Maire S.p.A. (MAIRE) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Maire Tecnimont Full Year 2020 Financial Results Conference Call. [Operator Instructions] I would like to turn the conference over to Mr. Pierroberto Folgiero, CEO of Maire Tecnimont. Please go ahead, sir.

Good afternoon, everybody. 2020 will be remembered in the history books as a year of unprecedented challenges. Yet, we managed to record a solid financial performance with over EUR 2.6 billion in revenues and EUR 172 million in EBITDA. Such a performance was possible, thanks to our quick response and flexible approach that led our group to progressively adapt to a new normal, while putting safety first. Thanks to our HSE policies, our lost time injury frequency was 0 in 2020, an achievement we are very proud of. At EUR 541 million cash flow generation in the last 3 quarters has been extremely robust, leading to continuous improvements in net working capital and net financial position. Our business resilience has also been demonstrated yet again by a book-to-bill ratio of 1. Similarly, our commercial pipeline in the traditional business at over EUR 53 billion is strong and growing. Our group is well positioned in all the major tenders. We continue to make significant inroads in Green Energy, a business we implemented under separate entities in 2018, with a particular focus on hydrogen, circular economy, biofeedstocks and biofuels, as the multiple agreements signed last year demonstrate. We continue to add building blocks to this very important part of our business, including internationally, driven by a healthy and growing pipeline in excess of EUR 6 billion. Finally, our commitment to our shareholders is one of our strongest pillars. A dividend of EUR 38.1 million will be proposed to next month's AGM. This meant to represent a reward to our shareholders who stuck with us in these turbulent times. All in all, we stood our ground and never faltered in 2020, and we are ready to grow again in 2021. Before we analyze our operational performance, let's take a moment to have a closer look at our ESG approach. ESG values have always been an important and integral part of our organization. Our sustainability path is supported by a strategic vision in line with our values, our areas of excellence and with a particular commitment towards energy transition. Our strategy is developed in line with our industrial strategic plan, and it revolves around 4 clusters with an important role of governance, which is transversal to all areas of activity. In addition to the essential topics of energy transition and technological innovation, which are part of our DNA, our sustainability goals include the continuous development of our social footprint, the well-being, health and professional growth of our people, the value we bring to the territories where we operate and the enhancement of multiculturalism as an intangible asset. We are convinced that the sound sustainability vision is not only a powerful risk management trigger for our group, but it also helps us to be increasingly resilient to the ever-changing energy scenario in which we operate. And it constitutes an essential basis to create long-term value to all shareholders, while at the same time, maintaining our leading position in ESG and being a champion in energy transition. With that in mind, in the slide, you can appreciate our main 2020 achievements in terms of ESG. We are proud of the results that we have obtained that confirm our positioning among the leading companies in energy transition and sustainability, underpinned by our solid corporate governance, strong business ethics and top performance in terms of safety. These results were recognized by a prestigious entity such as MSCI, which recently upgraded our rating to A. Nevertheless, we think we can continue to improve. And for this reason, we have set new and challenging goals for 2021 and beyond, including our climate strategy, we want to be carbon neutral by 2030 and 2050. Our contribution to the development of local territories and people, support the supply chain, the development of our commitment to innovation, including digital and last but not least, the continuous strengthening of our governance. Looking further ahead, our ESG priority by 2025-2030 include the commitment to be a key enabler of the energy transition. This includes lowering the environmental impact of traditional processes, enabling more plastic circularity, facilitate the transition to hydrogen economy and finally, contributing to develop sustainable mobility. All these while being at the same time an enabler of social progress. Our ambitious path includes the definition of sustainable targets for all the group's companies, which has been identified, thanks to the materiality analysis that we carried out last year, so that our industrial plan combines economic and sustainability objectives, allowing an integrated strategic planning. Maire Tecnimont's sustainability policy is inspired by the United Nation's Sustainable Development Goals and the principle of Global Compact to which we have adhered for several years. Within this framework, safety has always been part of our core valued and, therefore, a top priority. In this respect, we are very proud of the accomplishments we reached in 2020. No lost time injuries. A great result, considering that our men and women dedicated 53 million manhours over 13 months to help our clients in our traditional business in 25 construction sites across 14 time zones from North America, Europe, Africa, Middle East, Russia to Southeast Asia, with the total average on-site workforce of around 35,000 people, including Maire Tecnimont's resources and direct and indirect workers. This achievement was made possible, thanks to our safe-think mindset and commitment as evidenced by more than 1.2 million of HSE training hours to our employees in 2020. And by the awarding in early 2021 by Bureau Veritas Italia of the multi-site certification in accordance with SA8000 Standard, the first in our sector. In spite of the very challenging period, due to the outbreak of COVID pandemic in 2020, we managed to successfully adapt our modus operandi, and we have put in place all the necessary measures to ensure our business continuity. We immediately took care of our people's safety, with safety first and HSE crisis coordination, extending smart work into the entire workforce, launching the health care information cycle and adopting ad-hoc procedures for safely managing the situation in each construction site. Our business continuity has been guaranteed, thanks to our flexible business model, and we found new ways and solutions to carry out both logistics and site operations. The smart helmet to carry out inspection remotely is just one example of this new approach to our business. A key element of our resilience has been the long-standing relations with our top international clients with whom we closely cooperate to ensure the project's continuity. Finally, we also took care of the communities where we operate, supporting local health care facility in Italy and abroad and helping the most fragile communities. Let's focus now on our operational performance our order intake last year was EUR 2.7 billion, representing a book-to-bill ratio in excess of 1. This is the highest ratio in the last 3 years and the second highest in the last 5, considering that in 2017, we were awarded the EUR 3.9 billion Amursky contract. Such an achievement in a year of a pandemic outbreak is a true testament of our leading competitive position, our long-term and strong relationship with our clients as well as the resilience of our business. The new projects are diversified, both geographically as well as in terms of business segment. We entered a new promising geography such as Turkey, but at the same time, we strengthened our footprint in countries where we were already present and with long-lasting clients such as SIBUR and Total. Thanks to the order intake in the period, our backlog stands at EUR 6 billion. 87% of the backlog in our traditional business is represented by gas monetization and energy transition projects, as we shall see in more detail in one of the next few slides. Europe continues to remain our main area of operations, but our backlog is widely diversified across various geographies around the world. Let's focus now on our 2 business units. Starting from the main one, we continue to maintain a good balance between volumes, marginality and duration in the backlog. Thanks to the acquisition of the second phase of Amursky project the E and EP portion amounts to about EUR 1.5 billion or 26% of the hydrocarbons backlog. This contributes to the derisking of our existing business, a very relevant factor in these volatile times. The backlog cover stands at 2.2x, providing a very high visibility for the future. The very important thing to highlight about our hydrocarbon backlog, though, is that gas monetization and transition fuels projects represent 87% of the total at the end of 2020. This is a testament of our green DNA and the fact that this group is committed to and is an active player in the energy transition process, which is already a dominant factor at present and going forward. This also shows how it was only natural for us to extend our business to green energy and energy transition, given our existing experience in our main business and the overlap to what we are doing in green energy as we will see later. 