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

[Foreign Language] Good afternoon, everyone. Thank you for coming. Thank you for joining us in our third Capital Market Day. It's a very important moment for us. Frame Forward, because our goals is the frame for the future. It's the frame for the future based on what we are doing today. We are ready to guide you through our strategic plan, a real journal journey with tangible steps. By the end of this trip, we want you on board with us. Today's presentation is going to be innovative, incorporating also artificial intelligence tools because we are considering critical to accelerate our growth and become more efficient. During this journey, we will show you 3 examples of how energy transition technologies can change our daily life. First, the hydrogen bike, don't worry. We didn't change our business. We didn't change our business. We don't want to sell bikes. These bikes need less than half a litre of hydrogen to rise 60 kilometres for -- with half a litre. This important new generation of the technology. This is just to show how many applications we see around the hydrogen in transportation from heavy truck to shipping and more. We know hydrogen very well. We have been realized hydrogen plants for the last 50 years. We have a technology and execution track record to produce, one, blue hydrogen from natural gas from -- with the carbon capture; two, circular hydrogen from waste; three, pink hydrogen from new generation on nuclear technology with a new partnership ongoing. And also, the green hydrogen from renewable energy. Speaking about the green hydrogen, we can pass to the second example. What you see here is the heart of the new electrolyzer, NX5 is the name, a system which will transform electricity into hydrogen, fully realized with our own proprietary technology. This is the first model, and we will scale up the industrial size in 2026. And now we would like to invite you to stop in Brescia at our upcycling plant. The plant is able to produce high-quality polymers starting from plastic waste to realize product like this scar component. There is an additional material, this is an example. Real substitute of the fossil-based virgin plastics. Our business model is not to be an operator but sometimes we invest in plant to validate and optimize our technology solution before to selling it. The plant is delivering good results. And thanks to that, we have sold the first license in Italy, and we are on the way to sell other abroad. A huge market in front of us. Detail will follow. This example help understand the range of application of Maire solution for decarbonization. We can do it because we are combined, the excellent execution skills of Tecnimont with a wide range of sustainable technologies of NextChem. This make us unique since we can offer an integrated end-to-end solution for our customers. Unique, thanks for our distinctive production mix, enabling to serve different energy transition needs across geographies and geopolitical scenario. Unique and proud of our 10,000 people. Thank you very much. Thank you all. Our growing network of engineering center. In Italy, we reinforce our footprint in Roma and Milano. And we opened the new office in Sicily with 200 engineers by 2026. In India, we have now more than 3,000 people in Mumbai and Delhi. The total workforce direct and indirect is doubled from 30,000 to 60,000 people. Thanks to all of them, Maire is the top 10% of the global ranking in the engineering companies and one of the leader in the specific region like in the Middle East. Unique because we have embraced digital revolution and artificial intelligence. In the E&C, we have now Tecnimont service for digitalization during the plant execution up to operation and maintenance. In the STS business, we have defined a new strategy aimed at applying artificial intelligence to chemicals processes. In both cases, we will also sell them an additional service to the third parties. Unique like our selective acquisition strategy to support further growth and that we are on track of our manager will explain to you. Last but most important way to be unique. Our sustainability journey. Today, we have published our ESG data according to the European directive. We confirm 2029 target for carbon neutrality. We reduced with the reduction of the 37% of the Scope 1 and 2 emission in 2024, great achievement. Regarding the Scope 4, with a proprietary methodology technology, now we can measure the emission avoid, thanks to our technology. In 2024, about 700,000 tons of CO2 were avoid, almost like the emission produced by 150,000 cars in 1 years. We have continued to push in diversity and inclusion, reaching the goal of 20% of the female manager appoint on the board member in the group companies. We are preparing Maire's future management through our flourish program, involving over 150 young professional in 2024. Thanks to our goal of the CSR project, we have produced a positive social impact with over 15,000 people involved in the local communities where we operate. That's why Maire is unique. The achievement result and the target that we have in front of will be able us -- enable us to bring technology home. Coming back to the root of the our industry, to the great Italian chemistry pioneer, Montecatini, which combined technology and execution skilled in the last century. We are proud to bring Italy chemistry to the world again to serve the energy transition. This is our goal along our strategic plan, like a new Montecatini in the third millennium. And Alessandro, the floor is yours. Thank you.

