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 Quarter 2022 Financial Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Alessandro Bernini, CFO of Maire Tecnimont. Please go ahead, sir.

Good afternoon, everyone, and thank you for attending the first quarter 2022 financial results conference call. 2022 has started very strong, and the first quarter has shown a solid and growing financial performance. Revenues, EBITDA, and net income all rose vis-a-vis the corresponding period last year. Similarly, we enjoyed a strong cash flow generation of about EUR 33 million, which has led to EUR 22 million in adjusted net cash. This is the 8th consecutive quarter of improvement in the net financial position. Our EUR 9.3 billion backlog continues to be extremely healthy and well diversified. And the group is not dependent on any single geography. A 3.1% backlog cover makes us confident about our immediate future. Our business drivers continue to remain solid as reflected in a commercial pipeline, excluding Russian prospects worth about EUR 52 billion. Finally, we are starting to reap the benefits of our investment in Green Energy with the new projects started leading to higher revenues. In conclusion, we are successfully executing projects while picking up the pace in energy translation. Before we discuss our operational performance, we would like to give you an update on our Russian projects. As you can appreciate, the situation has been and continues to be very fluid and evolving on a daily basis. That said, our general guiding principle from the very beginning has always been to ensure that our group is committed to complying with all applicable laws and regulations, including current and future sanctions. Based on the current framework, we started to scale back our existing activities in the country while working with both clients and suppliers alike in order to ensure a smooth transition. As a consequence, we are winding down the projects, which are currently affected by sanctions, considering that the Russian backlog has further decreased to EUR 1.1 billion at the end of April. At this stage, no economic contribution should be expected beyond the second quarter. That said and as we have been consistently communicating over the last few months, our project's financial position is and will remain in equilibrium, while all commercial activities had already been suspended. As such, the commercial pipeline figures that are shown in this document have been adjusted in order to retroactively exclude opportunities in Russia. Thanks to the strength of a record high backlog, however, the acceleration of several projects will compensate any missing revenues from Russia. We continue to monitor this evolving situation while keeping a constructive approach within a very complex legal framework. And let's analyze now our operational performance. We enjoyed a very strong start of the year in terms of order intake as we were awarded about EUR 633 million in new orders in the first 3 months. First quarter order intake in our industry tended to be on the soft side, as shown by this graph. Nevertheless, our new orders were above the average of the last 7 years. Moreover, the order intake in the first month is already at about EUR 1 billion, once the April awards are added to the account. We feel confident in our commercial prospects. As we shall see in a few slides, given the strong dynamics that continue to characterize our industries, both in our core business and in Green Energy. This will lead to additional awards in the months ahead. Let's take a look now at one of our most important Q1 awards in more detail. Last January, we were awarded an EPC from a new and aniline plant in Belgium by Covestro, one of the world's leading polymer companies. The project entails the realization of substantial additional aniline production capacity at Covestro's existing site in Antwerp, Belgium, which is its European hub for aniline. The projects includes all the necessary prerequisites to produce the final products, including raw materials, infrastructure, and product logistics. The contract has a value of approximately EUR 250 million and mechanical completion is expected by 2024. The new unit will be based on state-of-the-art technologies aimed at ensuring the highest standards in terms of process safety and energy efficiency. Aniline is an important starting material for a variety of chemical products, which are being employed across different application and sectors. This project allow us to leverage our technological know-how in petrochemicals and our commitment to the highest environment and process safety standards, an important component in energy transition. Our backlog has remained stable in Q1 and continues to be characterized by an overwhelming proportion of gas monetization and energy transition projects. The increase in Green Energy backlog is mainly due to the blue ammonia project in the U.S., which will be discussed in more details in few slides. Moreover, the order intake of the last 15 months has made the backlog even more geographically diversified than ever with an even split between the Middle East, Europe, and the remaining geographies. The diversification is extremely relevant in light of the current geopolitical events as we don't depend on any single country. Let's focus now on our 2 business unit, starting from our core business. The E and the E&P portion of the hydrocarbons backlog has remained stable at about EUR 1.1 billion or 13% of the business unit backlog. This continued to contribute to the de-risking of our existing business, a very relevant factor in these volatile times. The backlog coverage is 3.1x, providing a very high visibility for the future. Moving on to the commercial opportunities in our core business. Our pipeline has been in the EUR 40 billion to EUR 45 billion range over the last year. Please note, that from