2020 has been a year of operational efficiencies, in spite of the extreme logistical health and social challenges that we had to face. Our operational machine kept running at full speed. We had 6 kickoff meetings relating to major projects, while we started a variety of smaller ones. Our logistical organization had to quickly adapt to an unprecedented situation. They went on an impossible mission in order to deliver 450,000 cubic meters of material to the various sites around the world through 2,200 shipments, a testament of the fact that we managed to keep the supply chain up and running. Finally, we reached the provisional acceptance certificate phase on 7 projects. Again, no easy task in the year of COVID. Overall, our men and our women worked 47.5 million hours in order to ensure a smooth execution of all our projects in the backlog, amid unforeseen difficulties and complications, a token of our experience, foresight and ingenuity. Our operations have been increasingly supported and enhanced by an increase in digitalization. In particular, our digital platform is the backbone that guarantees the business continuity, supporting all the engineering activities as well as other on-site operations, such as, for instance, the remote inspections of the equipment. Our digital Advantage platform was launched in 2015, and is aimed at optimizing our internal EPC processes and are creating a wider range of digital services for our clients. This EPC should enable the delivery of a digital service portfolio designed for our customers in order to optimize the operation and maintenance of their plants. NextPlant is the name of this portfolio, which leveraging on digitally enabled plant designed by Maire Tecnimont and on artificial intelligence and Internet of Things, allows our customers to reduce operating costs, mitigate the risks enhancing the operator's training, improve plant reliability and reduce CO2 emissions through the efficiency of the processes. As a consequence, our digital solutions enhance the EPC execution efficiency, unlock value for plant owners and represent a source of competitive advantage. One example of this is represented by the Amursky project, as shown on the next page. Both projects, Amursky 1 and 2, are running according to the schedule negotiated with the client, despite COVID-related limitations and multiple challenges due to the remoteness of the location. The Amur gas processing plant project, Amursky 1, has an 81% overall progress at the end of last year. 260,000 tons of materials were delivered since the beginning of the project, almost 50,000 last year alone amid multiple logistical difficulties related to the pandemic, which led us to find alternative routes in forms of fast track and heavy air cargo delivery. In Amursky 1 commissioning activities have already started and proceeding as scheduled. On average, 18,000 manpower are working on the site. To give you an idea of the magnitude of this number, please consider that the average population of a municipality in Italy is 7,500, less than half what we have in Amursky 1. The gas chemical complex project, Amursky 2, which started in beginning of May 2020, is progressing according to the schedule. With an overall progress ahead of schedule, 19.1% versus 18.2%. All major equipment have been ordered, especially oversized and heavy lift. Piling was started last December, and our staff is already on site to support the construction activities. There are a number of digital services. Our NextPlant digital suite, which will be implemented and carried out in this project. These modern solutions will improve the overall operations, making them more efficient, safe and cost-effective, just another way to deliver a first-class service to our clients, given technology of excellence for our group. Both these projects are being run in a safe, responsible and sustainable way like every other project in our backlog. And as highlighted at the bottom of this slide, for example, starting from early 2019, Maire Tecnimont has been implementing a best program of social and cultural integration in the Amur region, performing cultural and educational projects, supporting local communities with charitable activities with the aim of contributing to their development and sustainability as well as improving the working and the living condition of the project personnel. Moving on to commercial opportunities, our pipeline stands at EUR 53.2 billion, a EUR 5.7 billion increase in 2020. While COVID had a temporary timing effect on some of these projects, the fundamental drivers behind this growth continue to remain solid. This is demonstrated by the value of projects in the prospect, prequalification and pre-tendering phase, which have increased by almost EUR 3 billion in 2020. This is the result of our clients' willingness to continue investing in gas monetization and energy transition as well as of the need to add more efficient and environmentally compliant downstream assets. In terms of geographical opportunity, the last quarter of the year has seen increases in new projects, especially in Asia as well as in Europe, North and South America. Africa is stable as CSS CIS has seen a slight decline. Please note that over 70% of our current prospects are gas monetization and transition fuels projects, in line with our focus on these 2 areas. Overall, our pipeline remains extremely strong and geographically diversified, providing a solid support to future awards this year and beyond. Let's move now to the Green Energy business unit. As I mentioned earlier, it was only natural for us to extend our traditional business to this area, given our existing experience in our main business and our technological DNA. As a consequence, the 2 businesses are adjacent to each other with multiple connections among themselves. In this slide, you can appreciate just the main ones and see the integrated approach to the energy transition that we have been taking since 2018. The same output can be obtained using different feedstocks, and we are present on both sides of the equation. This is what we mean by a true integrated approach and being a one-stop shop. This is only possible because of us, of the unique skills and technological assets that we have within the group, including an unparalleled engineering expertise, a recognized leadership in polyolefins and fertilizers, a 50-year hydrogen and oil and an extensive experience in the power sector and balance of plants, which is essential in order to tackle and solve the challenges posed by the use of new power sources and for the large-scale production of green hydrogen. In a nutshell, our technology DNA makes us uniquely qualified to successfully extend our leadership role in our traditional business to the green energy and energy transition. That said, in 2020, we worked very hard on all areas of our green energy involvement. We finalized several circular economy initiatives, both in the waste to chemicals and plastic upcycling, leveraging on our plastic waste proprietary technologies. We have enlarged our alliance with ENI, which started in 2019 concerning the circular production of hydrogen and methanol in ENI's refineries, codeveloping a next-gen technology. The new project we are working on relates to the circular production of hydrogen and syngas for ENI in the Taranto refinery, the latter aimed at the steel industry. On the plastic upcycling side, we signed a strategic agreement with Aliplast, subsidiary of Hera, one of Italy's most important multi-utilities, to build a new upcycling plant in Italy, which will use our proprietary and cutting-edge MyReplast technology, which we successfully deployed in our Bedizzole plant. During 2020, we also signed some partnerships in order to strengthen our technological portfolio, such as the agreement with Lanzatech for the production of circular ethanol; with Saola Energy for renewable diesel; and with GranBio to license its 2G ethanol patented technology. We enhanced our circular economy initiatives signing an MoU with Indian Oil company in order to develop projects to foster the industrialization of a circular economy in India. This represents a very important milestone for our green chemistry business as the potential in the country is limitless. Finally, in December, we signed an MoU with Enel Green Power for the production of green hydrogen via electrolysis using renewable energy from an Enel Green Power solar plant in the United States. NextChem will act as technology and engineering partner and the group as the full turnkey EPC contractor. The project, which is expected to be operational in 2023, will supply the green hydrogen produced to a biorefinery. We're clearly at the forefront of the technological green energy innovation. And this continues to represent an important source of competitive advantage. I would like to give you now more color on our commitment to low-carbon solutions for biofuel, given the various agreements we closed in this area last year. As I mentioned, we are developing technologies for the production of renewable diesel and second-generation ethanol in partnership with, respectively, Saola Energy in the U.S. and with GranBio in Brazil. A few weeks ago, we signed an agreement with Essential Energy USA to realize a biodiesel plant in South America. The biorefinery will produce 200,000 tons per year of high-quality renewable diesel, and it is expected to be operational at the end 2023. The plant will be fed by advanced biofeedstocks non in competition with food and will allow an 80% life cycle reduction in greenhouse gas emissions compared to the fossil-based diesel. We believe the renewable business is a valuable solution for sustainable mobility and shows a notable market trend as the fastest-growing segment in the biofuels industry. The technology we are ready to offer as a modularized approach, and it is ideal for both small bolt-on facilities with access to a limited supply of captive feedstock and larger stand-alone plants. We believe we have a unique competitive advantage in this field. And we expect additional positive developments in the near future. As our Green energy business continues to grow, we have decided to start showing the extent of the opportunities that our colleagues in this business are pursuing. As you can see from this slide, the green energy pipeline stood at over EUR 6 billion at the end of the last December. There are over 100 potential projects that we are actively pursuing. As we are growing this business, it is only natural that most opportunities are located in Europe. That said, and as some of the recent agreements demonstrate we are also expanding our geographical reach beyond our natural boundaries, including India and the Americas. We will keep you posted on future developments throughout the year. I now hand over the microphone to Alessandro to discuss our financial performance in 2020. I will be back to provide you with some final remarks, Alessandro.