Thank you, Fabrizio. Welcome to everyone. I am really honored and pleased to see so many of you here in Milan, and thanks to all those joining us online. So, 2 years ago, at our first Capital Market Day, we shared a bold vision, an organizational model designed to shape our strategy for the future. In the meantime, NextChem has been building an exceptional portfolio of low-carbon and circular technologies, while Tecnimont continues to lead the way in the downstream project delivery. This is our moment. This is our moment. Our strategy is working, and we are making a real impact. Our business model stands out for its dual exposure, balancing today's conventional markets with the secular growth trend of decarbonization. The strategic mix not only strengthened our positioning, but also diversifies revenue recognition and profitability dynamics. Under the NextChem umbrella, we sell proprietary technologies and equipment to a growing global client base. Revenues are recognized in a short period and profitability is strong. Meanwhile, our integrated E&C solutions business provides engineering, procurement and construction services in projects with a longer time frame, ensuring predictable revenues. With this robust foundation in place, let's take a closer look at our 2024 financial results. Our growth story continues with a strong momentum. And in 2024, we delivered our best results ever. Over the last 2 years, we have consistently delivered a strong top-line and an increase in profitability that is more significant as we move towards the bottom-line. In particular, in 2024, group revenues increased by over 38%, reaching nearly EUR 6 billion, in line with the guidance. The top-line growth was matched by a 41% increase in EBITDA, reflecting steady progress execution and the benefits of operating leverage. Profitability followed, driven by a combination of an asset-light business and an efficient financial management propelling our net consolidated results to EUR 212 million. The effectiveness of our strategy is also evident in the strengthening of our balance sheet. Thanks to a strong operating cash flow generation, coupled with our usual financial discipline and our working capital management, we have plenty of resources to continue investing. In 2024 alone, we spent around EUR 92 million, primarily to acquire technology companies. Additionally, we strengthened our engineering capabilities, reinforcing our position in Italy and in Eastern Europe. Our net cash position has further improved in 2024, and it now exceeds EUR 375 million. This allow us to seize future growth opportunities. On the back of this outstanding performance, we have progressively increased our dividend payout. Today, the Board of Directors has resolved to propose a dividend distribution of EUR 117 million, up 81% on a per share basis, while the payout ratio went from 50% to 55%. Looking ahead, our backlog provides the clearest insight into the trajectory of our business. Over the past 2 years, we have secured a robust and well-balanced portfolio of projects structured with the right condition and execution pace. Our average book-to-bill ratio stands at 1.5, underscoring our ability to support growth over time. Moreover, an average backlog cover of nearly 3 is a tangible sign of the revenue visibility that our multiyear project is providing. Importantly, around 60% of our backlog is related to transitional and sustainable projects. Having said that, the first 2 months of 2025, have bought over EUR 3.5 billion in new awards across several and new geographies, providing an additional solid support to this year's orders intake. The delivery of our backlog is supported by a top-notch technical expertise, and we have been proactively strengthening our capabilities. Since 2023, we have started expanding our workforce, anticipating the rising demand. Over the past 2 years, our headcount has grown by more than 50% to nearly 10,000 people. Looking ahead, we expect growth to continue at a pace which reflects the benefit of an increased adoption of artificial intelligence. And we will continue to not only hire, but also maintain the best workforce in the industry, thanks to the constant training to enhance the competencies of our people. Women and men who with their dedication and passion stands as the driving force of what we are sharing with you today. We are at a pivotal moment in the energy and chemical scenarios. While global population and GDP growth will continue over the next decades, geopolitical and regulatory shifts are driving changes in investment and consumption decisions. As a result, our clients are evolving quickly, adapting their business models to innovate, diversify energy sources and tap into new markets. A key example is oil, which once used predominantly for fuel is now being increasingly utilized in higher value applications such as producing performance polymers instead of being burned. This dynamic environment while challenging, present significant opportunities that we are well-positioned to seize. If we take a closer look at where we stand in the current spending cycle, a clear pattern emerge. After years of pandemic-driven disruption and geopolitical conflicts, we have entered a phase of significant investment in the energy sector. This wave is the result of structural shift. Over the coming years, we expect capital deployment to remain strong with an increasing focus on gas and resource monetization and the production of sustainable fuels. At the same time, global energy demand continues to rise, driven by economic expansion, especially in the emerging markets. These regions are eager for development, striving to rapidly industrialize and take on a leadership role. This investment cycle is built for longevity. It is here. It is here to stay. And now I will hand over to Giovanni Sale, who will explain the opportunities that this scenario is creating for Maire.

