Hera S.p.A. (HER) Earnings Call Transcript & Summary

Good afternoon, everybody. My name is Jens Hansen, Investor Relations at Hera. Welcome to the business plan presentation for Hera Group. And let me immediately give the floor to our Executive Chairman, Mr. Cristian Fabbri.

Thank you, Jens. Good afternoon, everybody. As usual, we'll begin our presentation with a forecast regarding our 2024 results, which we went over during our Board meeting and which also approved our business plan. As far as EBITDA is concerned, our estimates give us a forecast for 2024, which is above EUR 1.55 billion, a very positive result, we feel, also given where we started in 2023 with the best growth in our history, plus EUR 200 million compared to the previous year. And also considering the fact that within these results, we also included EUR 100 million, for the most part, linked to the super eco-bonus, which, as you know, expired in late 2023, and which, therefore, could not contribute to 2024. Now the results we looked over together on a quarter-by-quarter basis show that our organic growth was such, and it was able to completely offset the expiry of that contribution of the super eco-bonus, so much so in fact that, at the end of the year, we have a growth, which is over EUR 50 million more compared to the previous year. Therefore, we fully offset the lack of the super eco-bonus contribution. Now these results also exceed the expectations of the consensus regarding the forecast for our results. We also did very well from the financial standpoint. Our growth is up by 1.5%, and our financial results are in line with last year. They're below 2.6x in terms of the leverage, and they're also below expectations. Now where do these results stem from. Well, in fact, they prove our group's ability to be very efficient when it comes to execution. and therefore, these numbers also prove the soundness, the strength of the targets that we had given ourselves in the previous business plan. Now moving on to the contents of the business plan itself. We want to confirm our strategy. Last year's strategy was based on 3 pillars. The first is to create shared value. And you may remember that these 3 pillars are value creation with a focus on the profitability of our businesses and with a good financial flexibility. We also want to be sustainable. We want to create sustainable value, a value that can lead to economic benefits, but also positive results in terms of reaching the UN sustainability targets. We want to enhance resilience. That is one of the characteristics we have in a very broad sense. In other words, our business portfolio, and the way we manage each business, can allow us to have low impact from external macro events and therefore, that is certainly one of the main themes behind the development of this business plan. Now let's start focusing on some of the outputs of the business plan, and let's try to understand the way in which we've developed our strategic levers. Now you may remember the previous business plan had measured value creation by measuring the difference between the sector's WACC and the ROI spread, a 370 basis points. With this business plan, we expect to reach 400 basis points at the end of the business plan period, which means that we're improving compared to the previous business plan. And we have an average TSR over the period equal to 11% with a balanced growth stemming from the growth in earnings and also in terms of the average dividend per share yield, which, as we'll be seeing later, will improve as well. When it comes to sustainability, we focus our investments by identifying on 4 main areas, namely decarbonization, circular economy, resilience and innovation. And we have a very strong focus on everything, which brings value by being sustainable. Now 96% of our investments are in line with EU taxonomy. What that means is that we have seen an increase in our EBITDA, which also offers sustainability benefits, therefore, shared value goes from 62% to 66% in terms of its penetration in the business plan. Now moving on to the way we manage risk and the approach we have to managing risk. From this slide, you will notice that our approach is based on managing a multi-utility and multi-business portfolio, a portfolio we're continuing to develop in a balanced way, but it's also brought about by the way we manage each and every business, even the ones which aren't protected by tariff schemes vis-a-vis the macros with a very strong attention to external impacts. We're not seeing impacts from inflation, from interest rates, as you saw during the energy crisis, we don't see impacts stemming from the change in energy prices. As far as climate change is concerned, even in the territories we operate in, in recent years, we've had to deal with very significant climate events without ever stopping the service we offer to our customers and without ever damaging excessively our plans. When it comes to economic cyclicality, [indiscernible] due to the way in which we manage our business. And given the competitive advantage we have in our businesses, we see a very negligible impact on our businesses. As you know, we also operate in very fragmented markets, which are -- which is an opportunity rather than a risk for us because, as you know, over the years, we have consolidated plenty of companies in our growth process. When it comes to ESG and EU regulations, even here, it's more of an opportunity than a risk since we were one of the front runners in considering ESG as a business model, and we're now benefiting from that approach, which has very deep roots in our past. Now moving on more specifically to some figures regarding EBITDA, and let's begin by looking at some of its details. In this slide, we're referring to 2023 without the contribution of the super eco-bonus, which has expired. We're already offsetting that expiry difference. It's no longer part of our references. And what we see is a structural growth worth EUR 475 million, with a CAGR worth 7%. All of this is based on 2 main pillars, the traditional ones. Organic growth on the one hand, which is the activity that we generate most of our contribution from. And to that, of course, we have to add M&A, which contributes with roughly EUR 100 million. And this amount is, in fact, the average of what we're able to achieve over the 5-year period. That is the value we tend to include in our growth plan and therefore, in a very fragmented market, this is what we expect to achieve. Each and every week, of course, we look over plenty of files. Many are scrapped, some we focus on, and as you know, we conclude M&A transactions every year. Now by building this growth, we can, obviously, consider the opportunities from the market. And we can even choose to ignore the last resort market tenders, which, as you know, happen every year. In our business plan, we tend to include only the things which are visible. And since these last resort market tenders have happened every 2 years, we decided to ignore them for the time being. This is a conservative approach, of course. Certainly, we wouldn't be able to achieve the results we had in 2023. We had the energy crises back then, and we had many customers who have lost their suppliers, and therefore, we saw a very high growth in volumes and broader margins compared to what we had seen traditionally in that business, which brings us to a EUR 1.7 billion target at the end of the business plan period. And as far as EBIT is concerned, we're expecting a further growth. And we'll be seeing in a few slides that our target is to continue to increase the profitability of our business. And of course, when it comes to measuring ROI, our goal is to focus, while we go down the lines with a more intense growth, and we'll see that in a more intense way in the EBIT CAGR. We'll be seeing the major benefits we've been seeing, also including less provisions compared to the past, and that is also the result of energy prices, which are lower compared to the ones we've seen in recent years. And this, of course, allows us to have broader growth and broader strength, broader solidity as far as EBITDA is concerned. This year, we decided to add a slide because as you saw yesterday, we signed an agreement regarding an M&A transaction, a consolidation transaction in the multi-utility business. AIMAG is a miniature Hera basically. They are located on the border with the Modena province. And we went up from a 25% stake that we already had in the company to a 41% stake. Now the important thing to note is that in this phase, we are taking over the industrial management of the company. The meaning of this is that given the fact that we operate in neighboring territories and that we have the same business portfolio, we'll be able to obtain the maximum level of synergies with management control and with consolidation of the company. This isn't a form of growth that we paid for in cash. There was no cash out. This is a transaction that was agreed upon with an asset swap. We gave them 45% of a company we're setting up, a joint venture that we're setting up, that will include all the water assets in the Modena province. This transaction will allow us to obtain synergies, of course. We'll be able to rationalize the water network between the network managed by AIMAG and the network that we manage in the province, and therefore, there will be plenty of space to obtain synergies compared to the traditional ones we have in management and in cost-cutting activities. Now how do we evaluate the 2 companies? While the AIMAG evaluation was worth 7x multiple and the evaluation of the assets and the company, the joint venture we're setting up was made at 1.2x RAB since this is an entity that will deal with the water service exclusively. Let's have a look at the AIMAG numbers. Their 2023 EBITDA is worth some EUR 60 million, with a target in its stand-alone plan to 2028 worth EUR 77 million, which can be developed through the