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 First Half 2021 Financial Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Pierroberto Folgiero, CEO of Maire Tecnimont. Please go ahead, sir.

Good afternoon, everyone. Thank you for attending the first half 2021 financial results conference call. As both existing and new projects in our backlog are advancing this year, all the major KPIs are growing in the first half vis-a-vis the same period of last year. As a result, we recorded first half revenues of EUR 1.3 billion, up 9.2%, and EBITDA of EUR 80 million, up 9.1%, and the group net income that has almost doubled to EUR 40.1 million. EBITDA profitability continues to be in line with our annual guidance of 6%. Cash flow generation has continued in the second quarter, driving the first half total to EUR 164.2 million, helped by significant advances from clients for the EUR 1.9 billion projects we were awarded last April. As a consequence, adjusted net debt decreased by EUR 85.5 million and adjusted net working capital by EUR 69.1 million in the first half. Our commercial activities keep on running at full speed as we recorded the highest first half order intake since 2018 at EUR 2.3 billion, increasing our backlog to EUR 7 billion. On the other hand, our pipeline remains extremely solid with almost EUR 62 billion worth of opportunities, both in our traditional business and in Green Energy. The latter continues on its expansion path with more demands across a variety of areas, including low-carbon fertilizers, green hydrogen, biopolymers and sustainable fuels. In conclusion, we are back to growth driven by a very successful order intake and the return to a relatively normal situation in the day-to-day running of each project. Our main consolidated financial results are shown on Page 4 and will be discussed in more detail by Alessandro later on in the presentation. Let's begin by taking a look at our operational performance. Thanks to an extremely active and successful first half, our order intake in the first semester at EUR 2.3 billion has been the highest since 2018. In particular, last April, we had one of our highest months on record, with about EUR 2 billion in awards. These new projects mainly relate to our PetChem and oil and gas refining business, a sign of the strong resilience that downstream has enjoyed over the last few years. They are also geographically diversified, covering Africa, the Middle East and Asia, and have been granted by existing and new clients, a sign of the superior client retention skills that our group enjoys. Moreover, with a book-to-bill ratio of 1.7, we have significant visibility for 2021 and beyond. Considering the over EUR 600 million in acquisition announced this month, we have already reached our objective to replace the portion of the backlog, which will be converted into revenues by the end of the year with the order intake. Let us now look at the July acquisition in more detail. At the beginning of the month, we were awarded an EPC contract by Indian Oil Corporation. The project worth about $170 million is related to the implementation of a new polypropylene plant and product logistics facilities in the Barauni refinery in Northeastern India. The new plant will have a capacity of 200,000 tons per year and the time to mechanical completion will be 30 months. The new polypropylene plant will be part of IOCL, Barauni refinery capacity expansion project, which entails the installation of large grassroots units as well as revamps and upgrades to increase the capacity of current units. The Barauni refinery expansion project is part of IOCL's plan to meet the growing domestic demand for added value products needed to boost the country's manufacturing industry. This is the sixth project that we have been awarded by IOCL, a testament of our long-standing relationship with this important Asian player. It also reaffirms long-term client relationship as a key value of our organization and the true differentiating factor vis-a-vis our competitors. Finally, it is further confirmation of our leading position in PetChem and of our decade old experience in India, where Tecnimont has been present since the 1970s. In addition to the IOCL project, last Monday, we were awarded an EPC by Repsol for the Sines Industrial Complex in Portugal. The total contract value is approximately EUR 430 million. The project scope of work entails complete engineering services, equipment and material supply, installation and construction activities of a new polypropylene unit and the new linear polyethylene unit. Each unit will have a capacity of 300,000 tons per year. Project completion is expected in 2025. The technologies applied to both units will guarantee maximum energy efficiency and will be the first of their kind to be implemented in the Iberian Peninsula, making the Sines Industrial Complex one of the most advanced in Europe due to its flexibility and a high degree of integration. Moreover, this will represent the largest industrial investment in Portugal in the last 10 years, enabling Repsol's petrochemical expansion while creating sustainability, wealth and quality employment. In addition to cementing our relationship in Petrochemicals, this project allows us to continue playing a key role in oil and gas modernization, revamping and upgrading in order to help our clients to reach better environmental standards. Thanks to one of the highest order intake in the period, our backlog stands at EUR 7 billion at the end of June, 84% of this represented by gas monetization and energy transition projects, thanks to our ongoing presence in these areas. Europe continues to remain our main area of operations, but our backlog is widely diversified across various geographies around the world. Africa has gained in importance, thanks to the Port Harcourt project. 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. The E and the EP portion amounts to about EUR 1.2 billion or 18% of the Hydrocarbons backlog. This contributes to the derisking of our existing business, a very relevant factor in these volatile times. The backlog cover has created -- has increased to 2.6x, providing a very high visibility for the future. Following the recent acquisitions, the portion of gas monetization and transition fuels projects in our Hydrocarbon backlog is now 84% at the end of June. This is a reflection 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 in our current strategy and positioning now and going forward. Moving on to the commercial opportunities. Our pipeline stands at EUR 55 billion, stable in the last quarter. The stability of our pipeline in a quarter where we were awarded EUR 2 billion of new projects is a testament of the vitality and dynamism of the sectors where we operate. Moreover, the significant increase in the amount of projects, which are in the tender phase, is a very good sign that additional projects are expected to be awarded before the end of the year. The geographical breakdown shows a few changes in terms of geographical allocations, mainly as a result of projects being awarded and new projects entering the pipeline. The Middle East and CIS continue to be the 2 most important areas in terms of opportunities with Asia following suit. Overall, our pipeline remains extremely strong and geographically diversified, providing a solid support to future awards this year and beyond. Let's move to the