Thank you, Sandro. Thank you so much, and it's a great honor to be here in our Capital Market Day to, let's say, describe the scenario and what is the opportunity. First of all, a very good afternoon to all of you. I'm excited to share with you what drive us at Maire. Our ultimate purpose is to address the 3 fundamental forces that shape all our world: feed, move and make. As the global population continues to grow, the demand of resources to feed, move and make increases exponentially. At the same time, the urgent need to cut emissions requires a change in the industrial paradigm. In this scenario, we operate to make the often-misused concept of energy transition in a reality. This means to diversify the production of molecules, materials and energy electrons. Let's begin our journey by exploring how we pragmatically address these needs. Make mean material. The historical for us means polymers. The annual production of virgin plastic is projected to exceed 730 million tons in 2040, almost double today's value and only 10% recycled today. This accumulation of plastic in our environment is a constant and a visible reminder that we face every day. It's an experience that all of us had already had several times. At Maire, we have been addressing it for several years now. Our commitment to boosting circularity is demonstrated by our recycling facility in Brescia, as mentioned by our Chairman, Fabrizio, a few minutes ago, and we are honored to have a vision of Fabrizio moving towards such a circularity. And it's enacting from Brescia where that truck starts its journey to our clients. This is just the latest chapter. I mean, this is just the latest of what of our book we have been writing since the '16 on how to master polymers. We were, in fact, pioneers of the industry. We root bringing back to the Nobel Prize winner, Giulio Natta, the inventor of the polyolefins, which now make up more than 60% of the global plastic market. Building on this heritage, we became the global leader in designing polyfin production facility, delivering hundreds of these plants all over the world. And we have always been doing it with the goal of pushing innovation. An outstanding example is that is the innovative plant, that Tecnimont designed for ExxonMobil in Texas, which now produce a new type of polymers, able to enhance the capability to recycle plastic. This is innovation. But this is just one piece of the puzzle, and this is not enough. We are not stopping here. We need and we are accelerating circularity. This includes treating plastic as a viable feedstock with its own unique properties, originating from its previous lives. It could be a bumper, a tube or a bottle of soap. Through our NextChem with last technology already mentioned by our chairman, we enable our clients to achieve top quality results. And you saw the example shown out of this auditorium. And this is what we get to achieve our top quality. Our truck now is coming back to Brescia, full of plastic waste that we collected from the different sources, and we closed the circularity loop. This is what we pragmatically do at Maire. We call it upcycling. We design recycled product around the customer need, around the customer requirements. So let me say, well done mate or well-done mate, they will say in England. Let's move on. Feed and move. The world population is set to reach 9.7 billion by 2050. This will fuel a demand for food, which is expected to increase by 30%. At the same time, bear in mind that the agricultural sector accounts for 20% of the global emission today. But alongside the population increase, we will also continue to face a significant rise in power demand, driven by electrification and the so famous artificial intelligence. By 2050, we'll need 70,000-terawatt hour of power. Bear in mind, 3x, threefold increase compared to what the entire planet consumes today. So, the only way to overcome these challenges is through the diversification of energy sources. And how is Maire approaching it? First, we are working with the manager -- the major energy company to minimize the environmental impact of the fossil resources. Bringing to life the least carbon-intensive production plant worldwide. The most tangible example is the Hail and Ghasha gas treatment plant that we are now constructing in Abu Dhabi. Now, leveraging on our expertise to master the gas validization and the low-carbon technology we own -- NextChem own, we are ready to introduce the next generation of sustainable energy vectors, two famous names, methanol and ammonia. These emerging solutions hold huge market potential. But our plan goes further. We aim to raise the bar towards a future where the recycling of CO2 become an industrial reality, not just a pledge, transforming this pollutant into a viable resources. You know CO2 is inert. It's a lazy molecules. It requires energetic hydrogen to activate it and transform it back into active molecules. It is critical, though that hydrogen is delivered via renewable electrons to produce the so-called e-fuels. This is coming, and we are working on it. But again, we have a big challenge in front of us. We need a reliable cost and a sustainable source of energy. And here is our vision of the e-factory for chemistry. What is e-factory for chemistry, is a fully-integrated chemical plant powered by new generation of small nuclear reactor reprocessing nuclear waste in line with what we call already NextChem vision of circularity. This will be the engine to deliver clean electrons to the downstream chemical industry ecosystem. The integration of NextChem technology with this nuclear plant will be the ultimate lever to deliver carbon negative and affordable molecules. This is an ambition plan. And this ambition plan will be transforming into real asset by Tecnimont, our execution arms. We are already taking real commitment to make it happen. We are not just doing pledging. Starting from our agreement with Newcleo. And I'm honored to share with you the last thought I had with Stefano Buono, Co-Founder and CEO of Newcleo. Stefano Buono, it's a pleasure to be with you. So, we started our journey to deliver our e-factory for chemistry. And now with our cooperation with the NextCleo joint venture, we are cooperating to design and to industrialize a nuclear power plant based on your amazing nuclear reactor, let me say, a plant nuclear inside, and thanks for cooperation and with Maire Group, we can make it happen. I'm truly convinced that we are spending out in the energy sector. And I really want to know from you what's the next step, where we are going?

Well, the next step is to create a company, a joint company that will actually operate on our reactors as a main activity, but that will also address a big market. I remind you that the nuclear sector has been suffering of inefficiency in the execution of projects. So, what we want to achieve is to get your operational ability to conclude project on time and on budget. Together with our nuclear know-how and bring this experience to the market, not only to our own reactor.

That's great. That sounds great. But I'm also truly convinced that your reactor has a really peculiar characteristic within the concept of the circularity. Let's expand, because I'm so fascinated about that.

Yes. We are, let's say, closing the fuel cycle. which means we can use multiple times the same fuel that has been used in the nuclear reactor. And this expands the possibility of nuclear in a very specific way for Europe, means hundreds of nuclear independence of energy independence because we have a lot of material from the previous operation of the nuclear reactors to deploy in our fleet. But the other characteristic of the reactor, I remind you, are the safety, intrinsic safety. So, no possibility to have any accident. And this is very important if we have a factory and we want to be everywhere in the world. because we don't have exclusion zone around our factory.

Yes. Yes, Stefano. Thank you so much because we do believe that our e-future vision, it's what our planet needs to have the least carbon intensity energy and serving the market with the right products. So, I'm so proud to this, let's say, process.

Very excited too.