this quarter onward, we will be presenting these figures, excluding any Russian prospects in compliance with current sanctions. The last quarter has seen a significant increase in new initiatives driven by the resilience of our core business, strongly supported by our full business drivers. Such a positive environment bodes well for our group's growth prospects in the years ahead. Such an increase in new projects is taking place mainly in Africa and Asia, and on the back of continued investment in downstream assets. The Middle East also continues to remain an area of incredible opportunities driven by a new wave of downstream projects. Overall, our pipeline remains extremely strong and geographically diversified excluding Russia, continuing to provide solid support to future awards in the short and medium term. Let's move now to the Green Energy business unit and our efforts in the energy transition and sustainability. We are pursuing our sustainability journey with commitment and success. ESG factors are integrated into the objectives of our business development plan and into the organization of the group. In the first quarter, we achieved another important goal as Morgan Stanley upgraded our ESG rating from A to AA. Such a rating puts us at the top among our peers and Italian listing companies, and position Maire Tecnimont as one of the players, which lead its industry in managing ESG risks and opportunities. Direct in agency especially appreciated our best-in-class positioning in health and safety. Those policies extended to subcontractors and the effective supervision of their activities. Our anticorruption and business ethics policies with specific training programs for employees, which are aligned with best practices. In addition, innovation in clean technology are highlighted as a strategic development driver. Our successful journey continues as we keep on pushing our ESG goals. In this regard, we would like to invite all of you to go through our 2021 ESG achievements and future goals in the 2021 sustainability report we have released the last month and which is available in the Investor Relations sections of our website. As you know, supporting our customer in lowering their environmental impacts and be a leading enabler of the energy transition are key goals in our business model. In Q1, we continued to develop our Green Energy business, both in reaping our technological portfolio and signing new contracts to build up our backlog. In addition to the blue ammonia plant in the U.S., which will be discussed in more detail in the following slide, last quarter, we presented to the [indiscernible] region, the feasibility studies for 3 circular district projects and to the Sicily region on feasibility study, all based on NextChem Green Circular District Model. This project are part of the 12 circular district projects worth EUR 4.5 billion, which we are actively passing around Italy. The aim is to create a plant system where residual waste and rejects can be transformed into energy metrics such as recycle of carbon biofuels or into new polymers to be introduced into the production system, guaranteeing the closure of the end-of-waste process. The 3 districts, which will include a methanol hydrogen waste-to-energy plant, a waste to ethanol plant, and the waste to methanol plant. The total value of this circular district will be more than EUR 1 billion. At the beginning of April, NextChem completed the first Italian demonstration plant for the chemical recycling of PET and polyester form textiles as a part of the EU Horizon project. The plant is based on a de-polymerization technology co-license by NextChem. This innovative technology contribute to the solution of some still unresolved problems in textile waste recycling, such as mixed fibers. We are very proud to be involved in this project as we believe that this technology can contribute to improve a circular economy model on an industrial scale, also considering that the national system for the collection and the recycling of textile waste are beginning to be created in Italy and in other European countries in order to comply with the enacted legislation. On the renewable energy side, through our subsidiary, Neosia renewables, we signed an agreement with a French player to develop 9 photovoltaic plants in Chile for a total initial capacity of 80 megawatts. A concrete example of our growth in Green Energy is the $230 million EPCM projects for the implementation of blue ammonia in the United States that we have been awarded last March. The plant entails 3,000 tons per day blue ammonia synloop plus the necessary utilities and facilities. Project completion is expected in 2025. Blue ammonia is produced from hydrogen derived from natural gas, where the CO2 by-product is captured and sequestered to comply with the most stringent environmental regulations. In addition to the engineering and procurement activities, we will be responsible just for construction supervisor services as construction will be performed by an independent third party. Such contractual strategy is typically implemented in the U.S. to better optimize the construction activities and mitigate our risk while leveraging Tecnimont USA's expertise in managing construction activities and local content. Blue ammonia will be the feedstock for a separate ore, diesel exhaust fuel plant, which the same client awarded to our group last month, and that will be located on the same site, a perfect example of our client relationship skills. This award represents a concrete evidence of our strong positioning in the energy transition process. Thanks to our technology-driven value proposition. The United States represents one of the highest potential markets to break the eyes in industrial scale de-carbonization and blue ammonia is playing a pivotal role in the worldwide development of decarbonized value chains. Based on all