of course, throughout 2024, we have to reorganize our company so as to generate EUR 100 million organic growth we talked about last year. And today, this is based on strong foundations, which is the EUR 50 million that we have collected in 2024. As for operations, well, some markets are very interesting. We have a company, for example, in ENAV Group, the name is D-Flight. 60% is owned by ENAV, 40% is owned by Leonardo. This is the #1 company in Europe to be certified for the management of drone space so Common Information Service Provider. But this is also the first company, it has been certified of UTM Space. So the possibility to carry out services in this kind of drone space. So this is a unique specific position held by a small company. I mean, it's ENAV. So we are a public company. We are a listed company. And this means we can step into markets that, in some cases, are so difficult for many other companies. So they may bump on to entry barriers. But we talk about the strategic infrastructures, the control in our [indiscernible] and even our top value-added services. Well, we can do this because, of course, we see that these markets are really, really booming. And shortly, I'm sure we will get into important operations. So ENAV will probably take over a small company. Well, of course, not just the 1 single EUR 350 million operation, a smaller company that may be easily integrated with ENAV, being able to carry out plenty of extra functions. This means that we will be able to offer high value-added services and they have very, very high margins. So the value for our shareholders is represented by the fact of being able to deliver, but at the same time, we have to carry out the in-depth analysis. If I came here with the acquisition of a company within 8 months and some people said something like this, well, today, I wouldn't have done a positive service. We do analysis all the time. Of course, we will sign when we know that the value of our company won't be decreased. We want to offer extra value, not less value. Last question on the dividend policy. Well, it shifts the attention. It's very easy, it's very simple and it's for a capped company like ours. So we have to explain analysts that in the first year of the new regulatory period, margin level goes down. But as you said before, there's a cash volume that comes from the balances of the previous regulatory period, and this is something we can put our hands on. The cap is 80%, we will comply with it. And in the next 5 years, we will give you 80% of the free cash flow we will generate the actual one. So it's easy, it's very clear. We know what we will give to our investors and shareholders. And we are sure this will happen. And so of course, well, some people will replace us. There will be new Boards of Directors after ours, so they know that this policy can continue also in the future years, okay? So I really hope I have answered to all of your questions. Thank you.

Now let me follow up on the free cash flow, FCF, question. So as we just said, of course, we have to comply with our free cash flow generation curve. Of course, this is due to time. So once again, we have shared with you planned figures. And of course, they do not include RP4 balance generation, okay? So what you saw today is net of these balances, of course. So, so far, it's always been like this. So we think that the trend will continue, but starting from today we have to see the final balances. You will see movements generated by regulatory balances. Today, we have a curve that's going down when free cash flows of the previous year, the balances is set to 0. Of course, I'm talking about 2027. So EUR 550 million balance that we have to collect. But then something else will happen. So the dividend policy today is based on their free cash flow and it is also based on the numbers that we can guarantee as of today. So the consequence is that the dividend policy, as we said before is going up, but on the other side, the underlying flows will be redistributed so that we can absolutely comply with this growing, if you will, dividend policy. So the question is, what is the number? Well, of course, we don't have any disclosure on the number. But we're talking about cash conversion. So cash conversion will be applied to the EBITDA. Maybe you can take into account 2029 EBITDA, so EUR 360 million. Cash conversion would be around 40% to 45%. If you do the math, if you do the calculation, you can check your own FCF. And the number is a big one because the company would reach those performance levels, which would be very big. So we won't have any planned balance, but of course, the cash value that we will generate in 2029 will be so big. And last but not least, we will also have other balances. I mean, other regulatory mechanisms. Now in this case, of course, I cannot promise, but this may further increase volumes within 2029, okay? So this is the way you have to understand the acronym FCF. So the free cash flow the way we describe it today.