And see you soon. [Foreign Language] Stefano. Thank you so much for your time. So, thank you, Stefano. I would say, so we made this thing happen. We are no over pledging. We are doing things every day. Well, our world is full of exciting challenges. Isn't it Fabio, who is my friend?

Indeed Giovanni. Thank you. Good afternoon. Good afternoon, everybody. It's a pleasure to welcome you to my first Capital Markets Day as Managing Director of NextChem. Are you ready for the future we want to see? [Presentation] We dived into emotions. And now let's go through the numbers for NextChem. 2024 has been another strong year. We have doubled our results compared to 2022, consistently meeting our targets. Revenues have ended up at EUR 358 million, and we are maintaining a best-in-class profitability. Our backlog has surpassed EUR 330 million spread across a diverse product offering, further strengthened in the first 2 months of 2025 by new awards for EUR 65 million. This is proof of the strong market appetite for our technological solutions. Let's see how we are making this possible. NextChem's value proposition is built on 3 key pillars. First, our extensive product offering, which we continuously innovate. We rely on more than 30 proprietary technologies delivering results today, and these are protected by almost 2,500 patents. This portfolio is made of versatile technologies, which enable the production of several commodities using different feedstocks. This flexibility is a strong competitive advantage in a scenario where reaching net zero calls for a multitude of solutions. Second, we leverage on our superior capabilities to tailor the process scheme to the unique challenges of each project. By combining these strengths, we deliver end-to-end economically viable solutions. This approach is exactly what our clients seek and more than 60 awards in the last 2 years are a clear demonstration of our success. These awards are spread across the 3 core segments where we are active. Our 3 business lines are designed to address the key forces Giovanni mentioned before. First, we have sustainable fertilizers, which embodies the commitment to feed the world, minimizing the environmental impact. Low-carbon energy vectors reflects our mission to move the world, supporting the transition to cleaner transportation and energy systems. And circular solution emphasizes our goal to make materials and promote recycling to maximize resource efficiency and reduce waste. Let's now see how these 3 markets behave in more detail. Fertilizers. This established market is entering a transformative phase. The increase in end-products is expected to lead to over 150 new plants being built by 2040. But growth must go hand-in-hand with sustainability, and the industry has committed to cutting emissions by 70% by 2050, a bold challenge. With our leadership in urea technology, the most widely used fertilizer, we increase energy efficiency also by increasing and upgrading existing plants and enable new sustainable products, particularly ammonia, as Giovanni mentioned to you. Let's discover ammonia more in detail. [Presentation]

Could ammonia be part of the solution to climate challenges? The global population is growing and replying more and more on fertilizers for food security and ammonia is one of the crucial building blocks for fertilizers production. A chemical made up nitrogen and hydrogen that supports nearly half of global good production. However, traditional ammonia production is energy-intensive emitting 1.8% of global CO2 emission. A possible solution? With our technologies we can produce low carbon ammonia. How? Starting with natural gas. By capturing CO2 using our proprietary technologies for low carbon hydrogen which is a key ingredient for ammonia production or from sunlight, air and water through our [indiscernible] green ammonia. This technology extracts nitrogen from the air and produces hydrogen through water electrolysis powered by renewable sources like wind and solar. But there is more. Ammonia can also be used as an energy vector making it a potential clean fuel for power production. As both precursor of fertilizers and clean fuel, ammonia is a game changer in a transition to low-carbon economy. At NextChem we are making this transition happen. It's low-carbon viable and future proof. It's ammonia.

Sustainable aviation fuel and methanol are set for significant growth, both projects to expand at over 30% annually from now to 2040. We are clearly talking about fuels now. At the same time, ammonia is expected to be and to emerge also as an energy vector. All these products are made from hydrogen, another exciting market. This increasing end markets is anticipated to lead to over 900 new plants by 2040, a significant opportunity for NextChem's technologies. Our solutions include low-carbon fuels via gas valorization and conversion of waste and biomasses into fuels through gasification technology like our SAF projects in the United States with DG Fuels. As we expand our portfolio, we are also positioning for e-fuels. Let's now have a closer look at methanol, another molecule Giovanni mentioned, we think will play a central role in the short- to medium-term. [Presentation]

Could methanol be part of the solution to climate challenges? Container shifts are essential for global trade. So far they have been running on marine diesel producing around 3% of global greenhouse gas emission. A possible solution? Using low carbon methanol as an alternative to marine diesel. But what is methanol? It's a simple molecule made of hydrogen, oxygen and a single carbon atom that can be synthesized from renewable sources. Upon production and combustion methanol properties results in significantly lower emission than marine diesel. But today most methanol is generated from natural gas or coal in a way that impacts greenhouse gas emission. With our technologies we can make methanol low-carbon today. How? With our NX circular technology starting from biomass feedstocks or municipal solid waste including biogas, agricultural residues, organic waste or dedicated energy crops, or with our NX methanol suite from low-carbon hydrogen. Thanks to both solutions we can produce syngas, an intermediate product, a mix of hydrogen and carbon monoxide. And from syngas we can synthesize low-carbon methanol a sustainable fuel compliant with chemical. Methanol is already available at over 104 worldwide facilitating the marine industry transition. At NextChem we are making this transition happen. It's clean and economically viable. It's methanol.