Thank you. Thank you, Pierroberto. As we already commented in our previous calls, revenues of EUR 2.6 billion in 2020 were negatively affected by the consequences of the COVID-19 pandemic and by the measures and restrictions imposed by the government of various countries starting from last March and expanded in the following months. As the situation improved in the summer, operations and volumes resumed a more normal trend, particularly in the last quarter, although at lower levels in comparison with pre-COVID times. However, thanks to our digital platform and flexible business model, we have been able to maintain a close cooperation with our partners and clients, thus mitigating as much as possible the impact on the operating activities. In addition to the resilience demonstrated at operating level, it is worth to remember the cost saving plan implemented as from May last year. The plan has embraced a wide range of initiatives, some of which are having a one-off nature, like the variable portion of the management remuneration and some others having a nature for which it is possible to expect that could be replicated in the incoming future. Operating efforts based by the savings achieved in the operating costs have made possible degeneration of a contract gross profitability of 11.9%, up 20 basis points versus 2019 despite lower volumes. G&As were EUR 71.3 million, down 4.7%. Such a decrease was mainly driven by the cost saving plan, which has more than compensated an increase related to the ongoing strengthening of the Green Energy business unit structure as well as the organization in those new geographies. Turkey, for example, where the group has become operational for the first time. Part of the benefits achieved in the G&A due to the implementation of the cost saving plans are expected to become permanent in the years ahead. Our ongoing commitment to Green Chemistry, which was extensively discussed by Pierroberto in the previous section is also demonstrated by a 21% increase in research and development cost to EUR 8 million in 2020. EBITDA was EUR 172.2 million with a marginality of 6.5%. As you may recall, our EBITDA margins in the first 3 quarters of 2020 were 6%. Having managed COVID impacts in coordination with our clients, the positive contribution of the cost cutting program has supported the improvements of the marginality of the fourth quarter as well as the marginality of the period taken as a whole. Therefore, the excellent result of the fourth quarter cannot obviously be considered as structural and, therefore, as indicative for the underlying normalized marginality going forward. For this reason, please keep this in mind when Pierroberto will discuss the 2021 guidance and later. Net financial charges were EUR 44.9 million. As discussed in the previous conference call, this item has been negatively and predominantly impacted by the adverse valuation of certain derivative contracts worth EUR 9.5 million, while in 2019, this valuation was positive for EUR 2.4 million, implying EUR 11.9 million negative change in 2020. Tax rate was 31.2%, in line with our historical average. And as the tax rate was in line with the historical average, net income was EUR 54.2 million, while group income was EUR 57.7 million. Moving on to the balance sheet. Let's analyze the cash flow dynamics during the year. First quarter cash flow had been negatively affected mainly by the mismatch between advances from clients to suppliers and the slowdown in the settlement negotiation concerning projects close to their completion due to the consequences of the pandemic and with the resulting deterioration in the net working capital. In spite of ongoing challenging condition, the second and third quarter have started to witness a gradual return to a working capital normalization, also thanks to an increase in advances for clients related to some of the projects acquired in the first half of last year. This has resulted in 107 -- EUR 167.4 million increase in the operating cash flows, which was the main driver for the improvement in the adjusted net financial position. For the purpose of our discussion today, we have adjusted the net financial position as of the end of last September in this chart, in order to include the trade receivable equivalent to a financial credit for an amount of EUR 223.5 million, which were excluded from the calculation of the adjusted net financial position at the time of the 9 months earnings release. As you can appreciate and as anticipated from the movements recorded in the last quarter of 2020 on top of a significant operating cash generation, all these credits have been cashed in, leading to a total operating cash flow of EUR 373.6 million in Q4. The strong cash flow generation of EUR 541 million from Q2 onwards has thus been the main driver for the significant EUR 227.9 million improvement in the net financial position in the same period. Let's now look at the evolution of the net working capital last year. Similar to what has happened to net financial position, the adjusted net trade working capital has seen EUR 190.7 million improvement in the last 3 quarters of last year. Such an improvement has been driven by a significant decrease in the net working progress which was decreased by EUR 236 million compared to December 2019. In fact, this item has decreased in every single quarter. This has been a very encouraging sign after the increase in this item was the main cause of the deterioration in working capital in 2019, which saw an increase in the net working progress of about EUR 270 million. Despite COVID, in the second half of 2020, we have been able to successfully complete the last phase of several projects, obtaining the acceptance from the clients, and thus having the possibility to invoice the last contractual milestone, and the bidding to cash them, thus supporting the decrease of the net working progress. This improvement was compensated by an increase in the advances given to suppliers and by a decrease in accounts payable. Most of the increase in advances to suppliers took place in the first quarter and was linked to scheduled payments, which were made prior to the beginning of the pandemic as extensively commented in our previous conference calls. On the other hand, as commented earlier by Pierroberto, as we managed to keep all the main EP and EPC projects up and running, we insure to work with all our suppliers in order to keep the supply chain operating at full capacity in light of the various limitations across the globe. This is reflected in a healthy reduction of the account payable in the first quarter. As work continues to be performed in all our main projects and new contracts are expected to be awarded over the next several months, we expect further improvements in the net working capital in 2021 and beyond. And now, I hand over the microphone to Pierroberto for his final remarks.