development of a portfolio, which is more regulated than ours, roughly 50% of their contribution comes from Networks, 20% from Waste and 30% from the Energy business, with a financial position at the end of 2023 worth EUR 210 million. Some of the parameters and industrial KPIs that can give you an idea. The RAB Networks is EUR 210 million. The Waste volumes managed are equal to 200,000 tonnes, and 230,000 customers are the ones managed by Sinergas, which is the AIMAG supply company. We do not include AIMAG's figures in the business plan. We have kept the EUR 100 million EBITDA target as far as M&A is concerned. Obviously, this transaction gives us a very good visibility upfront of our very positive M&A levels. Let's move on to the structured growth with the business by business breakdown. Our goal is to have a balanced portfolio. At the end of the business plan period, you'll see that all businesses contribute to EBITDA by 1/3. And the growth we're seeing in this business plan is also very balanced, both in terms of Network and Waste and Energy. The main driver -- the main growth drivers are very straightforward also in terms of their impact. When it comes to Networks, the RAB enhancement linked to the investment plan will be seen shortly is one of the drivers. Indeed, the WACC increase is another one of the drivers. And this growth, of course, refers to 2023 year-end figures with a major growth, which also gave us -- already gave us visibility in the upcoming years. As far as Waste is concerned, in this business, we want to expand our assets, our industrial assets. We are leaders, and we want to further strengthen our leadership. And at the same time, we also want to develop the market by leveraging on our competitive advantages. In Waste, we will continue looking at M&A opportunities besides what AIMAG already contributes to that growth. In Energy, we have a EUR 177 million growth based on 3 main axes. The first is recovering the shaping costs, which had added costs in 2023 by reducing the group's margins. And this recovery is an optimization of costs, which is something that we have already achieved in 2024. Then we also have a focus on commercial development and the full -- taking full advantage of our STG customers. But there are other also other things as we'll be seeing later. So we'll continue to grow the balanced portfolio, and that is one of the reasons behind our constant growth track record for the past 20 years. Now's let's move on to 4 slides that give us a flavor of our capital allocation strategy, investments. Why do we have 4 slides? Well, because when we want to define how much to invest and what to invest in, we worked by taking 3 main goals into account. The first target was to continue having a balanced growth in our business portfolio. The second target was to continue having profitability. And in fact, we wanted to increase the profitability of our business portfolio in an integrated way. The third reason was to continue adding a good level of financial flexibility so as to be able to take advantage of any possible market opportunities, both for organic growth and for M&A. We decided to have a net investment plan, which don't consider the contributions we've received externally from the recovery plan or from other institutions. And that accounts to EUR 4.6 billion. That also includes EUR 500 million contributions. And there's also a value that we have embedded in the figures that we're presenting to you because all of the initiatives that are financed by external contributions, whatever they are used on the free market, they offer a full contribution, whereas on the regulated market, they offer a contribution in terms of efficiency and operations. Now let's see the way in which these EUR 4.6 billion are going to be allocated in our investment plan. EUR 2.2 billion, less than 50%, will be focused on the maintenance of our infrastructure, whereas EUR 2.4 billion will be focused on development. And in order to maintain this portfolio balance, we allocated 60% of our development to the regulated business because 60% is roughly the amount of our invested capital, which refers to those businesses and therefore, more specifically, EUR 1.3 billion to Networks and then a part goes to the Waste collection service. The other significant portion of the CapEx is dedicated to the development of market businesses, and that includes the liberalized part of Waste and Energy. The next slide gives us a flavor of where our financial resources have come from and how they'll be allocated. It gives us an idea of how we'll be managing our portfolio mix. Now let's begin from the more general numbers. After having paid for the maintenance investments, we have an overall free cash flow for the 3 businesses worth EUR 3 billion. EUR 2.4 billion will be devoted to development and the remaining part will be financing most of the dividends we'll be distributing. As for the how do we manage the business policies? Well, in the Waste business, they lead to EUR 900 million in terms of free cash flow for the business plan period, EUR 700 million were allocated to development. But in reality, if we consider that this is where most of the M&A comes in, from the financial standpoint, we also have to consider the debt included stemming from M&A, which means that we reinvest 100% of the cash generated in our Waste. Energy. Energy is a capital-intensive business that generates a major part of our overall free cash flow, roughly 50% of it. But since it's a capital-intensive business, even when it comes to development, it has a lower investment requirement. Therefore, if we don't consider the development investments, we have EUR 1 billion, which we used mostly to speed up our growth in the Networks business. In fact, if we move on to Networks, we'll see how this business area will generate a EUR 700 million free cash flow. But to this area of business, we've allocated EUR 1.3 billion for development. Therefore, the fact that we have a multi-business integrated portfolio allows us to grow more quickly even in regulated businesses compared to the free cash flow that it would generate independently. And this, of course, as we'll be seeing, will lead to a 36% growth in RAB compared to the beginning of the business plan. Another one of our goals is to increase the profitability of our portfolio. You may remember that our strategic development access focuses on creating value, and therefore, from the industrial standpoint, measuring this value creation is linked to ROI and the spread with WACC. ROI moves from 8.7% to 9.5% with an 80 basis point growth. And it is supported both by the mix of the invested capital in niche business, but it also stems from the growth and profitability that we developed within the businesses, especially when it comes to Networks or Waste collection. We have a return -- a regulatory return, which is growing. And when it comes to waste treatment, we have a major growth in profitability, which is linked to the 2 policies that Orazio will be explaining, which refer to the growth of our asset portfolio and the growth of our commercial portfolio by leveraging on our characteristics and our competitive advantage in terms of the assets we have and in terms of our offers on the circular economy. Energy supply. Typically, it has a 20% profitability. It's decreasing slightly despite the fact that we did not consider the last reserve market share, and this reduction is also linked to a normalization effect in terms of margins, also vis-a-vis some of the elements that we were beginning with. The other important element is in this slide is that not only are we increasing ROI, but we're also including the net invested capital by EUR 2 billion from EUR 7.7 billion to EUR 9.7 billion, and therefore, the space to create value lies in the ROI difference and the fact that we added a further EUR 2 billion of invested capital to a 9.5% ROI. And with this last slide, we move on to our capital allocation choices, which show where we stand in terms of our leverage. At the end of the business plan, we'll stand at 2.8x, which gives us a further potential growth in terms of leverage we can use compared to our historic numbers. It's plus 0.5, which gives us the possibility of further growing to have a sizable financial flexibility, which we can then be used for any potential opportunities linked both to external growth with the goal of obviously having a growth that can be integrated with our businesses and which could lead to synergies in terms of costs and further development. And we also have to make sure that we're focused on our core businesses and the territories neighboring ours, or with a focus on organic growth elements because in this business plan, we have inserted projects that have already been authorized. And therefore, if further authorizations are received, we can look into them with our leverage. In a nutshell, we've seen our strategic paths. We've seen the evolution of our EBITDA and how we will choose to allocate our investments. And now we'll look at the effects on the bottom line. First of all, let's begin by EPS. Earnings per share have a 6% CAGR. They are -- they have improved compared to the ones in the previous business plan, which proves that the target we had of bringing the highest possible level of value to the bottom line and to improve it compared to the previous business plan is more than obvious from this slide. 