Green Energy business unit. As our commitment to energy transition continues to increase, the development of green chemistry plays a key and growing role in group strategy. Also considering the ongoing evolution of European regulations, which through the Fit for 55 package have recently confirmed the European Union's commitment to renewable energies, biofuels and green hydrogen in order to achieve the 2050 emission reduction targets. As a result, we have continued to build our Green Energy business in the second quarter through a series of FEED awards and other agreements across our 3 areas of activity. First, we are implementing our green ammonia strategy developed by our subsidiary Stamicarbon, the worldwide leader in urea technology licensing. Based on this strategy, we are developing one of the world's first industrial scale plants powered by renewable energy to produce low carbon nitrates. The project will be developed in Kenya and will support that country's low-carbon and inclusive growth, replacing 25% of imported nitrogen fertilizer in the region, with a reduction in CO2 emissions of about 100,000 tons compared to a gas-based fertilizer plant. In terms of sustainable hydrogen, we signed an agreement with MYTILINEOS for an engineering study aimed at the implementation of a green hydrogen plant in Italy. We are also working with Paul Wurth to develop innovative low-carbon solutions, which integrate electrolysis and syngas to reduce the steel industry carbon footprint as well as decarbonization initiative in such a hard-to-abate sector. Finally, in the areas of biopolymers and sustainable fuels, we are carrying out 2 FEED projects at Grandpuits refinery in France on behalf of TotalEnergies and Total Corbion respectively. The first project aims at implementing a 400,000 tons per year sustainable addition fuel plant, while the second one is related to 100,000 tons per year of PLA plant, the first of its kind in Europe. In terms of Circular Economy, let me go more into detail about our current involvement concerning the green circular district model. The green circular district model that we have developed allow us to produce recycled polymers, chemicals, hydrogen and low-carbon fuels by recycling plastics and recovering nonrecyclable waste. It combines various technologies aimed at increasing decarbonization and recycling and reducing incineration and landfill targets. The model features an innovative application of proven and ready-to-use energy transition technologies through an integrated platform of Green Chemistry applications. These include our proprietary MyReplast, upcycling technology as well as the chemical recycling of plastic and dry waste and the production of green hydrogen. A key role is played by the waste to chemical technology, which transforms plasmix or the nonrecyclable fraction of plastic waste and RDF, refuse derived fuel, and recovering carbon and hydrogen using partial oxidation, which does not use combustions and produces circular gas, which in turn, is used to produce green chemicals and circular fuels such as hydrogen, methanol and ethanol. In Italy, we are developing 12 projects based on the waste to chemical approach aimed at recovering 3.1 million tons per year of nonrecyclable waste, avoiding about 2.4 million tons per year of CO2 emissions. These projects are located on conventional industrial sites using processes based on the use of fossil fuels, which would be replaced with circular renewable fuels, thereby lowering climate altering emissions. It is an environmentally, socially and economically sustainable solution. We are proud about these developments, which will contribute to speeding up energy transition and will provide a positive contribution in the fight against climate change. On our path towards long-term sustainable value creation has already brought important results during the past year, recognized also by rating agencies such as MSCI, which improved our score to A, and CDP, where we are recognized as a supplier engagement leader. However, our ESG agenda is still full of activities to be implemented and targets to be achieved to further enhance our sustainable footprint and our impact in the 14 SDGs we are committed to. On this slide, you can appreciate some of the main initiatives we are carrying out this year based on the 4 pillars of our sustainability strategy launched earlier this year. In terms of carbon footprint reduction, we are launching our Green Village project, which aims to develop a best-in-class model for a sustainable construction site, improving its environmental and social impacts. A few examples include using photovoltaic panels to lower energy intensity, reducing and recycling waste, improving socialization as well as utilizing the site facility somewhere else once the project is completed instead of disposing them. We are also developing an energy efficiency engineering project to improve the energy efficiency of the traditional EPC plant to be tested in a pilot PetChem plant. In order to reduce our carbon footprint and assess the positive impact of our green technologies on our customer submission profile, we are setting up a CO2 task force, engaging all the best internal technical resources. On the innovation front, we are enriching our digital suite through partnerships with leading players, including the agreement with Siemens for the development of the digital predictive maintenance services to improve plant operability and reduce maintenance costs and the alliance with Leonardo to deliver a next-generation industrial plant with a high level of digital cybersecurity and technology. In terms of support to local communities in India, we are engaged in a scholarship program with a local prominent technology institute, and we are developing a women empowerment project which promotes economic independence of women as a key enabler factor for gender balance. In addition, during the second wave of COVID-19, we supported local hospitals to face the oxygen shortage emergency and promoted vaccination drives. Finally, we continue to strive to maintain our industry-leading HES (sic) HSE performance, with the LTIR that was 2x better than the benchmark in the first half of 2021. Moreover, on June 23, we launched the Stop and Coach program in the first 2 construction sites. The aim of the Stop and Coach is to progressively increase the safety awareness and the active engagement of our construction teams to encourage everyone to act swiftly and carry out corrective actions as soon as something goes wrong or it is not in compliance with our safety rules for life. Dialogue and the participatory approach of our construction teams are the inspiring principles of the program. All these and many other activities have the common goal to create sustainable long-term value to all our shareholders and stakeholders. We will work tirelessly in order to achieve it. As we continue to push the Green Energy business, the commercial pipeline in the sector is also growing. At the end of June, we were pursuing opportunities worth about EUR 6.7 billion, up EUR 600 million in the first half. While a good portion of the prospects is European based, we have increased our international reach, starting from Asia and Americas. I now hand over the microphone to Alessandro, who will discuss our financial performance. I will be back to provide you with some final remarks. Alessandro?