Thank you, Alessandro. In conclusion, our operations are up and running in spite of the critical period that the world is still experiencing. Our business has improved in the second half of last year and as the situation is expected to continue improving over the next few months, so will our business. Our significant backlog provides an excellent visibility for the next couple of years. Moreover, our strong commercial pipeline is expected to deliver new projects in the traditional business. At the same time, we continue with the development of our Green Chemistry business. We feel that 2021 will witness a change of pace and that we will bear the fruits of everything that we saw over the last couple of years, leveraging on more than 100 commercial prospects. 2020 has been an extremely and uniquely challenging year. As the situation is expected to improve and normalize, we see 2021 as a year of transition, where we go back to growing again. Given the current visibility, we expect revenues to grow to EUR 2.8 billion to EUR 3 billion, with an EBITDA marginality in line with normalized profitability of 2020, as explained by Alessandro earlier. And as we expect the working capital to continue to improve, the net financial position is expected to show further improvements by the end of the year. Our expectation is obviously based on the assumption that the current situation doesn't get any worse. If that were to happen, our estimate may change. Our business case is solid as we stood our ground in 2020. Now we are ready to grow again in 2021. This concludes our presentation. As usual, Alessandro and I stand ready to answer any questions you may have. Operator, please go ahead.

[Operator Instructions]. This is Chorus Call conference operator. First question is from Alessandro Pozzi with Mediobanca.

My first question is on Green Energy. First of all, I appreciate the additional color that you provided with the backlog breakdown for the different divisions. I remember, when I look back at the Green Day presentation, I think the NextChem target was EUR 50 million, I believe, EBITDA by 2023. Of course, we were in a different world. But I was wondering how do you see the Green Energy EBITDA growing over the next few years? That's the first question. And the second question is, in energy transition, there are different technologies from green ammonia, biofuels, waste to fuel, waste to chemicals, which one do you think is going to be the more vibrant or the more -- where you see more opportunities in 2021 for the order intake?

Many thanks for your question. I think the first mechanism, I want you to appreciate is the typical life cycle of an investment initiative even in Green Energy arena. And the typical mechanism is a mechanism whereby you start with feasibility studies. Then after the feasibility study, if the feasibility is okay, you move to engineering, with estimation of the CapEx magnitude, plus/minus 20%. And then if it works, you move to the final investment decision. And then obviously, along with the final investment decision, you have to arrange all the relevant financing. Where we are in this process? In 2020 and in 2019 as well, we have carried out a lot of feasibility studies that are ending positively, so with very encouraging results. So the end of 2020 and 2021 will be the year of engineering to engineering to CapEx, engineering to estimation of the investment magnitude. And we are a lot of initiative at this stage. So let me say that it's a kind of snowball effect in which you have to start from the visibility and you will end up with an EPC project. Obviously, in order to have visible items, you need to achieve the step of EPC contract. And this is what we are envisaging for 2021 and 2022. So we believe that these will be the 2 years in which the visibility and the size of those initiatives will increase largely, largely. Let me also add that the -- at least in Europe, the multitude of public kind of incentives and recovery fund driven measures will obviously enhance and accelerate the IRR of those investments. As you may know, when an initiative is eligible for such a financial aid, a portion of it will be a grant and a portion of it will be a kind of, I would say, financing at kind of incentivized interest rates. So again, the fact that this money will be available on the market, will be an accelerator to our initiatives because it will enhance the IRR of those initiatives. And I believe that there are a lot of initiatives that are close to this step. For example, in Italy, we are promoting a lot our already developed project under the umbrella of recovery fund money. So this is the reason for the acceleration we are envisaging. Moving to your second question, which kind of plants -- which kind of technology. Let me start from the regulation because as I just said, in order for this new world to happen, you need kind of general interest measures. And there is already the regulation in place that is called RED II, R-E-D, that is the Regulation of European Union for biofuels and in a sense also for circular fuels. And those measures are already there. So which are the segments in which this acceleration is likely to happen? The answer is, for sure, the biofuels. You know that there is a regulation in place whereby every producer of fuel -- of fossil fuel is obliged to add a 10% component -- biocomponent to the existing production. And if you don't add it, you have to pay kind of fine, so there is already a market there. And this 10% is being elevated to 14%. As you know, the Europe is truly short of those bioadditives. Renewable diesel is 1 of the 2. Renewable diesel has also the beauty that it's a fuel itself, it's not only an entity, it's a fuel itself. But similarly, also bioethanol is a biocomponent to gasoline. And you know Europe is very, very, very short of this kind of component. So that's why you see renewable diesel and bioethanol initiatives popping up everywhere in Europe. In particular in Central Europe, they are very, very clever in taking advantage of new regulation and available money. So such initiatives are popping up in Croatia, in Poland, in Hungary, in Central Europe, I would say. Italy, also Italy is really short. There is only a biorefinery in Marghera. It's a biorefinery, it's a kind of transformation of Marghera hydrocarbon refinery into a biorefinery and the renewable diesel that ENI is selling over there is truly, truly profitable. Exactly for the reason I told you, there is shortage of renewable diesel in Italy and Europe. Bioethanol is simply not existing. So that's why we are also targeting this kind of initiatives everywhere in Europe. So to answer slightly your question, which technology? For sure, biodiesel. Why biodiesel, bioethanol? Let me say, biofuels, why? Because the regulation is already there. And then there is a lot of momentum around plastic recycling. You know that in these days, European Union is writing down the new directive on circular economy and on obligations in the usage of recycled polymers in the production of plastic materials. So again, the more this regulation will accelerate, the more circular economy initiatives will be there. In fact, we are taking care of several initiatives in upcycling, but also several initiatives in waste to chemical. So let me say, this is the second very interesting area of short-term developments. Waste to chemical means recycling of plastic wastage into chemicals. For example, again, you can produce methanol or you can produce ethanol with a biocomponent. So again, waste to chemical could be an alternative way to serve and address the demand of the biocomponents I was telling you before. So this is the short-term goal we are taking care of. Then there is a kind of growing momentum on hydrogen. As you know, hydrogen is a lot of things. Hydrogen can be even circular. So we strongly believe that if we want to break the ice on the hydrogen economy generating the demand, because you know to have the market is not only a supply story, it's also a demand story. In order for hydrogen to gear up, you need to break the ice. And we believe that circular hydrogen can be a very good way to break the ice and to start to promote, for example, mobility, heavy truck mobility, public transportation and municipality public transportation using hydrogen -- using circular hydrogen. You know that it will be the way to solve 2 issues; one issue is the green mobility; the other issue is what to do with wastage, with plastic wastage as soon as European regulation becomes more stringent and as soon as the export to China of this kind of material is forbidden and not permitted. So those are the, I would say, hottest dossier on our desk.