2024 is a year that we are ending in a very positive way, both from the economic standpoint and from the financial standpoint. And along with an improvement of the earnings we'll be making in the next few years, made it very easy for us to offer a guidance to our Board of Directors as far as dividends are concerned. And we expect to increase our -- the dividend we'll be paying in June this year by 7% compared to what we offered in 2024. This is the growth that we apply to the entire years of the business plan. We've increased the floor all the way up to EUR 0.17 in 2028. With this drill-down approach, let's now go into the growth drivers, beginning with energy. We are now stably the third largest player on the Italian market. We have 4.7 million users, customers, and we have excellent feedback from our customers once we acquire them. Last year, we were awarded 7 largest, as you may remember, in the STG sector. Now the main asset in this sector is, of course, the evolution of our customer base. On the left-hand side of the slide here, you have an idea of our track record. We moved from 700,000 customers to 3.5 million customers in 2022. And we're now up to 4.7 million customers in September 2024, with an increase in customers, the effect of which was the increase of our market share. Now in a market in which a number of customers are stable, and the fact that we are especially large growth in our customer base, allowed us to move up from a 1% market share to 8%, and our position that we have consolidated our presence as the third player on the market. Now what were the competitive advantages and strategic levers that allowed us to achieve these levels? Well, the churn rate we have is lower compared to the market average. That was certainly one of the elements, which allowed us to increase our customer base and to achieve a major level of value creation because most of our commercial growth turns into a growth in customer base, not offsetting those customers who left us to move to other players. Now what are the recipes that allowed us to get here? Well, first of all, the multi-business management of customers. When it comes to Energy, of course, gas and electricity, but in territories in which we have all 4 businesses, we can offer them all 4 services. And this has an advantage for CRM and for billing. It's also an advantage for customers, and it gives us a competitive advantage. Now in our growth, we have always focused on a growth that could intensify our presence on local territories instead of achieving small market shares and a broader territory. And this has allowed us to be very efficient in our commercial development. But it's also allowed us to benefit from the local relationship we have and the local presence we have. And we intensify our efforts. We have a physical presence. We have physical shops. And we also have an approach to the local institutions, which allow us to be credited to operate in that territory. Now the choice we have made being very local, very locally oriented has to also be considered with the scale we've achieved, which allows us to be very competitive in terms of costs and very efficient in terms of the services we offer our customers and in terms of the CRM, we offer. We have a network made up of over 200 physical shops, and we also have digital shops. And customers have a very high perception when it comes to the quality of the service we offer. In fact, it's difficult to exceed what we already achieved. I've already mentioned that we have a strong local penetration. These are the main drivers, the main drivers that have allowed us to grow. Now the other element that we can see on this slide is our EBITDA story, the red line, you can see on the graph. The growth of EBITDA was mainly linked to the growth of our customer base. You'll see if there is a very strong correlation between the 2 curves on the graph. And this correlation is entirely independent from the price track. Our EBITDA moves with the customer increase and is not impacted by price fluctuation. Based on all this, based on our competitive advantage and the industrial relations we've set up, let's see what we have in mind for the business plan. On July 1, as I was saying, we added a further 1 million customers in STG. We went up from 3.8 million customers to 4.7 million customers overnight. That was the effect of the tender we were awarded, and it also means that the focus over the next few years as we're seeing at the business plan is a focus on managing this major growth. We want to replace those customers who will naturally choose another supplier during the STG market, but we also want to offset the last resort market, who will be looking for an adequate commercial development. Furthermore, in our 4.5 million customer target, we've also included the 200 customers that we'll be receiving midyear with the closure of the AIMAG transaction. Therefore, we'll continue to leverage on our competitive advantage so that we can consolidate our customer base over the next few years. Now let's see the effects of the strategy on margins. If you look at the EBITDA, the structural growth we saw earlier was worth EUR 177 million, and it allows us to more than offset the expiry of the last resort markets, which we did not include in the 2028 figures to be conservative. This is a growth, which is supported by 5 axes. One of the most significant contributions comes from the recovery in shaping costs. Therefore, in 2023, price fluctuation led to a growth in shaping costs and therefore, with the same price paid for the customers, our margins were reduced. Now this volatility has decreased, but what we did especially was we implemented a more risk adverse policy also in terms of shaping costs and therefore, even were a similar phenomenon to repeat itself, we would have a lower impact. And therefore, this part of our margin recovery is a major portion of the growth we want to achieve. We also have a part, which is linked to commercial activities. We have to be able to profit from our growth in STG. We have to be able to manage our commercial activities, which allow us to offset STG customers leaving us, which gives us another piece of our structural growth. Then we have value-added services. In 2022 and 2023, we had a strong growth in VASs, but that was a context in which the super eco-bonus made it easier to offer these services. Now that the super eco-bonus is expired, what we are left with is our customers' strong desire to decarbonize their consumption and to reduce energy costs by reducing consumption. And this leads us to all of the proposals, all the offers we have and that we want to further enhance for the business plan in all segments from the retail sector to major corporations, the condominiums and the public administration. And we want to work both on public lighting and on efficiency and building management. And as far as companies are concerned, we want to become a partner with them. We want to be the energy partner for these customers. We want to be the ones who manage energy in their production sites so that companies can focus on their core business, leaving it up to us to focus on our core business with long-term partnerships with them. When it comes to generation, we are continuing in our growth in renewables, especially in the photovoltaic sector. And we're doing this very carefully. We are focusing on origination, which means that we want to hold on to the entire value of the value chain. And we also want to continue improving the relations with our customers. We want to work on consumption centers. We want to make sure that this production is offered to our proximity customers, so that we can protect them from price volatility when you are exposed to market prices, especially in a [ future ], in which will have an increasing amount of renewables, and therefore, the hours in which these prices are set, lower levels can be larger and with the more negative impact. And therefore, we want to stabilize the profitability of this activity. In a nutshell, therefore, this growth is supported by different levers, which can give us a significant contribution and which show that, compared to 2023, we've had an increase in our customer base by 700,000, which is one of the drivers, which contributes to our organic development. Last year, during our business plan presentation, we had announced that we had acquired 1 million customers. We had explained the model to you. And now let me just tell you where we stand one year down the line and after 6 months in which we've been managing this portfolio. You may remember that we had chosen to acquire these customers by offering tariff discounts, which will lead to a monthly cost to serve without any upfront payments. Typically, you pay your commercial structures an M&A. You pay upfront when you buy a company or their customers. In this case, we want to leave part of our margin to the customers with the awareness that beginning in -- on the 1st of April 2027, all these customers would automatically move to free-market offers with new services and new activities and with margin levels that would be consistent with these new offers. And our evaluation of the stage was that this was going to be an investment. It would be consistent with our sector's ROI. And these were the bidding hypotheses we made. What we discovered over these first 6 months is that things are even better than expected. Because what we're seeing is that the customers are much more loyal than we thought they would be. As the relationship we've set up with these customers over the past 6 months is one, which leads them to being very satisfied with our service, with excellent quality, with no problems in terms of receiving their billings, in terms of CRM. We checked with them to verify their data, and therefore in just a matter of months, the awareness in our new customer base is better than we expected. And these customers are better payers than what we expected. And even in terms of their interest vis-a-vis different offers or new services, we're seeing that the returns are much better than expected. And even the slight rebound in energy prices we're seeing today leads to many of these customers to ask for fixed price rates or a mix of fixed and variable prices to protect themselves. So things are better than what we were forecasting and what we had embedded in our bidding forecast. Let me give the floor to Orazio who will be giving us an update on waste and networks.