Let's move to the third one bioplastics. Mechanical recycling is a reality today, while chemical recycling is projected to grow by 20% annually from now to 2040. Bioplastics are also gaining momentum to reduce the environmental impact of polymers. The increase in bioplastics and recycling is projected to lead to the construction of over 800 new plants by 2040. Our portfolio includes solutions from high-end efficiency virgin polymers to biodegradable plastics. Furthermore, we offer a best-in-class mechanical recycling technology, and we are securing a strong position also in chemical recycling. In summary, our portfolio is extremely flexible to meet the market's ever-evolving needs. Let's now look at the engine, which is fuelling this growth. At NextChem we implement a pragmatic business-driven approach to technology development. We start from proven concepts, meaning technologies equivalent to a technology readiness level or TRL of at least 5 and scale them up to industrial level. To optimize our returns, we focus on making the right acquisitions based on market maturity. We want to secure our positioning in early-stage markets by allocating a portion of our M&A budget and then internally developing the technology. At the same time, we acquire market-ready technologies that serve established segments. Once in our portfolio, we make them flourish through our engineering expertise and Maires' commercial reach. Here, we allocate most of our investments. This approach not only increases the probability of success, but above all, it reduces the time to market. And this is not just theory. Less than 1 year ago after the GasConTec acquisition, we were -- so 1 year after the GasConTec acquisition, we were awarded the licensing for Mexinol, the largest single carbon methanol facility under development in the world, and more is under negotiation. This is proof of the effectiveness of our model. Let's now see two examples of our strategy to secure NextChem's position in less mature segments. A key trend we are embracing is green hydrogen. Thanks to the expertise acquired through HyDEP, we are developing our own electrolyzers, module of which is in that room, and expect to bring our 30-megawatt module to the market by 2026, as Fabrizio anticipated before. The prototype of the cell, again, is at your back. Another example is chemical recycling. We have entered this segment through the acquisition of MyRemono back in 2023. And in 2026, we will complete the first reference plant that will be able to recycle Plexiglass. And the next step will be to extend this application to polystyrene, a much wider market. By doing this, a single technology will become what we call a technology platform, enabling us to serve various customer needs with one solution. So let me wrap things up. We have seen the key value drivers of NextChem to lead in the energy transition. Number one, the huge market potential. Number two, the wide technology portfolio; and number three, a pragmatic approach to technology development. These drivers are essential for NextChem's future, and we believe it will be the future you want to see. And the future is also about delivering more innovative and sustainable plans. Sandro, the stage is yours.

So now we turn to Tecnimont where our execution capabilities are deployed with varying vision. [Presentation] So, now we cannot do anything else other than flying into the key figures of our E&C business. So, the past 3 years have been a period of significant growth with the large-scale projects fueling a substantial increase in our backlog. Our EUR 13.5 billion backlog as of the end of 2024 has been further strengthened by the EUR 3.4 billion of new project awarded in the first months of 2025. This has led to stronger revenues and higher EBITDA. In 2024, we reached EUR 5.5 billion in revenues and an EBITDA exceeding EUR 300 million. Profitability has also increased driven by operating efficiencies. This success is built on two clear competitive advantages. First, cutting-edge engineering and construction services, enabling the delivery of efficient large-scale plants to our clients. Second, operational excellence driven by selective and robust project criteria. Building on these strong foundations, our integrated E&C companies have established a unique track record, which secured us a leading market position in an industry with extremely high barriers to entry. At Tecnimont, we offer the full spectrum of EPC services, designed to optimize the execution and plant performance also through the application of cutting-edge digital solution. We start with FEED studies to ensure cost predictability. Through detailed engineering, we provide high-efficiency tailored design. Our procurement ensures timely delivery of quality materials, while construction focuses on cost efficiency and schedule reliability. After delivery, Tecnimont services provide predictive maintenance and performance tracking to maximize productivity. Furthermore, we upgrade and revamp existing plants to improve their efficiency and carbon footprint. Each of these activities contributes to our revenues and profitability under a business model built for sustained long-term value. Finally, we integrate NextChem technologies for those clients looking for a one-stop shop solution. Integrated projects offer our clients the perfect combination of state-of-the-art technologies and the seamless guarantee of plant deployment and operation. Moreover, when project development expertise is needed, we leverage on our method development arm, a pool of experts in project financing, structuring and public grants. This allow us to provide a comprehensive 360 degrees offering to our clients. Additionally, we have the option to put our skin in the game with selected equity stakes in certain initiatives. This commitment is the proof that we are fully invested in the success of the technology and the seamless implementation. Our investment approach is grounded in clear criteria. First, we ensure both of our proprietary technologies and the PC services are at the heart of each initiative. We always partner with industrial leaders who bring the essential feedstock and the offtake agreements. We focus on taking minority equity stakes, and we welcome to involve infrastructure funds to reduce the final stake. Our strategy is designed for value creation, and we typically foresee an exit within 2 years, more or less 2 years after project completion. All these criteria have been applied to the development initiatives, so we are currently pursuing with our partners, such as FertigHy in France for low-carbon fertilizer, Tripatra in Indonesia for a bios and ENI in Italy for a circular methanol. When it comes to profitability and delivering projects successfully, one word defines our approach, which is selectivity. Every project undergoes a rigorous internal evaluation, factoring in market condition, local environment and past lesson learned. Where we have deep expertise and strong local partnerships, we execute under lump sum contracts. Otherwise, we opt for reimbursable models or focus only on engineering and procurement. In today's volatile landscape, we embed cost escalation clauses and transparency mechanism into our contracts, ensure that our profitability targets are met. Our engineering excellence has always been our flagship service. With over 8,000 technical professionals working across our global hubs, we stay close to our clients and local counterparts. Every plant we designed is built for top performances, integrating the best available technologies. We are also at the forefront of artificial intelligence adoption. Following a human-in-the-loop approach, we are transforming our processes, enhancing quality and efficiency. When it comes to project delivery, securing supplier capacity is the key, especially in an environment exposed to logistic disruption. Our global network of qualified suppliers built over decades ensure diversified and reliable sourcing. We are continuously working to expand our supply chain in key regions, not only to secure materials in a cost-effective way and reduce the carbon footprint, but also to meet local content requirements. Collaborations starts early by engaging suppliers from the bidding phase. This allow us to enhance project predictability, mitigate inflation exposure and prioritize responsible partners who share our commitment to excellence and ESG approach. Finally, construction, construction management. We work with the trusted subcontractors who build under our coordination ensuring safety, quality and efficiency at every step. Their skills are continuously enhanced through our training programs. To optimize the execution, we also prioritize solutions able to minimize on-site man hours with an hands-on approach, ensuring seamless delivery, and above all, safety. Safety is the priority. That's why I am pleased to hand over to Maria Selli, our HSE Senior Vice President directly from the field. Maria, the field is yours.