That was really interesting. Just going back to the biofuel, I think one of your last contract was a biofuel feed for your refinery in South America. Any more color on when it is, and whether they could move into an EPC contract at some point this year or next?

As I told you, biofuel, it's a no-brainer. The process is quite a simple one because basically, it's the same process of refinery -- of traditional refinery, but the difference is that it's not hydrocarbon oil, but it's vegetable oil. So the issue with renewable diesel with HVO, hydrogenated vegetable oil, which is the same is the availability of feedstock, it's not the technology itself or the efficiency and effectiveness of the technology itself because this matter is truly covered. And the beauty of our idea is that we are customizing an HVO technology on small-scale available feedstocks. And this is good because in the new world, the logistics will be key. While in the hydrocarbon world, it's a matter of having big shipment of oil from Saudi; in the Green Chemistry, logistics and availability in the surroundings of feedstock will be key. So this is why Latin America is a good option because Latin America is already accustomed to manage agricultural wastage as a feedstock. South America is the country of these kind of fuels. They started several years ago. So the matter is to reread the logistics, reread the supply chain and push hard on the 2G. The first generation was the generation whereby you can use any kind of agricultural waste. The second generation, which is the one incentivized, it's agricultural waste, in the sense that not in conflict with the food chain. So it has to be something that is not usable for food -- for the food chain. So this is the challenge. We are on top of it, and our prospect and our engineering project in South America with Essential Energy is a perfect example of the right geography, the right technology and the right timing.

Your next question is from Mick Pickup with Barclays.

Mick here. Just quickly before I ask question, just on Alessandro's question about EUR 50 million of EBITDA in 2023, I don't think you answered the question. Is that still practical with this current scenario and backlog?

Sure, sure, Mick. I answered indirectly, but the direct answer is yes. Consider that we -- in our EUR 50 million, we consider all the business that is not hydrocarbon. So all the big initiatives we are pursuing is renewable energy and Green Chemistry. So it's a large set of opportunities. And consider that we gave that number at an exit -- as an exit of our first cycle of business planning for energy transition. As for the EUR 50 million, at the end of the plan, in terms of EBITDA, it depends on the backlog you are accruing in 2021 and 2022. So in order to believe on our expectation of EUR 50 million, we have to look at what we are going to secure in the next 2, 3 years. So you don't have to wait a lot with us in order to see if it is doable or not.

Okay. All right. And then just following on from that. Obviously, you've given this commercial pipeline now. Given that you're involved with your own technology, you evolved a lot earlier, are we right in assuming that your chance of success of converting that pipeline is much higher in that than the traditional hydrocarbon business?

So your question is looking at the commercial pipeline, which is the expectation of our success rate, that's the question.

Yes. I would say, no -- am I right in assuming that the success rate on that commercial pipeline should be much higher than your success rate on the hydrocarbon pipeline because it's your tech and you're involved earlier?

You know what, it depends on the technology. So if you take the HVO, for example, the HVO is a technology that is, as I told you before, proven. So it is not a rocket science. And therefore, the success rate on those initiatives is truly, I would say, high because the technology is proven and the demand is huge. So there are no risks that when you go for the CapEx estimation, you have surprises on the IRR targets. When you move to new technologies, it's much more an exercise for ourselves. So the process is there because the technology is always proven when we work, but you need to procure that the balance of plant is optimized and, therefore, the CapEx is truly shrink to its minimum. So there will be projects that will go very fast, and that's for me the biofuel story. There will be projects in which we have to build the first of a kind. So look at waste to chemical, for example. Waste to chemical, it's a big plant. So it's something that is easily in the region of EUR 300 million, EUR 350 million. So if you secure 2, 3 of that, you are easily doing a good backlog. And therefore, according to the rollout of the backlog is EBITDA arriving. Waste to chemical, we need to build first of its kind. The recovery is proven because every model of the technology is already existing and productive, but the innovation stands in the integration of the 3 models. So the first model is a gasifier that is working in Japan since 20 years. There are 50 plants working there efficiently. You can go there and measure the effectiveness. The geometry of the reactor is the same, exactly the same. So it's a no-brainer on the technology itself. But then there is a second model. There is a model of purification, so the gas getting out of the gasifier is purified and is purified with our property technology. Again, we are purifying any kind of gas all over the world since the last 100 years. So we know exactly what does it mean to purify the gas. The third model is a classical model on the commodity you want to produce. So if you want to produce hydrogen, it's a PSA. It is a technology you can buy on the Internet. If you want to produce methanol, there are 2, 3 processes well-known all over the world with hundreds of references. If you want to produce ammonia, again, it's the same. So there are no technological risks. But for sure, we need to build the first of its kind. Once we build the first of its kind with ENI, I think the rest of the market will be down here because it's a no-brainer that energy transition starts from circular economy. So it's much easier to use the plastic waste. You are in front of your house or more or less in your region rather than to look for exotic feedstock or to convince bacteria to heat the sugar you wanted to eat. You know my point? So on renewable diesel, I think it's a no-brainer. On waste to chemical, again, it's a no-brainer. But what will be a game-changer truly is to build the first of its kind and to produce cheap chemicals in the circular/green economy envelope. With ENI, very soon, I think our target end of the plan will be more likely, much more likely.