Mr. Bacoccoli, Intesa Sanpaolo. The first question is on 2024. EBITDA went up by 3.4%. Back in March, if I'm not mistaken, last year, we were on a mid-single digit, but traffic boomed, so plus the 10%. So my question is why couldn't you increase the EBITDA, so even better than the one you mentioned? Question number two, if at all possible, is on the BP, business plan. CAGR of the regulated business is around 14%, if I'm not mistaken, and traffic is 2.9% CAGR. So can I have some color between -- I mean, on the difference between the 2 numbers? So why is there a delta or a gap? Question number three, I'd like to go back to the end of 2029. So we will have RP5. Now I know we're talking about RP4 today, but please make an effort and help us imagine, I mean, what may happen in 2030? So EBITDA, EUR 360 million in 2029, there shouldn't be any interference so -- or any balances except for any accounting effect. So may I say that 2030 won't show us a decrease of EBITDA, which is what's happening right now? Or am I missing some unknown mechanisms? Fourth question on free cash flow. I made my own calculations, and I can see that the normalized -- the free cash flow net of the balance is around EUR 140 million to EUR 150 million. And so this is the end of the plan, let's say, 2028 or even 2029. Can you confirm these numbers, please?

Thank you so much for your questions. So question number one, and if I'm not mistaken, it was on EBITDA, so the possibility we have to generate quite a good EBITDA in 2024. So you think that it didn't go up a lot. Well, behind this, that's something else. I mean, there's a big difference between proceeds on the one side and overheads on the other. So for example, just consider the European regulator or, for example, well, control or management center, they tell you that the traffic growth volume will have to be 6.5%. So you set the organization on 6.5%, maybe you do 2% more. But then you have to manage something like 400% bigger than what you thought. And of course, you have to increase costs of basically management overheads. Now I know this is a big material infrastructure. But don't forget that there are men and women working behind infrastructures. And they have to do something so important, they have to offer safety to the national space. So instead of having 1.9 million flights, so when you have to manage 2.2 million flights, well, the situation is so different and even a little bit complicated. So once again, no compromises on safety, but of course, the costs go up and margins go down as a consequence. Anyway, those values also have to take into account all what we presented to the network management. I mean, last year, for example, we have implemented a CapEx level that we had never seen before at ENAV. So this means we've implemented plenty of technologies. So we guaranteed our platform, so the platform was able to manage, I don't want to be too technical, let's say, that the number of flights was much bigger. This is what we did at the end of March 2024, but the deadline was at the end of December '25, so we did this 18 months earlier. We did so because, of course, we wanted to see a positive result in 2024. But just consider that France, Germany, Austria and many other countries, I mean, today, they do not respond in terms of efficiency, effectiveness and capacity. They don't know what to say to the network manager because once again traffic is going up. So network managers come here. And in our country, what they find is the right tool, if you will, so that they let us -- well, actually, they ask us to manage and to control more flights. So you can see costs here on 2024. But this is a plus considering the increases in margins that we will have right now in this new regulatory period, RP. Once again, we are, let's say, forward-looking, okay? I'm not just thinking of 2025, but I'm thinking of an organization that, of course, has to consider the regulated market flows, but at the same time, we're thinking of the organization of our company considering the first 2 years of the regulatory period. What happens, those 2 years margins drop. So we do think that those margins will definitely increase also in the first 2 years of the next RP as compared to our status. Question number two, Luca, please go ahead.

You have a question again on FCF, and I'm confirming what I just said. So EUR 1 billion considering the RP, if you consider the balance effect, I do confirm this number. Now when I say full speed, of course, this is exactly what you said so the last 2 years. And of course, it will be a little smaller in the first 2 years. As for the RP5, I'm thinking of 2030 or 2031. Well, it's a long way ahead. And well, we have a slogan here in the company saying that, I mean, we are not sure -- I mean, we will all be around the same table in 6 years. Anyway, you have to consider the actual values that we will have. You don't have to consider the planned values. You have to consider the efficiencies, the balances and traffic. So the better you perform the higher the values that you've just seen, right? But then you have a reset. And then during the reset, you lose a little chunk of the pie, right? So just consider the width of the pie, there may be something like EUR 70 million to EUR 80 million. It may be a little bit more or a little bit less depending on balances. [Audio Gap] of the real, I mean, actual numbers, okay? Am I missing one of your 4 questions?

Some color, please, on the growth of the regulated but also unregulated markets. Once again, the forecast for 2029, you mean?