Thank you. Thank you, Pierroberto. So our first half revenue grew 9.2% to EUR 1.3 billion. Such an increase is due to the new acquisitions starting to provide the positive contribution to our top line. This is especially true for the Port Harcourt project, which had benefited from the fact that part of the engineering work was performed in the first phase, which took place a year ago. Revenues are expected to continue increasing in the course of 2021 as the other acquisition will start to kick in. We continue to pay particular attention to our operating efforts in order to achieve superior returns, also making structural the benefits generated by some efficiency projects implemented in 2020 as part of the cost saving and efficiency plan in order to face the challenges imposed by the pandemic. As a consequence, our contract gross profitability has increased from 11.8% to 12.2%. G&As were EUR 41.1 million, up 13.3% (sic) [13.6%], also due to the strengthening of our organizational structure in West Africa in order to adequately support the operation for the recently acquired Port Harcourt project as well as the organization of our subsidiary NextChem in view of the expected significant growth of the Green Energy business. Finally, G&A benefited in the first half of 2020, benefited on the cost reduction following the beginning of the current pandemic. Our ongoing commitment to Green Chemistry continues to be demonstrated by a growing amount of R&D expenses, up 7.2% to EUR 4.1 million. EBITDA was EUR 80 million with a profitability of 6% in line with this year's guidance. Net financial charges were EUR 6.1 million, down EUR 15.9 million. Such an improvement has been driven by a positive effect in the valuation of certain derivative contracts as well as by higher amount of financial income generated by higher level of deposit, especially in foreign currency. The tax rate was 31.2%, in line with our historical average, considering that the geographies where the group has generated taxable income have not changed significantly over the last few quarters. In conclusion, the positive operating performance, coupled with an appropriate management of financial costs, led to a consolidated net income of EUR 36.7 million, up 94.1%, while group income was EUR 40 million, up 99.2%. Moving on to the balance sheet. Let's analyze the cash flow dynamics during the quarter. Our virtuous path toward a lower net debt and negative working capital continued in the first half of this year. We generated operating cash flow in excess of EUR 164 million, which was the main driver of the decrease in the adjusted net financial position from EUR 116.9 million to EUR 31.4 million, also thanks to lower net financial charges and despite of EUR 38.1 million in dividends, cash taxes of EUR 15.4 million, CapEx of EUR 13.4 million and purchases of treasury shares of EUR 5.5 million. The reduction in net debt in 2021 follows a remarkable decrease of EUR 228 million in the last 3 quarters of 2020, making the total reduction in the last 15 months equal to an impressive EUR 313 million. The operating cash flow generation in the first half has also been driven by the advances from clients related to the projects that were awarded to our group last April. As we commented several times, please remember that the performance of our net financial position during the year is driven by several factors, which do not necessarily take place every single quarter. Let us now take a look at the working capital dynamics. As you know, our goal for a continuous improvement in the net financial position eventually moving back to a net cash position goes hand-in-hand with our goal to improve and reach a negative working capital position. To this effect, and in parallel to our significant reduction in net debt, we have continued to also improve our net working capital which has decreased by almost EUR 260 million over the last 5 quarters, to EUR 29 million at the end of June. You should also remember that we also caution that each quarter or a series of quarters have their own dynamics in terms of working capital, depending on specific events taking place in the quarter, on the stages reached by the various projects as well as their integration into a consolidated position. Having said that, the net working capital in the first semester has benefited by the advances related to the significant order intake as well as the cash ins across several projects, including the 2 Amurski ones. This event more than compensated an increase in net work in process as projects continue to advance to their next milestones. Please consider that 50% of this increase is related to both Amurski projects, a dynamic, which is now very familiar to you and follows the natural and healthy evolution of these projects. We are happy about this continuous improvement, and we will continue to work in order to further improve our net working capital. And now I hand over the microphone to Pierroberto for his final remarks.