Okay. And then can I just talk about the change, obviously, on that green energy pipeline, you're talking 56% Europe. One of your competitors is doing a biomass project in the U.K. and discovery in the -- operating in Europe and doing EPC in Europe is very difficult. Can you just talk how you're going to address the risks of actually executing this backlog if it comes?

Let me say, biomass plant is something truly brick-and-mortar. So it's a classical plant in which the competition is huge. And again, when you work in a very competitive environment, the pressure on margin is the highest. So for sure, the first remedy to the problem you are rightly highlighting is the condition you get the award. So if you get the award as a developer, again, you are not squeezed out as typically you are in a tender. And therefore, you put all the contingencies and all the allowances in order for the risk to be managed. So this is the first answer. So we are not talking about biomass plant to go buy. Everybody can put together a biomass plant. We are talking about something in which we are the owner of the technology and in which the technology is incentivized and then, I would say, the budget is comfortable. Let me also add that in Europe, it's key to go for, I would say, risk conscious agreement with clients. So for example, we know exactly what does it mean to build in Europe because we are building a huge PDH, propane dehydrogenation, plant for Borealis in Belgium. And we are building today a refinery process unit in Donges in France. So we know exactly what does it mean to incur construction risks in those geographies. And for example, in Belgium, we went for a peculiar construction scheme, whereby we don't incur the typical productivity risk you have in unionized territories. And so that's the second answer to your question. So the first answer is to compete on the right tenders and even not to be in tenders, but developer projects. The second answer is to address the construction risk in Europe with, I would say, a rightly envisaged constructor skills, whereby the productivity risk, that is the productivity in -- that is the risk in European country is properly addressed. It is not a bet on the shoulder of the general contractor, as we have been doing.

Yes. Okay. And 1 final question. You've got EUR 13.5 billion tendered, as we stand today, and it's been pretty constant to that level. Obviously, steel prices have more than doubled in the past 3 to 6 months. How have you protected that tendering pipeline against that massive increase in steel prices?

In the big tenders that are in the pipeline, there are a lot of discussions going on. So for sure, we will not incur in any shortfall in that respect because we will negotiate at the end -- until the end, until the last moment. So whatever is the disruption, we are fully equipped to manage it with the clients, and we will never sign a kind of blank check because of such a disruption. So on the future project, this is the strategy. The strategy is to negotiate these disruptions with clients about timing. On the existing projects, it's a different story. It is totally under control, and we don't see any issue. For the future, I think your point, 100%, because this is an issue. But you know the famous saying, "In life, it's -- to make money, learn when to say no." It's a famous saying of Mr. Hilton, the owner of the -- hotelier. So the real money you make when you learn when to say no.

The next question is from Kevin Roger with Kepler Cheuvreux.

Yes. I have 2 questions. The first 1 is related to the working cap. It's really good that we have seen this improvement in, let's say, the past 2 quarters and that you are guiding for an improvement also in 2021. I was just wondering if you have, like, say, some reassuring elements for us in the fact that we should not experience such volatility in the working capital movement than what we had, for example, in 2020 and 2019? And the second question is related to the more traditional activity. So clearly, the pipeline remains huge. Would you say that it's very likely that your order intake in 2021 will be higher than 2020 as the macro environment is improving?

Let me answer the second question, and then I will leave it -- the first to Sandro, going through some more clarification in your question. On the second question, there are basically 2 markets, 2 big markets that are expected to restart -- re-jump forward again in 2021, that is Abu Dhabi and Qatar. There are a lot of tenders in Abu Dhabi and Qatar. Qatar already broke the ice with a large award in the LNG and in the offshore award of the North Field Offshore gas field. And you know our big size, large size are very likely to go. So there are certain kind of big fish that we are going to pursue in Middle East, for sure in Qatar. Second, big market that is going to be back again is Abu Dhabi. In Abu Dhabi, there are -- there is a large development that is Gas Shah (sic) [ Shah Gas ] is a huge gas development initiative that is worth several billions, several, meaning in the region of EUR 10 billion. And it's very important for the energy strategy of Abu Dhabi because they have a large program to become self-sufficient or as possible as self-sufficient as possible vis-à-vis Qatargas. So that's why they will, for sure, pursue that initiative. There are a lot of packages, so this very big elephant is being sliced into different portions. And we are obviously well positioned basically on, I would say, 3 out of the 4 packages because the fourth package is an offshore package. As you know, we are not pursuing those kind of initiatives. So you know our tradition in Abu Dhabi. You know that we are constantly performing because we are in the gas treatment and polyolefins with a kind of aggregate amount of references in the region of EUR 20 billion. So you know how much we are credible in that geography. So for sure, only with Qatar and Abu Dhabi, I've answered your question. Because if we behave properly in those 2 geographies, we are truly in good shape. On top of it, the fertilizer market is picking up again. We are on top of at least 2, 3 large size fertilizer plant tenders in which we are very, very ahead. So there is some reasoning about the final investment decision of client and kind of financing and financial support of the relevant government, but they are going to fly because they are very instrumental to the industrialization of those countries. And all the world is desperately looking for investments in order for the economy to restart. So this is just to tell you about the large size projects. So projects with the magnitude that can change the face of the order intake of a company like Maire Tecnimont. Then there is a plethora of medium-sized and small-sized projects in the polypropylene and polyethylene space. And there are geographies that are very active because all the world need to do something and this is something we have to be either fertilizers or plastics. India is a market that is continuing to sanction new tenders and new projects, and you know how much we are half Indians. So good opportunity in this space of midsized projects even in the Indian continent. So just to give you the flavor of our hopes on tendering and tender expectations are. So to answer directly your question, yes, yes, there is a very good possibility that the order intake will be much higher than the order intake of 2020, but exactly for the prospects I was just highlighting to you. Sandro on the second question, what's your point?