Thank you, Cristian, and good afternoon. Let me begin with our certainties. The business plan was drafted by building on the certainties we have. When it comes to waste, we are the Italian market leaders, we have a very large and diversified number of plants allows us to deal with any kind of customer with any kind of waste. What this means is that we have a very strong presence on the market, and we are capable of solving any problem our customers may have. And I said, we don't wait for them to come to our door. We go out and search for them. This is a very strong commercial appeal we have. It has supported us over the years, and they will continue supporting our growth in the future. It's something which gives us plenty of room to further operate on the market. Secondly, you surely remember that the Italian market is an interesting market. It's a closed market. It's marked by undercapacity when it comes to waste repack, especially in terms of the low number of waste energies, but even landfills, which are needed to close the loop. Therefore, the assets we have and our commercial abilities when it comes to customers, and our ability to relate to international partners because we always have to remember that this is a competitive market. All of this makes us very attractive, competitively and it gives us an advantage. And thanks to our competitive advantage, we were also able to develop our leadership when it comes to plastic recycling, which is another sector we are leaders in. We offer the top of the line products. We are leaders in recovering. This is a market which is constantly expanding. As we're seeing from the mega trends, which are supported by international regulatory framework, which continues to evolve towards a market characterized by recovery, and by recycling. In January this year, the single use plastic directive came into force and that requires having 25% recycled plastic and beverage packaging beginning in 2025. Another thing I'd like to mention is that we operate in a fragmented market. We are the market leaders. There are plenty of other smaller players, which means that step-by-step we can acquire new companies, which gives us plenty of room to further expand. These are our foundations, therefore. And if we move on to the following page, what we're seeing is that we have a plan with a very visible targets with an EBITDA growth worth of 7%, which is supported by a further increase in our market share, the volumes treated grow at a 5% rate, which means that we are expanding our market share. You'll notice that volumes are up, will be going up 5%, CAGR will be going up 7%, and our development is supported by other actions as well. These include efficiency, services, the global waste management approach we have which is linked to an increasing demand for circular economy models. Now this structural growth allows us to offset the nonrecurring opportunities we assume 2023, opportunities which were linked to the energy crisis in which we were easily able to reabsorb during the business plan years without ever interrupting the growth in our profitability. Now all of this growth and profitability is supported by a major amount of development CapEx, EUR 700 million, and it's a way of reinvesting all of the financial resources we generated. As you heard from the Chairman, we are using all of the financial resources generated in the waste business and we're reinvesting them back into the business. This is a way of financing both our organic growth and our external growth. But that's not it, we also want to grow through partnerships. These are partnerships that we described as being resilient because they are not exposed to market fluctuations. Sometime ago, we had mentioned the partnership we had with Fincantieri. We signed a deal a few days ago. We set up a NewCo, which will be led by Hera. And this 2 will allow us to manage ways in a sustainable way. And we truly are the only ones who can offer this kind of a service because not only do we manage urban waste, but we also manage the industrial waste. Let's move on to the focus of this business on the following page. All of this, of course, supported by a very strong competitive advantage. As you can see, we have a very broad market and what we can serve, as you can see from the graph on the left-hand side, we have a 10% market share with plenty of room to grow. And we can grow through a number of different approaches. We can certainly make or build our plans, but we could also take over companies through M&A since the market is very fragmented. There are over 200 small companies operating in the market. And this approach is the same one we've had over the years. And our track record proves that we can achieve this kind of growth and we'll continue doing so. Second item is a recovery recycling. We've tried something a little different here. We compete with major players, but we have a competitive advantage given our ability to offer very diversified solutions, which means that very strong market share, roughly 20%. But again, there's plenty of room to grow. We have a competitive advantage and plenty of uncharted territory that we can explore, including rigid plastics or low-density PE food. And more recently, we also started operating in carbon fiber regeneration. And we began focusing on this market niche very recently, and it's certainly something that we want to continue to expand. All this is possible because when it comes to this expansion, we are guaranteed by European regulation, which requires 25% of recycled PET and beverage containers beginning this year, 25% whereas the previous figure was 11%. And of course, from this point of view, we want to be the front runners as far as these mega trends are concerned. We've invested, and we will continue to invest. And on the slide here you can see some of our plants. We have the Nevada plant, for example, where we'll be doubling our size. The third topic is refers to another great experience we've had the ACR company, which we made the acquisition of in 2023, which is doing wonderfully well. This transaction allowed us to add another offer to our business portfolio. We have more than 10% market share here with a huge upside here. We have mapped over 13,000 sites, which have to be remedied in Italy and plenty of a national recovery fund, resources have been allocated. So this is a very interesting and swift market and these activities will have to be completed by 2027. And I also wish to mention the resilient partnerships that we have already signed. You can see some of them here on the screen. We have Eni Rewind, Greenthesis and Edison. These are resilient partnerships because they aren't subject to market fluctuation. And with these partnerships, we'll be looking at remediation and treatment. And as we mentioned at the Fincantieri partnership, let me just say that this is a screen we want to continue expanding because there is a major level of value that we can achieve. Therefore, we want to continue focusing on oil and gas along with other markets such as agri food, home care and pharmaceuticals. With these competitive advantages in mind with a fragmented an attractive market. Our strategy is clear, we want to expand our market share. That's why we will support this growth by reinvesting all of our cash flow almost EUR 1 billion in M&A and with the organic development of our plans by creating value with an attractive return on the invested capital, which is equal to 14% in the unregulated businesses. Let's move on to networks now. Even here, let me give you an idea of what our idea is. We're a major industrial player with a robust investment plan. We are very healthy when it comes to our infrastructure. And as far as quality goes, we are the market leaders, especially when it comes to water quality. We have certified as being the water market leaders as certified by the national authority last year. We have developed new technologies that can allow us to increase our ability to extract efficiencies. We have a very solid and high-quality infrastructure. And therefore, our business plan is focusing on a major development of our infrastructure. We want to continue developing. We want to go up to EUR 4.5 billion RAB in 2028 with a very solid CapEx plan. And this development plan will allow us to improve our investments in infrastructure making them more sustainable with more resilient infrastructure. They can deal with all the transitions we face, beginning with the energy transition. This will also lead to greater economic efficiency. And in Italy, we have a reliable regulator with a very good track record, which means that this business is very protected. And I'd like to remind you of the fact that the national authority reviewed the WACC increasing at 2023. And therefore, this is a business which is protected from all economic macros and from climate change. We are resilient. We have proven to be resilient as the Chairman was saying earlier, even during the most recent extreme weather events. What are our targets? Moving on to the following slide. What margins are we looking at? Margins are increasing very much with plus EUR 155 million, bringing us up to EUR 621 million with a 6% CAGR. This is a growth supported not just by a major growth of CapEx with EUR 1.3 billion in development CapEx, but it's also supported by the authorities WACC review, which is up compared to 2023. We have set some very visible targets all of the businesses will contribute to the organic growth of margins, as you can see on the chart on the left-hand side, this growth will be supported by a major amount of CapEx, which are entirely recognized in the RAB without any caps as far as tariffs are concerned. So we can then increase the margins of this business. And to all that, we also have mentioned external growth because this year, as Cristian was saying, thanks to the AIMAG agreement, we already have a very high visibility. 50% of their business is in Networks and therefore, within that agreement, we will enrich our presence of the business. And on the right-hand side of the page, you already have a figure which refers to how much AIMAG is worth. So besides the growth in WACC, we also have efficiency, which will be improving our results. We have a track record, which supports that. We will improve the reduction of water leakages, there we'll be improving the way we treat. Polluted water. We want to continue to prepare our networks to deal with hydrogen blends. We want to make sure that our networks will be able to use green gases and we'll be seeing some very positive news shortly as far as we're concerned. The highlight here is efficiency, of course. We are always able to outperform the regulatory standards as proven by our track record as we've seen in recent years. Let me conclude by a focus regarding the evolution of RAB for each business. We have a growth not just in terms of investments, but also given the AIMAG contribution with EUR 240 million. Therefore, the RAB we own will be worth EUR 4.5 billion at the end of the business plan period, moving up from the RAB 3.3 billion we had in 2023. Most of the RAB growth will happen at the water service with an EUR 800 million growth, up from RAB 1.8 billion to RAB 2.6 billion. This RAB is up due to the effect of the WACC, which in 2024 and 2025 will be equal to 6.1%, whereas for the remaining business plan, years, we have expected 40 bps less. And therefore, conservatively, in water, we're already seeing a -- we've already considered a reduction which we already still hasn't decided on. Therefore, we're simply dealing with the hypothesis that water will have the same effects we've seen in energy. In gas, we went up from RAB 1.1 billion to RAB 1.4 billion. RAB 1.4 billion is what we expect to achieve in 2028. This RAB resilient to 6.5% WACC in 2024 and 2025 and 5.9% in the remaining business plan years. As a consequence of the Hera review. Let me conclude the mission electricity. But here, we expect to have a slight EUR 300 million growth over EUR 100 million from EUR 400 million to EUR 0.5 billion in 2028. This RAB is reiterated 6% to 2024 and 5.6% for the remaining years of the business plan. So let me just conclude saying that this is the safe in our business portfolio. As you know, our networks are fully regulated and they contribute very much for growth in this business plan, giving a major level of visibility to all of the growth drivers. Also including the part relating to M&A. Thank you very much. And let me give the floor over to our Chairman.