Thanks, Alessandro. In conclusion, we delivered yet another solid first half, showing a pickup in growth, which is promising for future expectations. We had one of the most successful first halves in terms of order intake, which will provide a solid foundation to 2021 and future revenues. Our Green Energy business continues to develop as new agreements have been signed and new projects started. At the same time, our strong commercial pipeline is expected to deliver new projects both in the traditional and in Green Energy businesses. As a consequence, we reconfirm our 2021 guidance of revenues in the range of EUR 2.8 billion and EUR 3 billion, a 6% EBITDA profitability and a close to breakeven net financial position at the end of the year. Our investment case remains extremely strong and compelling as we continue to build the road to a better and sustainable future. This concludes our presentation. As usual, Alessandro and I stand ready to answer any questions you may have. Operator, please go ahead.

[Operator Instructions] The first question is from Roberto Ranieri with Intesa Sanpaolo.

I have 3 questions, please. The first one is on backlog and the backlog mix. I've seen that you presented the slide with the 10% backlog for -- relating to the oil-based chemicals. I'm wondering if there -- there is only volatility in this kind of acquisition of new work in the traditional oil-related business or when it is a long-term trend, which we see a kind of decreasing progressively opportunities in this field, especially I'm interested in polyolefin. My second question is on the backlog and relating to again, backlog relating to more specifically on the Green Chemistry new order intake, and you have some -- several projects and several contracts in the Green Chemistry. I'm wondering when the execution of this project will be more material and finally, more material and will contribute more materially on the EBITDA. So basically, I'm specifically interested in net timing of the contribution of this contract on EBITDA. And my third question is on the prospect for the second part of the -- of this year. I know that -- we know that there is no linearity between the -- your new contract award in the first half 2021. I'm just wondering if you can just give a hint for an overall picture of the short-term opportunities and which can translate in your order intake in the second part of this year.