Okay. Well [Audio Gap] this is basically due to traffic or traffic-only because, well, traffic increase will help, of course, but we also have a tariff issue, if you will, that we have to take into account, which is also beneficial element for us. Don't forget, tariffs include planned costs on planned traffic. So the calculations we do are based on this kind of formula. Well, I know that this may sound a little difficult, but this is the only answer possible. Yes.

Aleksandra Arsova from Equita. I have 4 questions, so some follow-up questions on what you already said. So let me start from the '26 to '29 EBITDA. Now there's a striking difference. I mean, EUR 140 million from 2025 to 2029. So if we make, I mean, the previous comparison 2021, we start with the same EBITDA, but then we reached EUR 300 million, EUR 311 million. So this means EUR 80 million, maybe EUR 90 million. Now we have EUR 140 million gap. So what about this gap? Is this due to costs? Because if I consider the P&L, I see plus 9% in 2025, then I see plus 1.5% before the other years. So are growth of the P&L costs lower than inflation? So in terms of employee costs, I mean, wages, which is the most important slice for you, how can you do this? I mean, costs are increasing less than inflation knowing that traffic will go up in the next years or so. So where will you get these efficiencies from? Question number 2. On RAB, so you said EUR 824 million. Can you tell us about the -- is it en-route? Is it terminal, so Zone 1, Zone 2? RP2 income it was around EUR 1.2 billion total RAB, so EUR 1 billion en-route and the rest of the terminal. Then some M&A, some CapEx, so let's say, we ate EUR 100 million. If I set off with Zone 3, this is what I expected. So what is missing so between EUR 1.2 billion and the EUR 800 million, which is where we ended now. Question number three, on the dividend and free cash flow beyond 2029. So if you consider what the CEO and the CFO told us, so you want to distribute at least 80% of free cash flow in 2029. This means that the 2030 dividend would be around EUR 120 million, so EUR 0.22. Is this sustainable? Can you please confirm this? Maybe last question, a technical one. What about -- or how much incentive you have in 2024? What about the estimates bonus-malus in '25-'29, please?

Okay. Let me starts with the growth of costs, of wages below planned inflation. And well, this is what I said before. I mean, this year, you must have seen that margins went down because costs went up. And they went up not only to face the traffic increase we experienced in 2024 but also because in the negotiations we have. So in this kind of stream of dialogue that we have with other service providers, but also with the Eurocontrol and network managers, the estimates for the years to come, we're growing, growing traffic with the CAGR that you have seen before. So well, basically, we have to organize the company. And when you organize a company, well, you have to organize it in the right way, I mean, so that you can really face, if you will, peaks in those cases where you have peaks like 2024 with higher costs on the one side, but on the other side you have to let new resources in. And maybe you want to strike a balance versus the controllers leaving and by implementing technology that always helps. The plan is not just costs and income, but it is especially an investment plan. This means EUR 0.5 billion for the company for the next 5 years. How can we spend it? Well, we can change or replace our air traffic monitoring system. And we react before other service providers, so we will replace technology earlier. This means, of course, we will have major savings, but also a better management of traffic and lowering wages. It doesn't mean we will have less heads. I mean, we will have lower costs, thanks to training processes, so we will introduce younger resources and we will reach the cost level that you can see inside the plan. So we don't have to reduce costs because we have to increase margins. I mean, all of this is based on a serious plan that we have implemented throughout or after a year of hard work with the first lines of the company, with HR and then operations. I mean all those have contributed to give us those numbers and to, I mean, tell us about growth rates. As for BM, now 2014 was a very special. Inefficiencies in the European sky were absolutely dramatic. I mean, we closed with 0.66 minutes delay per flight manager, which is less than 0.07 we had last year. But of course, this has given us the possibility not to pay any penalties or fines. And please, I'm not just talking about Italy, I'm really talking about the rest of Europe. At the same time, we couldn't get the bonus because our bar is so high and so higher than the others because other countries have an average of 1 minute while we have 0.07 minutes of delay per managed flight. So this means that overperforming is really, really difficult. Anyway, we talked to the network manager. We also talked with Iacopo Prissinotti, he is Italian and he is European Network Manager today. We confirmed the fact that for 2026, we will offer the network manager a new strong space because technology will help us so much. So we invested a lot, I mean, to improve technology. So once again, the network manager will have the possibility to manage that kind of extra traffic that many other countries won't be able to manage. So this means that, once again, the bar is so high on the bonus. And if I'm not mistaken, we have reached 0.14 because now we have to go through the reset. So we started from, yes, in 2024 we had 0.14 minutes delay per assisted flight. So we got 0.066 this year. I'm sure next year we will get a huge bonus. So the missing pieces, if you will, for 2024, help us for the margin in '25-'26, especially in the first 2 years because, as we said before -- and that reset hasn't been really understood by the market. And this happened because we couldn't unveil the numbers being dealt with the commission when working on the performance plan.