Thank you, Alessandro. Today, I'm speaking to you from the Apo site in Al Jubail, Saudi Arabia, where we are completing the construction and the commissioning of the polypropylene plant and product handling. This is a project that has engaged 3,500 people. Most importantly, this is a project where we have achieved more than 21 million safe work hours without any recordable injury, a remarkable milestone that we are immensely proud of. Allow me to give you just 2 figures from 2024. Our lost time injury rate is 4.5x better than [indiscernible] mark and 56% better than our last year's results. We have delivered more than 4.1 million training work hours on our sites in 2024 with a 70% increase compared to 2023. After years of sites and projects, I have seen firsthand that safety is not about procedure, it's about people. Humanized HSE means ensuring that every person in our sites feels prepared, respected and empowered to make the right choices. That's what leadership in health and safety is truly all about. Alessandro, back to you.

Thank you, Maria. Maria is a giant. Once again, I say the numbers speak for themselves. Now let's take a moment for an exciting update on the Hail and Ghasha project, the landmark gas treatment plant in Abu Dhabi, which is advancing with a great momentum. To bring you closer to the action, I hand over to our Project Director, Stefania Taraschi, live from the site.

Thank you very much, Sandro. Well said, I'm proudly here on site in the middle of that plant area I told you last year, the 4 square kilometers equivalent to about 500 football fields. Today, a year later, we are well on track with the schedule at 70% reached as an overall progress. This is the result of the excellent work of our colleagues in Italy, India and UAE. More than 1,500 people dedicated to this project were working side-by-side with the client and the suppliers to ensure a project delivery in line with the standards of excellence that distinguish Tecnimont. Engineering activities are progressing as planned and, in some cases, ahead of the project targets, 48% completed. Procurement reached 74% progress with all orders awarded for long lead items, mostly all components and part of the bulk materials. Manufacturing activities are in progress with an overall advancement of 12% and first shipment of capture and piping have been delivered to site. We are maximizing the adoption of modularized solution and precast items in order to minimize the effort at site and speed up the construction. And construction is progressing with all subcontracts awarded mostly to local companies in line with our in-country value targets. Key activities include foundation, elevated structures and precast direction for the pipe rack, the backbone of the plant and the temporary facilities such as warehouse, offices and accommodations. Overall progress stands at 4.5%, but the achievement we are most proud of are the 5 million work hours achieved in December. And now back to work as we at Tecnimont know how to do with patient and determination towards the goal. Sandro, back to you on stage.