Thank you for your question. On the question on volatility in oil-related business, whether it is a long-term trend or if it will decrease in the future. My point is that what we are witnessing is a progressive shift from refineries from refining to PetChem. And this is something, Roberto, we have been telling around since a couple of years. So it is at least a couple of years that it's happening, and it's a couple of years that we are expecting and forecasting such a shift. What does it mean? It means that if you have an existing setup, you will tend to reorganize and reengineer your setup in order to have a layout that is weighing more, so it's pushing more in the oil to chemicals and less into the fuels. So this is the normality in a world that is expecting a contraction in the demand of diesel. So it is something that is progressively true. It will be there in the next years. Will it be there in 2050? I have no clue. But for sure, we see it as the natural strategy of an oil company that is acknowledging and contraction in the demand of fuels and diesel, in particular. So it's a kind of debottlenecking exercise, for example, whereby you maximize the throughput capacity of your ethylene and propylene to polypropylene and polyethylene. So this is the name of the game. And all our clients are at least looking into these debottlenecking opportunities. It is the world of -- then there is also the world of aromatics. So there are a lot of refining kind of byproducts and streams that can be converted into this kind of derivative, into aromatics. And aromatics means textile, means paintings. So it's a downstream world that has nothing to do with fuels and necessarily nothing to do with plastic itself. So this is where the traditional business is going. So it's oil to chemicals. Let me call this way. And to me, it is there already. It will be there more and more tomorrow morning and the future years. What is happening in the long term, it's a kind of a philosophic exercise, ideologic exercise, which cannot -- we cannot afford. The second question is about Green Chemistry. When the contribution of the Green Chemistry backlog will be more visible and material in terms of generation of EBITDA. Again, we confirm what we have been telling around since a while, the visibility in the backlog is the prerequisite for the visibility in the EBITDA. The engineering in the backlog is the prerequisite for the EPC lump sum expansion and amplification of the green business. So we are exactly there. So we are in a moment in which we are, as we said, ongoing several engineering jobs that are expected to arrive at the final investment decision upon the quantification of the CapEx, plus or minus 20%. So the next months will be the months in which engineering that is already in our backlog could possibly transform into EPC award. And that is -- that will be, to answer your question, that will be the moment in which the EBITDA will react accordingly. So as soon as the EPC -- the engineering will be converted into EPC, then you will have the critical mass to be more visible in the EBITDA. Timing of it, that is the other part of your question, is for sure 2021, the remaining part of 2021 and 2022. So as we said, we have a big expectation that also taking the wave of the European measures, money, recovery fund, this green acceleration could become more visible in the next 12, 18 months. The third question is hints and some flavors and colors about short-term additional order intake, if we can give more visibility. But we told in the recent past that Middle East is waking up again. So for sure, as I already told you, Qatar, it's an area of focus, and we have been already engaged and committed to serve Qatar with our downstream competitors more and more. For sure, we have -- we continue to have very good opportunity in Russia because Russia is the country of the downstream more and more. There is very strong incentives if you convert natural resources into derivatives. And all entrepreneurs, all big corporations are heavily working in the direction of the monetization of gas into derivatives. So that's why there is a big momentum over there. You know how much we are strong in debt monetization exercises and how much we are present in Russia. So this is for you, just to give you a couple of -- couple of hints for your curiosity and then consider that as of today, we are already in the region of EUR 3 billion, a little bit less than EUR 3 billion, which is at the end of the day, the amount of the macro indication of the revenues of 2021. So conceptually, we have already replaced the production of 2021, substituting it with an equivalent amount of order intake. So whatever comes on top of it, which means automatically incremental growth, organic growth and additional value.

The next question is from Massimo Bonisoli with Equita.

I have 2 questions. One is on your revenue guidance. You confirm basically the EUR 2.8 billion to EUR 3 billion range, which was issued at your 2020 results. And then you had a very strong order intake later on, which already contributed somewhat into second quarter results, if I got correctly. Do you believe that you have more visibility on the upper end of the range or, let's say, you can even beat that upper end of the range of the guidance considering the strong order intake? This is my first question. And the second question is on net working capital. If you can provide some color on the second half contribution of the remaining advances by the new order intake. And any indication on the net working capital direction into second half would be appreciated. I also appreciated the indication on the net financial position in your guidance.