the activities in Q1, let's take a look at where the commercial pipeline stands at the end of March. As we continue to push our Green Energy business, the commercial pipeline in this area keeps growing. At the end of last March, we were pursuing opportunities worth EUR 7.1 billion, up EUR 500 million in the first quarter. While Europe remain the largest geography, we are experiencing an increase in opportunities in other areas such as in Asia and especially, in the Americas. Let's analyze now our operational performance. Our first quarter revenues grew 16.4% to EUR 728.4 million. Such an increase is mainly due to last year's acquisition starting to provide a positive contribution to our top line. Revenues are expected to continue increasing over the course of the following quarters as new projects move from the engineering to the procurement and construction phases. Business profit was EUR 64.9 million, up 7.6%. Thanks to the revenues increase. The 8.9 margin -- 8.9% margin is in line with the full year 2021 figure and above the Q4 2021. G&As were EUR 19.2 million, a decrease of more than EUR 1 million or 5.1%. This remarkable achievement is due to our continuous attention to cost improvement across our organization. As such, minimizing the ratio of these expenses over revenues continue to remain one of our top priorities. R&Ds have remained relatively stable, mainly driven by our Green Energy expansion. EBITDA was EUR 43.7 million, up 15.5% with a profitability of 6%, in line with the previous quarters and with this year's guidance. Net financial charges were EUR 6.3 million. The roughly EUR 4 million difference is mainly due to the lower positive effects in the valuation of certain derivative contracts in comparison to the corresponding period in 2021. The tax rate was 30%, 110 basis points less, mainly due to the value such jurisdiction where the group operates. The expected tax rate for 2022 was substantially in line with last year's. In conclusion, the positive operating performance led to a consolidated net income of EUR 17.9 million and a group net income of EUR 18.4 million, up 1.5%. Moving on to the balance sheet. Let's analyze the cash flow dynamics. Our adjusted net financial position improved for the 8th consecutive quarter and now stands at EUR 22 million. Such an improvement has been driven by a healthy cash flow generation of almost EUR 33 million, and in spite of almost EUR 20 million in the outflows due to taxes, net financial charges, and CapEx. We expect this year this trend to continue in line with the guidance provided at the end of February. Let's now take a look at the working capital dynamics. Working capital has remained relatively stable in the first quarter. That said, please note that most of the individual components of the net trade working capital have been adjusted as a consequence of a change in the Amur 1 project. In short, and as explained in more detail in the interim report, our preexisting status as agent has been formalized at the end of last February. As such, we will continue to pay subcontractors as we always did, that is only to the extent that we received the cash inflows from the client on a back-to-back basis. The formalization of our pre-existing status also means that we do not bear the corresponding risk. As such, we were able to exclude from the balance sheet various amounts related to the work in progress, account payables, account receivables, and advances to suppliers and from clients. Current assets and liabilities have decreased by about EUR 618 million, while the change in the net working capital was neutral. The individual adjustments have been included in the interim report. The working capital dynamics in all the other projects have been normal relative to the stage of each individual projects. And now we can analyze our final remarks. In conclusion, the first quarter market, a solid start of the year, confirming a consistent growth pace. A record high backlog is providing a solid foundation to future higher revenues. Our Green Energy business continued to develop as the new projects have been awarded and started. At the same time, our strong and growing commercial pipeline is expected to deliver new projects both in the traditional and Green Energy businesses. As stated earlier in the presentation, our Russian projects are winding down in compliance with current sanctions and low contribution should be expected beyond the second quarter. As this happens, resources will be redeployed to other projects around the world, which will lead to their acceleration in comparison to the original schedule. The expected acceleration will compensate the missing Russian revenues. That said, due to the different phasing of the new projects, which will be advancing from the engineering phase to the procurement and construction phases later in the year, in comparison to the more advanced Russian projects, this will lead to quarterly ramp up in revenues, which are going to be higher in the second half of this year versus the first half. This allow us to reconfirm our 2022 guidance that was communicated to the market on February 25, namely revenues in the range of EUR 3.4 billion to EUR 3.6 billion and EBITDA profitability in line with 2021. And let me say, in line with the results released with the first quarter 2022, and then improving net cash position. Obviously, this assumes no major disruption from the current pandemic, and there are no material effect on the current geopolitical extensions to the economic and financial situation in the rest of the world. In spite of the unprecedented challenges that we are all facing, we feel we are in a strong position as we can leverage the benefits of a high and diversified backlog, driven by solid business fundamentals. So this concludes our presentation, and I stand ready to answer any questions you may have. So operator, please go ahead.