We're talking about EBITDA '25-'29, we are making reference to Page #31. We have EUR 225 million planned. 261 -- well, we have planned a higher traffic to 130 million. So 130 million returns for the traffic effect and tariffs and all other factors, of course, sort of combined effect. Nonregulated segment will be increasing by 2x, EUR 54 million returns more compared to the 2024 period. EUR 34 million for the cost of staff. Well, we have an effect of the cost of staff, but remember that we have many investments for technological projects and ACC approaches. So all these different initiatives will imply a EUR 20 million cost. We have less cost for staff because this project will help us having this sort of effect. So during the presentation we mentioned that, so we should perceive this change also taking into account the optimization of staff costs in different centers. External costs, we have an effect of EUR 14 million. So we get to EUR 361 million as planned. Now talking about RAB, Page 26. That's the last -- or the part on the right of the slide. If we take a look at that, how should we read this slide? You know that RAB is regulatory RAB. So the regulator decides what kind of asset base should be included, this is called regulated asset base, RAB, that's why it's called that way. Regulator decided that up until now, balance could be included into the calculation of RAB. From RP4 onwards, we can't do that anymore. So using this balance or balanced mechanism in order to cover costs was considered sufficient and important by the regulator in order not to increase the RAB with interest. So basically -- we basically said that these are RAB or forecast RAB. This is defined at the beginning of the regulatory period in 2024. It was defined -- well, for 2024, it was defined in 2021 during the COVID period. And this 2025 one was defined in 2023. So we have forecast. So for 2024, there were the projections of the balance as included in RP3, but according to 2021 values. Of course, the actual number is very different, but this is not reset in the tariff. Please remember that our regulatory system wants RAB to be defined with values that changed the WACC part, which is related to the cost of debt. And that part, that value is actually updated year-on-year on real values and real costs of the company. So in order to summarize, we have included this value. And this is the RAB that will be included in the tariff. So the numbers and some figures may vary, but this EUR 300 million delta, the EUR 305 million RAB is the forecast. Please take into consideration that the net impact on the cost of capital, the average ROI and the cost and the average cost of debt, which is a value that we should always take into account that we should update that, we have an average WACC at 6.7 which is a value that entirely compensates the variation in the number of the RAB. So 2025 compared to 2024, we had an effect -- a net effect of EUR 2.2 million. So let's start from this assumption. I should have answered all the questions, if I'm not mistaken.

Dividend beyond 2029 of EUR 0.22? Yes, so we're talking about dividends in 2030. Yes, so for '31, for '30, we've said that we could maintain that level of dividends beyond 2029. We did that because this is a 5-year strategic plan. And we want to, say, transfer the capability that we have right now to future leaders so that they will be able to continue on the same path that we've started.

I have 4 -- or 3 questions, rather. First one is the ideas of inflation included by the regulator and the range of inflation, which we can generate balance. The second question is related to the bonus that should be included in 2025. And the third question on the levels that -- the leverage level potential that you would consider optimal. What -- where your valuation and if there are some business models in which we can deviate from the reference points that you've included in your slide? Evaluations on the leverage potential of the company. And maybe considering different business models, if there's some leeway in that?

Okay. Inflation. As per regulation, we had to -- well, not only Italy, of course, all member countries, we use the last available data whenever you draft the performance plan, the last available data of the International Monetary Fund for the reference country. So the reference number is the number or the figure of the International Monetary Fund for Italy. That was, I think, October and November. When does balance trigger? So whenever there's a different value with the cost base in tariffs, not the actual value, but the cost that were actually negotiated included in the tariff that is the reference.