Thank you. On the revenue guidance, let me simply indicate that the acquisition are not necessarily creating revenues in the same year in a visible and sizable manner. So obviously, the production is limited considering the first year, in particular, the acquisition that are not in January, let me say, or in February. And there is always the time of setting up the team, the time of switching on the machine. And then when the machine is working at the beginning, it's engineering hours. So it's by definition a slow start in terms of magnitude and visibility of volumes. So I wouldn't create a correlation between a very high order intake and revenues higher than expected. It's -- there are some overlapping, no doubt, but the correlation is limited. So that's why we simply confirm our guidance. You know that this quarter, we have produced something in the region of EUR 700 million, which means a progression, vis-a-vis, what we produced in the first quarter. This progression makes feasible the target of 208 -- sorry, EUR 2.8 billion to EUR 3 billion, if you simply consider kind of -- if you simply multiply and if you consider ballistically this trajectory. So that's the best guidance for revenue. So I believe they are credible and not because of order intake, but because of the increasing production of the second quarter which makes sense if you need to achieve your target. On the second answer, I would rather give the floor to Sandro.

Yes, Massimo, you know that net working capital in our world has a direct link with the net financial position. And first of all, I hope that you have appreciated that the strong results that we have delivered within the end of June, of course, is the first step because is in line with our expectation, is absolutely in line with the trend that we have foreseen for the entire 2021. The first part of the year, the cash flow generation has been for sure secured, thanks to the advanced payment that we have monetized on the project -- expressed by the project that we have secured in particular during the month of April. But of course, it is just one pillar of our strategy. Also, the other projects that are already ongoing have delivered significant cash flow, all of them in accordance with the expectations. So this is just the first step of our path towards the target that we have defined within the end of the year. For sure, what we can say that in the second half, we expect a more balanced cash flow because those projects have delivered more significant cash flow in the first half and will enter into the execution phase. And thanks to this phase, we will have to recognize to subcontractors and suppliers advanced payment to them. So even if we expect to -- that the cash flow secured by the project will continue in the second half, but there will be an absorption of cash in order to make effective to put in production the project that we have recently awarded. So all in all, will result in an additional positive cash flow, but for sure, more balanced compared to what we have achieved in the first half. This is the basis of our reasonable estimate of the breakeven in terms of net financial position expected by the end of the year and are compounded by an additional improvement in the net working capital.

The next question is from Francesco Sala with Banca Akros.

Just a couple of questions. The first one on the tax rate for the full year. It's running below the 2020 full year tax rate. So I wonder where the tax rate will end up at the end of the year and if you can give us an indication? And the second question on the main moving parts of the net working capital. There was a big draw already due to the work in progress in the first half. I wonder how this component is going to evolve in the second half of the year and also some indication on the advanced payment to suppliers in the second half of the year.

Talking about work in process or contract assets as they are represented in our balance sheet. You are right. Of course, a contract asset is one of the elements of our working capital. But as we have already stated in our presentation, a significant amount of the increase has been expressed by the 2 Amurski projects, both of them are going -- are progressing at full speed. Of course, please, I hope that you remember that in particular, as far as Amurski 1 is concerned, to the extent we are able to transfer work in process into invoicing to the client and then we get the money, we pay our subcontractor. So the increase in work in process is accompanied by the same situation in accounts payable. So just to say that the increase in work in process do not express any deterioration in our working capital taken as a whole. Also because I don't know if you have the opportunity to monitor how our working capital has evolved from December to June, it has moved in a positive way for more than EUR 50 million. So just to say that in order to analyze the situation, in particular, the working capital, it is not appropriate to look at just one of its components. This is as far as working -- the work in process is concerned. The second one, as far as our corporate taxes is concerned. Presently, we have delivered a sort of effective tax rate in the region of 31%. We are exploring the possibility to apply for some benefit introduced in our tax regime in Italy by the law which provide the rules for 2021 state -- financial statements, which makes possible to obtain some benefit. In such taking benefit of this possible improvement, it is reasonable to expect that the tax rate by the end of the year could be slightly lower compared to the present one, more in the region of 30% -- 29%, 30%.

[Operator Instructions] The next question is from Michele Baldelli from Exane BNP Paribas.

Just one question, which is kind of curiosity. If you were to set a minimum target for the order intake this year, where it would be? If you can share, if you feel confident.

When we go for the planning exercise, the minimum target is the amount of revenues we produce. So let me say the minimum target is already achieved. So that is the way we go for planning. Then we have, as I told you, we have a lot of opportunities going on. Certain opportunities are very hot. So we are not satisfied by definition, by design. But if you want to reason in terms of what is the floor, the floor is at least to substitute the revenues we produce.

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

Thank you very much for joining us, and thank you. Have a good evening.

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