[Operator Instructions] The first question is from James Winchester of Bank of America.

Just 2 for me, please. Are you able to provide a bit of color on what you were expecting in terms of the Russian backlog phasing prior to the sanctions? And then the kind of EBITDA margins associated. My assumption here is that given that you progressed quite far on them, I would have assumed that they were above the 6% group EBITDA margin. And then the second part of this is, do you mind kind of explaining a bit more in detail about the moving parts on how you're maintaining guidance as well as stripping out Russia? And again, how are you kind of maintaining the EBITDA margins given you're kind of replacing end-of-life Russian projects with more kind of early cycle engineering procurement?

Yes. So I believe that we have already provided a quite comprehensive answer with our presentation. But returning to your question. When we disclosed the amount of our backlog for the Russian project, which presently is in the region of EUR 1.1 billion, we have already stated that this amount should have been performed in at least 3 years' time and even 4 years' time because some residual activities should have been performed at the 4th year. So it means that the contribution to every year was quite diluted over a quite a longer period of time. Considering them that in the first quarter, we have already delivered a certain -- the project has been progressed in accordance with the original schedule because sanctions affected our project only effective from April onward. So it means that as far as 2022 revenues are concerned, the missing revenues for the second half of the year, for sure, is a quite remarkable amount of money. But as we have stated, it is totally recoverable this amount with the contribution that we expect to obtain from the acceleration from all the other projects that are already ongoing. Since you may understand progressively, we are demobilizing our personnel from the various Russian side and readdressing them on the new projects. So this will contribute to make possible to achieve an extra performance in the current year compared to the original expectation. And this phenomenon based on our expectation and assuming no further deterioration in the general conditions, this will lead us to replace almost entirely the revenues that were originally expected to be generated from Russia. In terms of marginality, Russian projects where on average, able to deliver the same level of marginality as we expected from all the other projects in our backlog. So absolutely in line, which means that the margins, which were expected from Russian projects now will be delivered by those projects on which we are concentrating now our new efforts. In terms of what means in terms of cost, materials that we are incurring all those costs that we are incurring and will be incurred up to the suspension are completely in the hands of our clients. It means that we incur cost to the extent we are paid in advance. So we don't want to have any type of exposure. Of course, we have agreed with the client different payment terms compared to the original one because, of course, they have understood that we are operating in a different environment and cannot survive the terms, the conditions, which were agreed with the contract. So now we have agreed with them that we are ready, of course, to perform the residual activities on this project, but to the extent we are paid in advance. And this is the rule, which prevails today and will prevail up to the suspension of these projects.

The next question is from Kevin Roger of Kepler.

I will follow up on the impact from Russia, but more focused on, let's say, how can you accelerate the EPC of the overall project, please? Because I guess that there is a number of issues with the procurement, the materials, et cetera. So I was wondering if you can explain us how you can, let's say, increase the top line on those projects by several hundred million euros this year in terms of acceleration because that's quite rare in the industry. And the second one is looking at next year, I know this is early, but could you say also that basically the acceleration on those projects will offset also the missing revenue from Russia that you will see for next year, 2022, please?

So Kevin, in terms of how we can activate these actions aiming at compensating the missing Russian revenues, it is always quite simple because we are not talking the resources, which are progressively transferred from Russian projects to other projects. Of course, we are not talking about manpower. So we are not talking about blue collars. We are talking about engineering resources, which can accelerate the engineering phase of those projects, which has been recently awarded, and we've made possible to enter into the procurement phase even earlier than originally expected. Of course, you know very well that the engineering phase is not capable to generate higher volumes. But when we move EPC project into the procurement and then into the construction volumes, of course, are much higher. Our goal and our target is to accelerate as much as possible the engineering activities in order to be able to start to place the orders for the long-lead items and critical materials on those projects, which has been recently awarded, and I'm referring in particular to the super giant project that we have been awarded in the United Arab Emirates well as the projects that have been awarded in India or the projects which we have ongoing in -- we have been recently started awarded in U.S., both the ammonia one as well as the urea. So all those resources, so we are talking about technical resources, engineering resources will make it possible to speed up the process, the early -- the initial phase of the process making it possible to enter into those phases, which normally deliver higher level of revenues. And this is absolutely possible. We have already revised the schedule of those projects. And with the concurrence of these new resources, we are confident that, in particular, in the second half, as we already stated because it is a progression, is not from day or overnight, we can change the situation. It will be a progression, and you will assist a much higher progression in the second half of the year. Then as far as your second question. As far as you know, 2023 is concerned, Kevin, we are not used to extend our assumption to the next year. But however, since the backlog is so high, is at a record level, please be confident that also in 2023, we have no problem in order to secure an additional growth, considering, I repeated the higher backlog that we have on board.