For 2025 bonus, the answer is yes. We are confident that we will be able to get to the objective of that service provider companies are impacted by strikes in Europe, you know that. It's better to be transparent and clear about this. So we have very high levels and very high rates of strikes. In 2023, we didn't have general strikes in ENAV. I think this is pretty positive factor in reconstructing our industrial policy and also of our industrial relationships go into that direction. So in order -- we want to ensure our partners the recognition that they deserve in terms of bonuses. So the reconstruction of all of this in relation to trade unions went to that direction. So on one hand, this allowed us to have a lower number of strikes. So having the possibility of telling to the market and telling to our investors that, listen, we won't have strikes until the end of the year. And on the other hand, we were able to say that thanks to the constant dialogue that we have between -- with the trade unions that we have solid agreements, solid deals, and we are sure that we will get to bonus values without any doubt. So of course, there are some -- there's still some uncertainty. We can't be 100% sure, but I believe that this is the direction that we're going towards. And I think this is very much appreciated by the people that work in traffic control and it's also appreciated by companies and our clients, our main clients. Second part about debt. Well, if I came here with 3 M&A operations presented to the Board of Directors, I would have had maybe an answer to the question. I would say that we could use a part of debt in some other words, but actually that's not the case. We will be performing debt M&A because in the following 5 years we'll have a positive net position. So some debt is needed, but that doesn't mean creating debt. It just means having operations that are able to create and generate value for our shareholders. And over time and with the effort and commitment of our company, we will be working with those operations. So that is generated within the group. And since it's a group that after the separation that we've done between regulated market and nonregulated market, we will be putting a lot of care that debt is used in operations that are able to generate value for our shareholders.

Amal Patel from UBS again. So 2 further questions from my side. Union negotiations, when do they start? And I guess what is the risk that the union will ask for very high wage inflation? And then a second follow-up, if I may. There were some articles a while back speculating that the Italian government may be looking to sell down their stake. Has there been any commentary on this since? And can you provide any color -- further color here?

The negotiations with the trade unions on agreements for wages increases is discussed in the framework of trade union relations. So we do that constantly. The company is structured and organized in order to monitor these sort of activities constantly. And this ensures that, on one hand, we are able to have a direct connection between the headquarters and controllers. So they don't feel abandoned, they don't feel alone and they are aware that they are part of the team that works in order to struck deals -- to strike deals that will help us have better performance compared to the past and that ensures the correct bonuses and remuneration for them. Our structure and headquarters and also I deal with that directly. This is, of course -- this makes us proud. So not having strikes and having an adjustment to salaries, having a whole mechanism that is able to strike agreements that are not related to abstract considerations, but productivity values, so real values. This means that the higher their productivity, the higher the productivity for the company, the higher the marginality. There are some contracts renegotiations, we've taken that into account. And in drafting our plan, we've taken into account the experience and the dialogues that we have undergoing with trade unions in industrial relations. So we are well aware that the numbers are reflected in the trend of costs for the following 5 years. We have put a lot of care in this because recently we've had processes in which costs have fluctuated a lot. So reorganizing our company entails this operation. So right now, operations and HR are in constant dialogue. They are able to find solutions. And in their relationships with trade unions, we are able to get to excellent results. Actually I don't know, we should ask our majority shareholder, our government. I don't know if they'll be interested in selling out their participation of the company. But whether that's the case, I'm sure they will tell us. So I don't really know what we'll answer here.

Okay. I have a question related to cost. In the past, you showed us a slide about the cost for RP. We closed 2024 with EUR 689 million in determined cost nominally. One is the starting point for 2025 and where we'll be going towards 2029. And then a second question, you were talking about leverage. You were talking about EUR 350 million for potential M&A. So if we won't have that total M&A, will this value be distributable as dividend?

Okay, it's true that we didn't provide that detail. I'm answering the first question, so we're talking about figures for '25-'29. Historically, we would give visibility only to determine cost, but we didn't give visibility to our industrial plan. This is the first plan that together with Pasqualino, we decided to present industrial plan with some details on the figures differently from what happened in the past. We preferred giving you the data related to results instead of some intermediate results that wouldn't help you get to the final number that you'd need. The commission still needs to approve the whole thing, and we'll maybe give you some more details in the future.