Thank you. We've reached the end of our presentation. Let me just conclude with a couple of remarks before I give you the floor. We began with our forecast, which shows the good position we're in both in terms of our economic growth. And in terms of the low financial level, we also mentioned the news regarding AIMAG which we had already explained in the first few pages of the presentation. That transaction gives us good visibility of regarding the M&A contribution, and it's a contribution, of course, which will not stop with AIMAG. We also mentioned that our value creation strategy can be summed up with a 11% average CSR. And we also showed the good performance we had in 2024 and the growth of our business plan targets which will allow us to increase our dividend policy with an immediate effect and with a growth which will continue throughout the business plan until we can reach $0.17 per share in 2028. Keep in mind this a floor. This is a guarantee when it comes to dividends. And we still have good financial flexibility, which is, of course, something that can allow us to look into further opportunities. Thank you and let me open up the floor for any questions you may have. I tried to keep it short to leave you as much time as possible for some Q&A. I know that you were tired following the [indiscernible] presentation yesterday. Over to you.

Our first question is by Emanuele Oggioni, Kepler Cheuvreux.

I have a few questions for you. There seems to be a slight echo. Let me begin with a question on the business plan and on the 400 basis points growth and value creation, which is up compared to the previous business plan. We know that there's a lower return in regulated activities. And from one of the slides, I seem to understand that the main driver as waste, especially nonregulated waste. So we have waste treatment with a return on invested capital, which goes up from 10% in 2023 to almost 14% in 2028. I imagine that's the main driver, but I'd like to understand what pushed you to improve the value creation target and what drivers, what projects are the ones with the most value compared to a year ago compared to the previous business plans. My second question is on Slide 16. The growth of EBITDA you expect or the STG service, can you explain what the churn rate you're expecting also compared to the numbers last year, which was about 50%. So it was a pretty high level. And I'm assuming that figure is lower now, what are the growth drivers for EBITDA in that business. And one final question refers to the more recent news of the business plan. I'm referring to the earlier decision regarding vulnerable customers moving to the STG service by June 30, 2025, which would also force Hera to take as part of customers which they do not want and which are profitable. Can you oppose a decision legally. And what are the numbers of customers we're looking at based on the lots and based on the cities that you manage, and I'll leave it at that for the time being.