Yes, sure, sure. Kevin, I don't want to answer -- to provide you with a political answer. But what I'm going to say is simply the reality. You know, our projects are not linear since the beginning up to the end. So of course, the cash flow and working capital, which is a direct -- I mean, the direct connection with the project execution may varies depending on the phasing of the projects, can be -- may vary in connection also with the results of the negotiation that we normally have with the clients in order to define with them additional compensation for changes that can occur over the life of an EPC project. And more than that, it can depend a lot on when new projects are awarded. For sure, we can plan and we can estimate when the first 2 elements could happen because more or less are under our control. But for sure, it is quite difficult to predict when new projects will be awarded. And new projects for us means to cash new advances, which from one side, improve working capital and on the other side improve the net financial position. So what I can say is, for sure, we do not expect to suffer the same swings that we have suffered last year, in particular, in the first Q. But I do not exclude that there could be, let me pass this definition, minimal variances compared to the situation that we have experienced by the end of the year. The trajectory, the direction is an improvement because having provided a guidance in respect of the net financial situation, whereby we expect an improvement compared to what we have experienced by the end of 2020, up to the end of 2021. Accordingly, there will be an improvement also in net working capital. So this is the message. It's much better, of course, to focus and to analyze our capability to govern -- to exercise, to govern us on the working capital not on a quarterly basis. A quarter for us doesn't mean almost anything. You must analyze this capability on a much longer period, at least on a yearly basis. But, however, just to say that you must not be scared if there will be a temporary deterioration, but will be accompanied for sure in the quarter after by an improvement. Everything leading to a global improvement is expected by the end of the year. I don't know if I have satisfied your question, but this is the picture, this is the story.

No, no, absolutely. That's fair enough. I mean, we can totally understand that it's very difficult to predict with a lot of variation, et cetera, that if we can have, let's say, some hope that we will not suffer from the same magnitude as you said it's something as far as...

No, no. Not at all.

The next question is from Massimo Bonisoli of Equita.

A few questions. I will start with Green Energy. Back on the question of Mick, do you expect the very first sizable projects in this cluster maybe might have lower profitability compared to hydrocarbon projects because of the learning curve in the delivery of those projects to the client as well as the need to show that those technologies are working, so you are maybe willing to take more risks? So some color on the profitability would be helpful.

Let me say that we have -- our expectations are the other way around. Our expectations are that we move in an environment in which the competition is different. Yes, you are right, we are not going, again and again, on the well-known roads. So we are pioneering new roads. But once the process is working, the rest of our plant is a plant. So it's very important that the estimation is correct, that the IRR is there. The rest of the execution is normal execution, but I would say even more. The big difference between hydrocarbon and green chemistry is that the comparison is very simple and very poor. So the complexity of a petchem plant is one thing. The complexity of a green chemistry plant is -- it's a portion of it. It's the same difference between a kind of combustion engine and an electrical car. If you know anyone in the automobile sector, he will tell you that an electrical car is a toy, while combustion engine, it's someone for very experienced engineers. And the difference between petchem and green chemistry is exactly the same. So the temperature, the pressures, the machinery, all the risks of the process are truly, truly, truly different and easier. So at the end of the day, I don't think that it's a business with higher execution risk. I rather believe that it's a business with different competition. So that's why we believe that, for sure, a steady state, the marginality will have to be better.

And the next question. I appreciate your previous comments on biorefinery. So if you can provide some background information about essential energy? And maybe you're in South America, do you expect to build the biorefineries?

Well, you know, this is something confidential. So we are in an agreement with the client that is very conscious about this kind of information because of its own, I would say, interest. Essential Energy is a player that is already active in biofuels. So they know already in the market. They know already the, I would say, industrial environment. So it's a good client, for sure. It's a new world. So it's not Exxon, needless to say. So you're not dealing with the highest market cap company in the world. But we are dealing with very professional, very experienced. So it's not an entrepreneur that is trying to become rich. It's very professional management team with references and existing clients and operational expertise in the biofuel space. And again, this is because Latin America is the country of biofuels. So they are already accustomed to -- they have cars that can go 100% with ethanol, for example. So maybe the 2 countries accustomed to manage ethanol is Latin America and Brazil, for example, in particular, and other countries short of gasoline that are learning how to use this ethanol or similar molecules for combustion engines.

Very interesting. And a couple of questions for Alessandro, just for our modeling purposes. Financial costs increased over 2020, so just to have some flavor on the financial cost into 2021, excluding the one-offs that are unpredictable, such as the mark-to-market of derivatives and the same for depreciation charges in 2021.

Yes, you are right. Effectively, as already stated, the financial results of 2020 have been affected by something which we do not expect to experience the same size in the coming future. Of course, we'll continue to hedge our projects. We continue to put in place hedging contract as soon as we sign a contract. But I do believe that the consequences that we experienced last year is predominantly the result of the contingent situation, which occurred in the market as a consequence of the pandemic. So now moving hopefully, in a more stable market, those 2 items we have -- which have played against positive results in 2020 will not -- it is reasonable not to expect the same size in the year after. But on top of that, we also expect to lower also other financial costs linked to the financial -- existing financial structure. We are going to optimize a little bit our financial structure because when you have liquidity, even if you find out a proper solution, but the reward recognized on the deployment of liquidity is close to 0. Since now we have the possibility to revise a little bit our financial structure, we expect also those finance costs, which are more linked to our financial structure, could be lower than those incurred last year. So all in all, in 2021, financial cost should decrease significantly compared to what we experienced last year.

And for depreciation charges?

For, excuse me?

Depreciation and amortization charges?

Depreciation, most of them, the rise is the result of the application of the IFRS 16 so which means that the capitalization of lease contracts. On top of that, of course, there are also the results of our R&D, which at the end is a successful costs, which are capitalized. And then, of course, we continue strengthening our IT platform and digitalization process with new elements. But however, providing a direct answer to your question, depreciation charges are not expected to be modified significantly compared to the charge that we incurred last year. So more or less, for your model, you have to estimate more or less the same figure that we have charged last year.

Very clear, Alessandro, just the very last question. I read in your press release that you increased the provisions for credit risk. Would you consider the level of risk of your credit portfolio is in line with the past year's level? Or there could be some differences?

Nothing specific. Of course, as all those entities, which applies IFRS also in evaluating the risk embedded in the receivables. We have applied the criteria provided by the IFRS 9, which is that -- they will also for the banks. So the application of this principle in a situation whereby the COVID has moved down the credit rating also of very healthy, financially speaking, entities, applying the formula embedded in the accounting principle. We have been obliged to charge the P&L with an extra charge, but it is not because realistically our clients are in, let me say, worst shape compared to previous periods. We are talking about the primary energy companies; international, national energy companies. So it is just -- believe me, it is just the application of the accounting standard. It is not -- nothing pathological, nothing specific, but just the result of the application of this principle, for which I could be possible if the merit of credit of those counterpart will improve in the coming future that we could also release part of the provision. But for the time being, we are not expecting nor to charge additional -- to have an additional charge in 2021 and not to have any releases. So more or less based on our rather screen in 2021, this provision could be in the range of EUR 1 million, no more than that.