The second question. Well, we have structured a dividend policy that is very clear. The pillars are well defined. So creating more debt in order to distribute more dividend, this is not something that we want to do. This is not a policy of the company. We want to create -- to generate debt to have more marginality, to upgrade our results so that we can maybe improve the dividend that we've established. Of course, if things fare better, we might think about that, but not with that, not with the unspent part of debt.

I have a few questions. One about the European Commission. Is it possible the European Commission won't approve the plan? And the second question on traffic being funneled into our countries in the view of the inability of neighboring countries to manage volumes. What would be the upside in that case? And that's it.

On the first question, we are going to wait for the European Commission to take stock with other member countries. Having an official approval on the plan is, of course, a very positive element and it makes us proud because all the member countries are still struggling, but because our plan is well structured and the European Commission didn't have any objection over -- on our plan. The regulator is the people -- the person interacting with the commission on the approval of our performance plan. The second question, I'm sorry? Yes, the second question, well, the dialogue that we had with the network manager goes into this direction. We work with technology. So we have worked in Rome and Milan in 2024. We have worked on technology and we have improved the capability of our skies. So together with Spain and Greece because, of course, alone, we can't do much. Together with these countries, we ensure a level of capability that is able to allow the network manager to shift traffic when in summer as expected maybe other countries will be struggling. We'll not be happy, of course, if other countries will be struggling because we -- the direction probably in the future will be having a common air space in the European Union. So we want other member countries to be aligned to the performance of our company. That said, we are ready to receive from the network manager this year, next year and in 2027 a higher level of traffic because we were good enough as to improve the capabilities of our sky and our space.

You have provided a very clear guidance for dividends between '25 and '29. You've also said that there might be an upside from nonregulated growth, M&A. The upside on the free cash flow and EBITDA, could it become an upside on dividends? Or will it be stable on the figures mentioned in the plan?

Well, again, since we want to have great balance between our figures, of course, as I've said earlier and as we all hope, if this upgrade will produce higher marginalities, we might want to review dividends on the upside. So yes, so higher values compared to what we have mentioned, but I've already said that to your colleague.

Very good. Thank you. This will be the end of the Q&A session. We've also received some questions from the webcast. We have received them. Some of them are addressed to Felice and they all focus on the digital academy. Some questions asked about more details about the initiative and what are the priorities and the positive effects that we are expecting.

Good afternoon to everybody. Well, the digital academy was created as a project related to the academy in Forli. This is an excellent center for training in which air and traffic controllers are trained and other professionals that are critical in the management of air space. The objectives of the academy are to, firstly, improving cost efficiency in training. This is good news in terms of cost efficiency. Again, the other objective of the digital academy is that of transforming the real academy into an e-platform that we can export abroad. We have identified some foreign countries, India, Saudi, the Emirates and Brazil and South Africa, in which we want to export this platform for specific reasons because these countries from an infrastructural standpoint are growing in triple digit. So just to give you some figures, we are expecting EUR 300 billion in investments in India for the construction of new airports. This is related to the need of [ untapping ] the potential of these countries. And our academy, and the digital academy specifically, is aimed at [ untapping ] this potential, and we want to scale it up in order to take it to foreign markets. There are also African countries that are particularly receptive on this topic. So the human capital is at the very center of our policies as our CEO was saying because air traffic control are critical. They cannot be replaced. And we believe that innovation policies and the introduction of artificial intelligence elements or agents might provide added value, and the platform is the result of this journey that we've just started.

And we will be having a presentation of the platform, of the digital academy. There is a great international interest for this. As Felice was saying, we're very happy about this product. We will be introducing the project and we will be providing you with every detail very soon because we are sure that this will provide added value on the nonregulated market. In Qatar, we have trained air traffic controllers a few years ago. We have done that into our academy in Forli. This is an center of excellence recognized all over the world, not only in Europe. So enlarging our offer, widening our offer in terms of training is for us a real plus in terms of increasing marginality for our group.

Okay. I'll switch back to English just to say thank you to all of the people connected to the webcast. Thank you, of course, to the people here, to the press, which is following. Thanks for the presentation to the management, CEO, CFO and the Director of Strategy. The IR team is obviously available to you for any follow-up you might need, questions. And again, thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]