Let me begin with your last question. The decision you're referring to is based on the government provision, allowing certain customers to go into the STG market. Let me begin by giving you an idea of the size of the entity we're dealing with. When last year, we have the area, we had to hurry up to promote moving onto the STG market in the first 6 months following the tender and actually moving to that market over that period, the effects were most invisible. So this is a very low impact on the market. So that's the first thing I want to mention. Of course, from another point of view, those who do move customers who are especially knowledgeable and where we would have a couple of thousand customers more than we already have. We don't expect any changes, in fact, we're not sorry about that. They would lower period in the STG market with a lower investment, and they were going to move to the pre-market for the same amount of time. So I don't see any major problems from that point of view. It would simply be a 1-year difference. They would reduce by 40% the investment we would have to make to take that customer over. So in terms of size, in terms of FX, we're not especially concerned. Of course, we'll be answering following their consultation request, and we'll see whether or not something will be needed. But again, we're not concerned in terms of size, in terms of entity, and we're looking at customers that will require a lower investment level. So we feel that may even end up being interesting. Your question regarding Slide 16. The STG market contribution. Slide 16, now that the column also includes commercial development dynamics. Now consider that the STG tariff is guaranteed up to April or March 31, 2027. From then on customers would automatically move to free-market offers that we have already set up, in a context in which that kind of market would no longer exist. So for those customers who will still be there and who will not have moved to other suppliers or who will not yet have accepted a free market offer you would see that what we're already seeing is that the customers, given the increase in prices are already choosing fixed price tariffs because the volatility market is -- the other market is something they're already concerned with. So they're already choosing some of these offers. And given the current volatility level, we also have offers that have a part of tariff, which is fixed in part, which is variable. It was a hybrid solution from risk. So that's one part of the effect. The other part of the effect is linked to the fact that we'll be seeing certain degrees of market dynamics, therefore we'll be replacing some customers who will have left us due to the churn rate. Others will have acquired from the market. So all in all, all of this leads to be the growth driver, I think churn is lower. But since we're managing those customers, those figures are sensitive. So let me just say that would look better than expected. Moving on to your question on WACC or on value creation. Let's move to Page 12, which is the page on ROI compared to the previous -- now compared to the current business plan the growth of WACC here happens both on the Networks business and in the Waste business because we're considering 2023. So if your question is the difference between 2023 and 2028. Obviously, we're seeing an increase in these contributions, which are linked for the most part to Networks to Waste and to Waste treatment. Compared to 2023 when it comes to Energy, we did not make the adjustments compared to the last resort market. So we don't have any contribution to 2028, whereas in 2023, we had part of that contribution and therefore the decrease you're seeing is linked to that. But of course, the largest part of the growth is linked to the growth drivers on margins that [indiscernible] mentioning earlier, which allow us to move from 10.3% to 13.7%. And that's just an algebra at the business mix. The important thing to note here is that our businesses are solid, they're very concrete. And we have a number of initiatives which may be even small. Therefore, there is no single major risk we're facing. Nothing that could undermine our targets because we have a very broad business portfolio. And what we've always seen over the years is that we tend to be either in line or above our expectations. So as far as our performance dynamics are concerned, they're very solid. It's a very solid foundation that we'll be building on.

The next question is by Javier Suarez, Mediobanca.

I also have a few questions for you. My first question refers to a concept. This is a business plan in which you no longer consider the last resort tenders, you've eliminated them. But I'm sure the company doesn't really mean that there are no opportunities in that sector. So what are the implications behind this different growth model because they will have some implications for our EBITDA, even when it comes to provisioning policy and financial expenses, it will have to be lower -- lower leverage and lower factoring. So I'd like to understand from you how can this new business model speed up the growth at the bottom line. And even a later foundation for multiple expansion because it's the EBITDA multiple if the underlying EBITDA multiple is more stable compared to the last resort tenders contribution that could lead to a multiple expansion or an EPS enhancement if I'm not mistaken. The second thing I'm very interested in is a follow-on to the previous question. the STG market, Slide 17. I understand that this is sensitive topic. And let's see what you can share with us. But I'd like to understand what is the negative contribution of these new customers in 2025 and 2026, and what may be the positive contribution beginning the 1st of April 2027. Just some rough numbers maybe. And out of this 1 million customers, how many do you think you'll be able to retain. In the Slide 15, there seems to be a fairly large number of customers who will be leaving you or who you'll be getting go. Second question is a more structural question regarding the company. Your leverage you say is below your optimal level. Your threshold is 3.3x. And I was wondering how do you expect to view this further financial possibilities. I saw your evaluation criteria when it comes to M&A. And M&A, I heard you, do you think you'll be focusing on waste management treatment on your assets? Would you also see opportunities in other sectors. We saw fee provisions in the budget law for 2025 regarding electricity concessions. Do you think in the future, the company will move more towards a 3x leverage for M&A for other opportunities? Is that also we are reducing the cost of capital and to improve returns? And my very last question refers to the annex in your presentation. Your financial targets by division, waste, electricity, gas and water. Basically, the growth of water and waste stands at 6% to 7% of EBITDA. Electricity is higher, gas is lower. I assume this is connected with the expiry of the last -- over the major [indiscernible] customers progress is much weaker compared to the end of 2024. Thank you.

I have started answering with my mic turned off. So let me start over. Let me look at your questions. Now just to be cautious on the last resort market, we sterilized the contribution because those refer to 2 tenders, which happen every 2 years. So currently, we have visibility for the next 2 years up to September for gas because in September, we'll have the tender for the upcoming 2 years. Now in the business plan, we scrap the contribution and that's something we already did last year. Of course, we make a bid in these tenders because that's a profitable market. And obviously, by removing that, we remove a part of the profitability. Then when it comes to the structure of our businesses, of course, this does have an impact line by line. It reduces provisions. It partly reduces our financial burden that refers to a line-by-line approach. Then what we do is we obviously offset that with businesses that grow. That doesn't mean that we will no longer be making a bid of the tenders. But our approach will be the one we've always had. If these tenders will be an opportunity, we'll try to win them so we can take advantage of that opportunity. But it's not something that we can guarantee. That's why we don't include those figures on the business plan. I'm not sure I understood your question regarding the multiples. If you could please repeat that. I was taking notes on your first question, I missed a part of it. Your second question, your second question, can you repeat that?

The second question refers to Slide 17.

The question on STG. Well, we're looking at some details and some figures. These are sensitive information. So when it comes to number dynamics, I'm not going to go into commercial dynamics, commercial trends because compared to last year, where we were expecting a loss of 0.5 million customers as Emanuele was mentioning, now we're looking at a smaller number. I don't want to give you the exact figure. As far as the impact on margins is concerned, of course, the margin dimension will be having at the end of the period is consistent with what we have with our other customers because our offers are similar. Again, I don't want to be too specific, but I think that consistency is important. And the negative impact we have is linked to the average discount per customers that you are familiar with, it's roughly EUR 70. And as you've already seen in 2024, we recovered that in our numbers, and it's something we'll continue to do in 2025 and 2026. So the growth we have on our organic portfolio is something we're investing in the future growth will be obtaining. Of course, as you know, this 1 million customers we obtained, a part of whom will stay on with us had no acquisition costs. So we did not include the acquisition cost of that portfolio, and we offer a few euros per month to these customers to get them to stay with us and that contributes to customer loyalty. And of course, on April 1, those customers will have to choose whether or not they want to stay on with a supplier that they like, and we'll be giving some tailor-made offers to our customers, very specific offers for these customers, taking their history, their characteristics and their consumption models into account. They'll be very focused so they can choose to stay on with us or they can move on to another supplier in the market. they make that choice every day. April 1, that will be automatic. So we're very confident when it comes to that instance. I was saying earlier, these first 6 months during which we've managed these customers have allowed us to get to know the customer base very well. And we are able to amend our targets to improve them. As far as the leverage is concerned, well, we expanded it to our maximum levels in very specific periods. For example, when we had the Ascopiave transaction, we reached 3.3x net debt to EBITDA. The same happened during the energy crisis, 3.3x. And it's a level we can reach. Then of course, we have to reduce it. But the cash flow brought about by the transactions will help us, which is what -- exactly what happened with Ascopiave and with the energy crisis. So we do have some flexibility there. And how we'll be investing that money is by applying the rules we've always had. We want to focus on transactions that can be value creative. And if we want to create value, we need to be able to pay the right amount of money, and we have to be able to obtain synergies. The businesses we operate in are 3 macro areas basically. We have the multi-utility approach like AIMAG. In that case, it's a company with a portfolio similar to ours. And then we have the 2 liberalized businesses we look to, which are [ waste ] and energy. And as far as these 2 businesses are concerned, we have always focused on M&A. These are the areas that we're also growing in commercially and in terms of our asset base, then even more specific, we can look to broaden our current businesses or we can enter new market segments, which is what we did for Aliplast and ACR with new products or even when it comes to EstEnergy. We enter new market segments in terms of new territories, new parts of the country. But again, our ultimate goal is to create value through the synergies we can obtain through cost efficiency through development efficiency. So that's the criteria we use when we allocate our money.