The next question is from Roland Vetter with Praxis Partners.

On Page 4 of your press release, there's a comment about a EUR 5 million one-off charge, which is related to transactions optimizing working capital. I assume this was a charge for ranging factoring. Can you please tell what was the level of factoring of receivables or payables at the end of 2020?

It is something that we have -- this, let me say, a strategy to optimize our working capital that we have predominantly adopted in the first part of the year immediately after having our client experienced a sort of disorientation. In order, of course, to procure our business with the appropriate financial resources, we have immediately considering also, let me say, the merit of credit of our receivables of our clients. It was possible, of course, to put in place factoring strategies, which all over the second half of the year, ranged between EUR 100 million and EUR 150 million. This was almost the size of the medium of the average amount that we have discounted in order to anticipate the flow from the clients. Some of them, even if wealthy, as I stated before, they found no other solution immediately after having proved the shock of the COVID not to ask other than to ask a postponement of the payments of the contractual fees by several months, of course, by recognizing also an interest on this delay. But of course, we are interested in monetizing and having liquidity in our hands. So for this reason, we have decided to record factoring, and this is the result of the story. Having at the end of the year obtained a quite sizable level of liquidity, we do not expect to replicate this type of transaction, at least with the same size that we did in 2020. For sure, factoring or other trade instrument are normally utilized by us in order to optimize temporary measures to manage properly the working capital. But for sure, we do not expect to replicate the same experience this year.

Okay. You just said the average was EUR 100 million to EUR 150 million. Can you also say what was the amount at the end of the year?

The amount discounted by the end of the year, I prefer not to provide with this answer. However, at the end of the year, outstanding is negligible. I don't provide a specific number, but it's negligible.

Your next question is from Roberto Ranieri with Intesa Sanpaolo.

Two questions on figures, on financials. The 6.5% EBITDA margin recovered versus 6% in 9 months. So I suppose the fourth quarter was brilliant in terms of marginality. My question is in what -- which were the main drivers for this strong recovery? Was backlog mix towards higher component in EP projects versus EPC or any other items? My second question is on working capital. I have seen that advances from clients during the year was totaling something like EUR 350 million, EUR 370 million, if I'm not wrong, in terms of advances. So I'm wondering if it is exceptional or basically to be replicated also in 2021. My last question is on -- a follow-up on the green energy. A very quick question on the opportunities and the pipeline. My question is basically, what do you expect in terms of total spending in this area from the -- your clients, say, presenting in the next 5 years? So just to understand what the total amount will be in the medium, long term? And what the ramp-up of this spending will be in the next 5 years?

Let me try to answer to your first 2 question, Roberto, and please correct me if I have not well understood your question. First of all, marginality which we have realized, in particular, in the fourth quarter compared to the previous quarters. As I have stated during the presentation, this is predominantly the result, the positive outcome of the cost-cutting program. As you know, even already during our half year conference call, we have anticipated that in order to reply properly to the effect of the pandemic, we have sanctioned and immediately implemented a very, very important cost-cutting program. Of course, important compared to the size of our group. We are talking about several million euros. And these -- the savings, which we have effectively achieved, which we have effectively realized, have contributed to the margin improvement in the fourth quarter and have also contributed to create on average an EBITDA margin for sure higher than those experienced in the previous quarters. So for sure, predominantly, the improvement in the marginality is the positive result of our cost-cutting program. Then as far as your second question is concerned, I believe that you have raised a question about advances from clients.

I will take care of it because the second question was about our expectation on the spending from clients in the medium term, correct?

Yes. Because the EUR 350 million, EUR 370 million seems to be very high. So I'm wondering if you expect some changes in terms of percentage from the clients on new order intake in terms of advances from -- on this project. So it seems to me that they are very favorable despite the competitiveness in the sector. I suppose they are very -- it is a very good result for you.

So again, my understanding is that you would like to have more color on our expectation on the spending in the medium-term of our clients in the green energy?

Yes.

So let me say that there are different kind of clients because I would tell you that there are mainly 3 kind of clients. The first kind of client is the traditional one, so it's the energy transition investments of all the company. And if you divide the oil company between European and non-European, you are just taking an important angle. So European oil companies are allocating enormous amount of money to this energy transition story. And obviously, the best way to translate those allocation of capital into real investments is to combine this money with the financial stimulus of the several institutions, I would say, governmental institutions. So this is the first part of the answer. So I cannot give you the number. But if you go through the investment presentation and business plan presentation of an European oil company, you will be impressed. So if you look at ENI, if you look at Shell, if you look at Total, if you look at BP, you will see in the next 5 years, for the huge market, they are going to open. Again, in order to transform it into capital, into investments, it'll be very beneficial to team up with the resources coming from the financial stimulus measures. Then there is another kind of client that is increasingly active in the same space, those are the utilities. So you know all the big utilities are targeting a strategy to become energy company. So oil company want to become an energy company, a utilities company wants to become energy company as well. So again, if you look at the business plan, if you look at the announcement of big utilities, you will be impressed by the capital allocation on those projects. So simply, if you stick to Italy, if you look at what A2A, Hera, Iren, Acea, just to give you some examples, without mentioning Enel, you will be impressed. So in terms of willingness and expression of intentions, I would say that we have a kind of blue ocean in front. Then there is a third kind of client that are traders. So traders and, in particular, traders having infrastructure. So traders having deposits having, I would say, gathering lines, I would say, infrastructure ancillary to the trading business. And those clients are very entrepreneurial because they are understanding that the world is changing, they can inject much more agility than a big ex-municipality company like utilities or bigger companies. So there are 3 different kinds of clients. This -- the last kind, let me say, the traders with infrastructure are the one more active in developing projects. So they need someone that is helping them in the execution risk and in the development phase. While with oil company, with utilities, you not necessarily need to be a developer, with this kind -- with entrepreneurial traders plus infrastructure kind of clients, you have to be also a very good developer. So to answer your question, I don't have an exact figure, but I believe I gave you a kind of qualitative indication of how much deep, how much -- how profound is this market. And I take your point, now is the time to discovering it. So the vision is that now is the time to translate change into growth.

Okay. Just a follow-up on this point. So basically, if I assume the same percentage in terms of advance from clients and same new order intake or even higher, I suppose that there will be no major negative impact or positive impact. There will be a neutral impact on working capital from this item. Is that right?

I don't believe that there are specific reasons why we should take a different assumption in that respect.

[Operator Instructions] Gentlemen, there are no more questions registered at this time.

So thank you very much for attending this conference call, and have a good evening.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.