So then in addition to Hail and Ghasha, all the other projects in our backlog are progressing rapidly. 2025 is set for a strong performance with approximately 40% of our 2024 E&C backlog slated for execution. Looking ahead to 2026 and beyond, we start with a solid visibility, which is being increased by the new projects which were awarded to us. And taking about awards and opportunities, in 2024, our group commercial pipeline has increased by EUR 2 billion to EUR 58.5 billion, reflecting a strong demand across key markets. With such a strong pipeline and increasing momentum, we are well-positioned for the next wave of growth also in new geographies. In particular, this year, we expect new orders for around EUR 8 billion, of which EUR 3.5 billion have already been secured in the 2 months of the year. As usual, the timing of awards is in the hands of our clients. But rest assured, fundamentals remain strong. So, stay tuned. So, these fundamentals are at the basis of our 10-year plan. Starting from the 2025 guidance, we are set for another year of solid growth. Group revenues are expected between EUR 6.5 billion and EUR 6.6 billion with a steady increase throughout the year. We expect STS revenues to reach EUR 0.5 billion, up 40%, while E&C revenues are expected in the region of almost EUR 6 billion, predominantly covered by projects under execution. EBITDA profitability will continue to increase driven by higher value-added services. To support this growth, we plan to invest between EUR 130 million and EUR 150 million, primarily to expand our technology portfolio also through selective acquisition as we have done in the last couple of years. Even with these investments, the proposed EUR 117 million dividend and the planned share buyback for the incentive plans, we expect net cash to be in line with the figure as at the end of 2024. Before introducing our updated 10-year business plan, let me remind you that 2024 has been the second year in a row where we beat the targets we have set. Looking ahead, we have slightly upgraded our long-term targets in line with the trends of last year's plan. Over EUR 11 billion in group revenues and an EBITDA exceeding EUR 1 billion in 2034. The strongest growth is set to unfold in the next 5 years, fueled by technology expansion and operating leverage. While continuing our upward trajectory, we will also focus on profitability acceleration, targeting a 10% EBITDA margin in 2034. Notably, we are aiming to increasing the contribution of sustainability-related projects to 70% in 2034. Now let's dive into the details for our 2 business units, starting with the STS. NextChem revenues are expected to grow at a low- to mid-20s annual rate in the first 5 years, stabilizing in the mid-teens in the latter half of the plan of the back of a more mature technology business. EBITDA margin will remain extremely strong, ranging between 22% and 27%, driven by the product mix. Moving to E&C business. We expect revenues to reach EUR 7.5 billion in 2029 with gas-based projects leading growth and around EUR 10 billion in 2034. Selectivity and disciplined execution remain our guiding principles, supporting the expected margin expansion with an EBITDA set to more than double in the next decade. To achieve our ambitious growth, we are confirming our investment plan, targeting EUR 1 billion of accumulated CapEx over the next decade, balanced between the 2 business units. Investments will be primarily dedicated to sustainable-related initiatives. In the near-term, our priority is to expand the NextChem technology portfolio through selective acquisitions, investment in validating new solutions, and incremental innovation. E&C CapEx will focus on engineering capacity expansion, digital solutions, and advancing our net-zero plan alongside selective project development initiatives. Cash generation will remain extremely strong with adjusted net cash set to reach around EUR 1.9 billion by 2034. The strong operating cash flow will empower us to invest in our business while maintaining sustained dividend with a payout ratio assumed to increase from 55%, the present one to 66% from 2026. Our CapEx concentrated in the first 5 years will yield significant benefits as we transition into the second half. We remain also committed to first deleveraging our balance sheet while increasing the share of sustainable funding. To deliver at this pace and scale, continuing to attract and retain the right people is the key. We aim to expand our workforce by over 60% in 2034 and open new engineering centers in key regions like we recently did in the southern of Italy. Artificial intelligence will help boost productivity, unlocking valuable engineering hours and the ability to handle more projects with the same resources. Finally, we are empowering our colleagues with a variable compensation linked to ESG performance, fostering a culture of ownership and dedication. Well, we have come to the conclusion of our presentation, and I hope you have appreciated the total return we delivered since our first Capital Market Day in 2023. We remain committed to accelerating this value creation, delivering year after year, increasing return, and last but not least, further enhancing our technology business. So, I recommend stay tuned with this growth story. Stay with us.

We will start with a question from the audience here in Milan. Then I will read the questions from the chat. [Operator Instructions] So I believe we have the first question.

Massimo Bonisoli from Equita. Thank you for the interesting presentation. I have a question on the fiscal year '25 guidance. The guidance is below expectation only on E&C business, whereas the STS is above our estimates. So, I would like to better understand the phasing of the contractual project in 2025 and maybe also some light on the 2026, considering that also volumes are a bit below expectation.

Thank you, Massimo, for your question. I have to admit that I was excited this morning up to 3:00 or something like that, because I was convinced that the results that we have delivered and the guidance that we have provided for 2025 would have been well accepted by the financial community, but I have to accept that apparently it's not. However, probably we have not been very clear. You talk about phasing, and you are right. You are right. Most likely, the financial community have realized that I was expecting a much higher amount of revenues in 2025. But of course, as we have stated in our presentation, the final investment decisions of the client is not under our own control. We were expecting, if you remember when we had the conversation at the third quarter report that I was expecting to book at least EUR 6 billion of additional awards in the last part of the year, which unfortunately didn't happen. But it was not -- all those opportunities are still there, less EUR 3.5 billion because that has been already awarded. We have not lost anything. But it is a fact that they have slipped for by 4, 5, 6 months compared to my original expectation. So, for sure, the size of production, which I was expecting to deliver in 2025 since for some of those projects would have been already commenced in 2024. Now these activities are due to start over the next few weeks for 3.5 and the rest as soon as the additional projects will be awarded. As I was saying, I am really confident that considering what we have already on board, what I expect to be able to finalize most likely before delivering the first quarter results, but then other along 2025 it will be possible to capture at least EUR 8 billion of new projects. But for sure, they will enter into production progressively in accordance with the timing of the awards. So, for sure, 2025 takes benefit of the project that we have already in our backlog, but to a lesser extent, the production delivered by the new project. This make me possible to anticipate that there will be a significant jump in 2026. Please don't ask me the percentage of the additional increase, but there will be a significant jump in 2026 because the EUR 8 billion are there. The portfolio is there. For sure, some projects under the execution will come to the end during the 2025. But we have a backlog which back almost already today 90% of what we will deliver in 2025. And if we consider what we expect to get in the coming months, I have no worries at all about what we will deliver this year. And even more -- I am even more confident about the jump that I promised to deliver next year.