And then you had a final question on Pages 27 to 30 in the annex. Can you explain to us why is the growth in gas so low compared to electricity?

Well, the reason why that is, is that we no longer have the contribution. It's not adjusted. Therefore, we don't have the contribution that we started with for [ SEB ]. If we were to remove that and adjust the figures to 2023, obviously, the number would be different, and we would have a stronger growth. It's EUR 100 million roughly, and then we also have the topic of the last resort market, which on the energy side of things is offset by the growth of the free market. When it comes to gas, we don't have an increase in our customers. If that makes organic growth capable of offsetting these 2 extraordinary events. If that's what I wanted to underline. The organic growth and the commercial activity is more focused on the electricity basis. Is that right? It is right. It's part of what we were seeing since our growth is linked to the number of customers. The major growth we've had there is the -- is in the energy customers, and therefore, growth is more focused on energy and electricity. There's another type of activity we're focusing on. What I mean by that is that by making the acquisition of these energy customers for the very first time, we have changed the size of the portfolio, basically. Until June, we were more focused on gas customers, whereas as of July 1, we have more electricity customers, 2.4 million compared to 2.1 million gas customers at the end of the business plan. And if you remember, when we started, we have 700,000 customers and only 30,000 were electricity customers.

The next question is Francesco Sala, Banca Akros.

And thank you for your presentation. And thank you for giving us an opportunity for some Q&A. I have 3 questions. The first is on Slide 20, which shows the evolution of water -- the water RAB, EUR 240 million contribution from AIMAG. Is that included in the M&A you had already included in your business plan targets. So is the evolution of the water RAB especially influenced by the M&A you have included in the business plan targets? My second question of the net working capital. There are some EUR 200 million in cash effects during the business plan period, how is this going to be modulated over the business plan period? Can we divide by that number by the number of years? Will there be any acceleration or decelerations at the beginning or at the end of the business plan? The third question is on the supply business. Your targets show where you're headed, but what are the margin evolution, especially in the electricity in 2025 and 2026? Also given the graph you showed us regarding the costs of the Maggior Tutela market?

Let me begin with the working capital question, Page 1. It's not just working capital, it also includes some other effects. And it's something we see very linearly, very generally during the -- throughout the business plan. Some things and some diversified effects, but they don't have any specific elements during the business plan. As far as the supply business is concerned. If we don't consider the effects of the last resort market, margins are stable, and they are growing compared to 2023, minus the extraordinary effects on the organic side of things, there are no -- there isn't anything special, except for larger growth levels, which will be happening after April 1, 2027. I hope that's clear. As Javier was saying earlier, the only issue there would be that the last resort markets are quite sizable. So if we remove the effects of condominiums in these markets, the underlying market is quite linear, as I was saying earlier through organic development, of the normal market, basically, we are offsetting the lower margins, we'll be getting from the STG market. A significant part of the margins we're seeing, one linked to shaping costs is already up and running. Already in 2024, we were able to recover a sizable part of that benefit. Your other question was on RAB. I'm not sure I understood correctly. Did you, Orazio?

Well, if I understood correctly, your question refers to Page 20, referring to RAB dynamics. And you were asking if the water RAB already includes the AIMAG RAB. So we're looking at the slide on Page 21. The EUR 2.6 billion RAB, you see on the left-hand side also includes the AIMAG RAB, which is worth roughly slightly more than EUR 150 million. Thank you.

Next question is by Davide Candela, Banca Intesa Sanpaolo.

I have 3 questions. The first is on the gas market context we're seeing currently. With higher prices compared to what we saw last year and volume demand, especially in retail, which is stable. What are your initiatives? Are they extraordinary compared to last year or compared to the last 18 months as a way of dealing with any possible criticalities? Then along this line and regarding the retail world, can you give us an idea of the volume dynamics for gas and power on a like-for-like basis? Do you expect a stable gas demand and an increase in power demand? Or are there different dynamics? Then I have another question on energy supply. From what I know, you have won some last resort markets in the electricity market is this contribution that you'll be seeing in 2025? We know the gas will expire in September. Another question on energy supply, more on M&A on your approach to M&A. And back to you bid on Ascopiave customers, compared to the has your approach changed? Is it more risky to bid on certain customers and certain prices, considering the fact that they could move to another supplier? But compared to the past since you've achieved a different scale. Are you focusing more on organic growth rather than external opportunities, not considering AIMAG.

Well, the market context, we're looking at prices were stand at EUR 0.50. Nothing we should be too concerned about. We had to be worried when the prices were EUR 350 per megawatt hour in August 2022. That was worrisome since it had an effect on the energy sector. The market structure has changed. In the past, we had a most of European procurement arrived through pipelines with prices that were very well defined with well-defined structures, whereas currently, supplies come in with LNG. And that implies a higher price volatility. In the past, you have the American and the European and the Asian markets, which were decoupled with significant price differences. That's because there was no correlation. There was no oil presence of LNG. Now all that has changed. That amount has increased, and therefore, that leads to higher volatility. But still, the volatility levels we're seeing are worth a few euros per megawatt hour over the weeks. So it's still fairly normal. As far as prices are concerned, last year's winter was warm, very warm in fact. And therefore, we were able to have some extra levels of gas in our storage facilities. The market concerned by the fact that the storage facilities would have stay full at the end of the thermal season. Therefore going forward, the market was already looking to reduce the spot prices. Currently, supplies are being used a little bit more. In Italy, we currently spend at 56% capacity compared to 51% last year. In Europe, the capacity of the supply of the storage facilities have been reduced. It's a little bit more visible. It's nothing to be concerned with. But given a high degree of offer of supply, the price levels have a changed. Yes, that's something visible compared to last year. What happens on volumes was that customers are consuming slightly more because this year's winter is slightly colder compared to last year. And over the past 2 winters, the fact that we had, had very warm winters was an advantage. As far as the energy crisis was concerned, but again, there were 2 extraordinarily warm years. As far as the business plan is concerned, our forecast above and beyond the change in volumes in terms of mix. We operate in different segments and therefore, our positioning on the various segments can change volume dynamics. And even leaving the last resort market is something that we have included in the figures, which imply a reduction in volumes compared to current figures. But if we look at things on a segment-by-segment basis, is, for example, what we've done is we've envisaged the contraction in gas volumes also linked to climate effects with mild temperatures during the winter, so we're expecting a reduction there. But at the same time, we haven't included any visible effects when it comes to our electricity customers, especially the retail customers. So those are the dynamics for individual customers. As far as the last resort markets are concerned, yes, we said that we didn't include the effects of future tenders, although, of course, we have included the effects of those tenders that we expect to be awarded, the tenders that we have been awarded. So 2 years for the electricity tenders and all the way up to September for gas. As far as the Ascopiave customers are concerned and past M&A transactions, well, at the time, we evaluated those customers, and our assessment was based on some various business plan hypotheses. And despite COVID, despite the energy crisis, we are overperforming our hypothesis at the time. As far as the future is concerned, or any other initiatives basically, every deal has its own specificities, every customer base is specific characteristics in terms of churn rate in terms of customer loyalty, in terms of reliability, in terms of -- when it comes to AIMAG, we have had a stake in the company for the past 15 years now. We are in a same part of the country. And therefore, their customers are similar to ours, and we're very familiar with the dynamics they have. And I think that answers all your questions.