The next question is from Massimo Bonisoli of Equita.

Good evening, Alessandro, 2 questions. One regarding the implication of financial position on the project in Russia, which are expected to continue to be balanced. Would you continue to carry those contractual values in the balance sheet and in the backlog going forward? So what will happen to those figures in the balance sheet? And the second, regarding your pipeline in Europe and North Africa, especially for polyolefin. Since Europe now is considering the ban on oil and potentially gas. Do you believe those measures will maybe jeopardize those projects since they will miss the supplies of gas and potential in NAFTE?

So as far as your first question is concerned, we will maintain in our backlog, this project, at least until when it will be possible, until when these projects are under suspension and are not terminated. So of course, we are monitoring every day the evolution of the sanction and to the extent it will be possible to maintain, to expect that could be to risk of in the future, we will maintain in our backlog. But if due to the sanction, due to the environment, we will be obliged to terminate, of course, in such circumstances, we will delete from our backlog the residual portion of those projects. As far as the balance sheet is concerned, of course, as you have appreciated, we have settled a lot of what were outstanding from Russia. We are continuing, maintaining our strategy to maintain a balance between inflows and outflows in order to maintain more or less no exposure vis-a-vis of such a country. MT Russia has a very limited amount of liquidity on board, which is enough to cover running cost. So all in all, the exposure that we have in the country from a balance sheet standpoint is close to 0 as we have stated, is very in equilibrium. So -- and we do not expect that this situation is due to changing the incoming future. As far as then your second question with reference to the opportunities that we have in front of us in North Africa, oil is a different story. We are -- our prospects were predominantly concentrated on the gas monetization. North Africa, in particular, Egypt, in particular, Algeria, both of them have, of course, great availability of gas, on top of that Algeria has to replace part of its gas production. And for this reason, we are, of course, interested in their prospects. As far as, in particular, the gas processing plant, gas separation plant, gas treatment plant, which, of course, is the first investment, the first installation, which is required immediately after having completed the upstream installation if you want them to monetize even for energy or for downstream purposes. So these are the prospects that we have in front of us in North Africa without excluding, of course, the monetization, the project that we have already almost secured in Egypt, which relates to an ammonia plant. Of course, this, due to the turbulence, which affected the financial market, the client has notified that will require some more time in order to secure the financial package. But apart from financing, the project can be considered already awarded. So this is just to say that we don't see any particular threat to our business, to our downstream business as a consequence of the phenomenon that you have mentioned.

The next question is from Emanuele Negri of Mediobanca.

I have 3 questions. The first one is again on Russia. And we see that in this quarter, you have some higher provisions for credit in Russia. What do you expect for the next quarter? Do you see some risk on higher provision for clients in Russia? The second one is about the asset you talked about in the press release on the net cash from mark-to-market evaluation on derivatives of EUR 3.4 million. I don't understand in the bridge you have in the presentation where this voice is included and how this relates to this bridge. And the third one is about the project you talked about and you had about on newspaper in Tuscany for waste technologies, which is the potential time conversion from pipeline to backlog of these projects? When we expect to maybe close it as backlog?

So if you are -- I believe that you are referring to our sentence in our report as far as some provision that we made in the first quarter as far as receivables are concerned.

Yes.

We are applying IFRS 9 regardless the counterpart if it is in a position to pay or not your receivable, you have to evaluate your receivable with reference to the CBS available on the market. And due to the present environment, some of them, even if I'm extremely wealthy because we are talking about energy conglomerates, privately-owned entities very wealthy, but unfortunately, they have -- the rating assigned to them has been lowered. And as a consequence, it is just the application of pure mathematical formula. We have been obliged because the rating has been deteriorated. But at the end of the day, we do not expect to suffer any loss from the monetization of this receivable. Then the second question was in respect of derivatives, if I well understood. Derivatives, in particular, as far as what we have in our -- of course, there is a difference between P&L and balance sheet. Of course, in the balance sheet, of course, we have the mark-to-market evaluation of those hedging contracts, which we have entered into in order to hedge flow of money denominated in different currencies. And the effect is recorded in the equity on one side. And on the other side, has affected our financial -- our net financial position at the end of March for an amount of close to EUR 27 million. And this is due predominantly to the hedging contract we have in place with between euro and dollar. Of course, please remember that to the extent the mark-to-market evidence, like in these circumstances and negative effect in equity and in net financial position, this means that when the financial flows, which has been hedged with this contract, this will result in a higher flow of money, which will neutralize this amount. So it is just pure temporary difference. As you know, we are obliged in accordance with the accounting standard to do this exercise, but from a suspension standpoint, you have to consider that to the extent that there is a lower effect than this will result in higher flow of money and vice versa. If there could have been a positive mark-to-market, it should have resulted in a lower flow money in the future. So this is -- you have to consider just a pure temporary effect, which will be recovered as soon as the flow money will take place. In the P&L, we have a negligible amount because it is associated to those hedging contract, which from an accounting standpoint cannot be considered to cover the risk, but can be -- unfortunately, must be considered like speculative contracts. But of course, the intent behind was to cover a risk. It is just a pure accounting recognition, which has expressed a negligible amount of money in the first quarter this year, whilst last year had expressed a much higher positive amount, and this is the reason of the difference in our financial performance comparing this quarter with last quarter. But please consider that the hedging contracts can generate only these temporary effects because it will be recovered then in the future when the flow money will take place.

The next question is from Roberto Ranieri of Intesa Sanpaolo.

I have 2 questions. The first one is on figures on financials. And very -- very quickly, a quick glance on the net income. Could you please give us the impact of the derivatives, the mark-to-market evaluation of derivatives? So please give us -- it could be very useful that to have also the net income -- the adjusted net income for Q1 '22 and Q1 '21, just to make a comparison on a like-for-like basis? My second question is on the future prospects. And I said that the other projects and other prospects will offset the [indiscernible] revenues from Russia. I'm wondering if in terms of costs, do you have any supply chain issue? Do you see any supply chain issue on the projects that you are executing abroad globally, excluding Russia?

So Roberto, as far as your first question is concerned, it's quite easy because the information has been detailed in our -- also in our press release. However, we can summarize together. We have stated that last year in the first quarter, first quarter has recorded a EUR 4 million positive coming from the Barco market of these derivatives. This year, only 400,000, which means that if we sterilize those figures from both results, this should and, of course, we have to apply the fiscal effect. This should have resulted in last year, bottom line, something close to EUR 15 million net income compared to EUR 17.5 million this year, so resulting in an increase of more than 10%. So this is the effect of the derivatives charged to P&L. EUR 14.9 million last year net income adjusted, excluding derivatives, EUR 17.5 million this year, excluding the effect of the derivatives. I don't know if I have an answer to your third question. Then as far as the difficulties on the supply chain, you are mentioning with reference to all the other projects that we have under execution. Of course, it is, first of all, it is useful to mention that, in particular, over the last 3, 4 years' times we have created a network of vendors capable with whom we have entered into special agreements with them, which means that today, in dealing with them, we have a sort of priorities compared to other contractors, to other operators. So I don't want to say that we don't -- we are not facing some delay in our supply chain, but it is extremely limited because, in particular, long lead items, critical items, which are needed in order to feed the projects are all of them on track have been most of them, in particular, for the project under execution has been already delivered on site. And for those projects which have only recently been awarded were -- and they have the engineering activities ongoing so far. So they have not yet entered into the procurement activities. This will be phased in the coming future. But let me say also another issue. It was more critical last year from, let me say, by the beginning of this year onward, the situation is more stabilized. Of course, there is, in particular, for materials coming from certain geographies, you have to pay particular attention, in particular, to the logistics, but not to the liability of materials. And considering the priority access that we have with certain vendors so far, all the materials, which were requested to feed our project has been purchased, delivered, and there are no particular problems associated with this issue.

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

Thank you very much. Bye, everybody.

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