There are no other questions apparently. Thank you very much. Thank you very much for your time. Of course our Investor Relations office and Jens are available for any further questions you may have. And have a wonderful evening and all the very best. In fact, we do have a follow-up question from Emanuele Oggioni, Kepler Cheuvreux. I couldn't hear you, so I thought there were no further questions.

Yes, apologies, if I may. I have a couple of other questions for you. Very quick questions. One question refers to AIMAG. In the business plan, you included the -- your expectations without synergies but based on your track record and extracting synergies. Since they operate in your traditional territory, we expect EUR 100 million in EBITDA by 2028. So that's the first question. And the second question as a follow-up on acquisitions. And any interest you may have in buying customers [indiscernible] 1 million customers are on sale, 70% on gas and 30% on electricity. There are other portfolios, which are for sale, which you must have already assessed. So without mentioning any names, are you still interested in making the acquisition of individual portfolios and not just entire multiutilities as we saw for AIMAG. And if I may, 1 final question on waste. You were mentioning that you expect a 5% increase in volumes. But I imagine that growth refers to your organic growth expectations or may that also stem from so many possible acquisitions. But my question is, what is the underlying trend for your market? What kind of trends do you expect for volumes and prices in your traditional markets for waste with the same treatment capacity, with the same waste management capacity.

So let me begin with the synergies and AIMAG, best possible conditions to extract synergies, as I said, and we are familiar with them. But of course, the best assessments will be conducted after the closing will be going into the specifics regarding each individual business. Traditionally, our synergy level is around 30% of a target company. It's fairly easy to do the math. So that's some EUR 20 million EUR 77 million plus EUR 20 million is fairly close to that number. As I also mentioned earlier, when I talked about this transaction, the plan was developed with a generic M&A target because the transaction was moving on in a parallel way, we'll be doing the -- we'll be closing the deal before the summer, and then we'll be consolidating the figures line by line, and therefore, we'll be more specific on each individual business. As far as extracting synergies from M&A, I answered that question earlier when Javier asked, the supply business is a business we operate in. With the approach I was mentioning earlier, our target is to add value through growth in segments and businesses that we're already in. In that segment, we made the acquisition of companies, which weren't very large in recent years, but they did give us a boost in terms of value-added services. So we're talking about companies offering services of installing PV panels. And we integrated the value chain. In the past, we used to use contractors but our firepower and our size, our scale made us integrate the value chain. In other instances, we bought customer portfolio. So basically, we evaluate things based on what the market has to offer. Then of course, there's plenty of gossip, plenty of information. As you know, we only share news with you once the deal is done. So for the time being, we'll just say that anything out there is gossip. We have nothing else to add compared to what you already read about in the press. And I'll leave the question on waste to Orazio.

Yes. Thank you. Cristian. Thank you, Emanuele. As far as waste is concerned, our growth is based on 3 things. We want to increase our market share. We want to focus on commercial development, and we want to look at the numbers regarding volumes. And if we can go to the slide on waste, well, we certainly have a market share, which is on the rise in terms of volumes. Our commercial development allows us to go from 5 million tonnes to 6.5 million tonnes of commercial waste. These are the macro figures, basically. And as you can see from the slide here, we have a 5% volumes CAGR. And if you want to break this figure down, the part which moves quicker is, of course, the industry market, and that market CAGR is even higher. And that's what makes us different compared to other utilities who operate in the waste business. We are capable of referring to this important market segment. As I was saying earlier, we have the ability to offer diversified services, plus we have a huge asset base, a diversified asset base, thanks to which we can treat any kind of waste and any -- we can deal with any kind of customer. Obviously, we are continuing to invest. We are continuing to develop our assets by reinvesting all of our resources, as we said earlier. Therefore, the more we operate, the more we are able to extract value from this development of ours and all of the investments that we embedded in the business plan are linked to several initiatives. It's not a single initiative we're working on. As Cristian was saying earlier, we're working on very many different projects on the fourth line in Padua [indiscernible] which is the waste energy for hazardous waste. There are very few in Italy, and we have one of them, and they will be up and running this year. We also concluded some M&A transactions. So that's the third access. M&A. For example, last year, we made the acquisition of TRS, a company allowing us to cover the northwestern part of the country, near to Milan. It's a very industrialized part of the country. And it will be fully operational this year. And that platform will be developed, allowing us to fully exploit our potential in that geographical area, which is very important commercially. It allows us to cover a significant portion of Northern Italy. And then we have plenty of other projects that we'll be talking about in the future because as Cristian was saying, although we still haven't announced those operations yet, we have plenty of things in the pipeline. We only make announcements once the deal was done, as he were saying. So rest assured that there are plenty of opportunities to be seized. You also referred to prices. You asked us for an outlook, if I remember correctly. And prices, as far as prices are concerned, they are stable and high. Prices for 2025 are like the ones we had in 2024, we're not seeing a decline because as we said earlier, as you know, the market is very short, which means that our outlook is stable. And then recently, the international logistics costs have gone up slightly because activities have gone up in terms of prices, employee costs have gone up. We also have a carbon tax on transports in Europe. And therefore, we don't expect prices to drop, plus, thanks to our diversified portfolio, and thanks to our asset base, we're able to take advantage of the opportunities in the European market, which have a positive impact also on the treatment prices for Hera Group. Thanks for the details. Thank you.

Well, then there are no further questions at this point. If you have any follow-up questions, now is the time.

Well we heard of Emanuele's follow-up question at the very last minute. No other questions. Thanks again, and all the very best. [Statements in English on this transcript were spoken by an interpreter present on the live call.]