And allow me to complete because you opened with NextChem. We are expecting the market to appreciate the growth which NextChem is keeping on delivering. 2025 is going to be another year of substantial growth. We will reach the EUR 500 million revenues. We will be above 100 -- we indicated a range, EUR 110 million to EUR 125 million of EBITDA. So, we are talking of a company which will keep on growing at a 25% growth rate. And I actually see a number of young and less young colleagues and lions that will have to bring these numbers for next year.

Alessandro Pozzi from Mediobanca. Over the last couple of years, as you mentioned before, you've seen a significant growth in top-line. Part of it is also driven by Hail and Ghasha in the Emirates. Now as I look at your mid-term guidance in 2029, revenues guidance is about EUR 8 billion to EUR 8.5 billion. And also, this is when post 2027, Hail and Ghasha, I think, is likely to contribute less to revenue. So, what gives you the confidence that you can deliver at least an order intake well above EUR 8 billion to deliver that sort of revenues in 2029? Can you give us a bit more color on where you see opportunities for the next couple of years? Because if you want to get that number, I think over the last couple of years, your order intake will have to go up substantially.

As you have correctly stated, Hail and Ghasha, of course, we hope to be able even to deliver -- to complete the project even in advance compared to the planned schedule, not easy, but we are doing our best because we are presently ahead of schedule. But however, apart from Hail and Ghasha, for sure, it is not -- it will be not easy to replace the production that will be delivered 2026, '27, '28, '29. As we have disclosed, we have a commercial pipeline close to EUR 60 billion located in -- not just concentrated in one region, spread over several countries. All of them are countries where we are already present with counterpart, potential counterpart with whom we have a long-lasting relationship. So, all the conditions are there. Then I have to admit that in certain regions, in particular, for a certain type of project whereby the technology is not the core element of the project, the competition is tougher than a few years ago. But I don't see any major difference compared to the past when a project embeds in high-level of technology. And this is the normal landscape where we are operating. We are not part of the upstream developments, whereby for sure, the competition is wider and tougher. When moving into the downstream, there are just a few competitors which can compete with us because they retain more or less the same level of knowledge and capabilities. So, considering that we are not suffering a major variation in the competition and considering that the opportunities has been even recently validated and confirmed by those counterparts which are in our commercial pipeline, I repeat, not easy, but the conditions are there. And since we have already prepared our machine with an increased workforce by over 2,000 people since the beginning of this growth. Now of course, we are prepared, well prepared from an organizational standpoint, and we must maintain the growth that we have designed, and the conditions are there. So I am, of course, worried because everybody which are in the business must be there, must be worried, but not too much because the conditions -- I repeat, conditions are there, opportunities are there, and more than that, I have to admit that, in particular, with certain clients, we have been able to establish so good relationship that before approaching anybody else, they call us in order to have validated their ideas and their proposition. So, we are in a very privileged position.

Kevin from Kepler Cheuvreux. Sorry, I'll come back on '25. You very well explained the top-line dynamic, very clear. But at Tecnimont, you are implicitly guiding that the EBITDA margin will be slightly down. You said that it will be flattish something. On the paper, I would have assumed that considering the fact that the top-line is made by projects secured in a much better competitive environment such as Hail and Ghasha, the margin should improve. So just to try to understand why you expect the margin at Tecnimont only to be flattish '25 versus '24?

Kevin, your question is appropriate, but I truly believe that I have partially already answered since more or less 80% of the revenues that will be the top-line, that will be generated in 2025 comes from the existing project. It is a little bit normal that the marginality that will be delivered during the year will not be so different compared to what we have experienced in the 2024. Of course, you can consider -- normally, we apply quite a prudent approach in preparing our estimates. And then to the extent we'll be able to secure those projects. We are expected to come on stream in the next few months, and we'll be able to secure those projects at the condition that presently we are negotiating. There is the room for an additional improvement. But prudently, we have confirmed the same marginality that we have delivered in 2025 -- '24.

Emanuele Negri from Mediobanca. You announced yesterday the deal with Azura Capital to valorize NextChem. This is basically the second in just few months. Can you give us any update in terms of strategy for this valorization, what you have in mind as the next step?

First of all, we have announced these transactions, which do not belong to us. But of course, very important because also Maire have agreed and shared the value of this transaction. We have not gained anything. We had 82% before, and we have, again, today 82%. So, the stake which has been negotiated belong to a family office, which doesn't belong to our group. But having said that, both transactions have been considered extremely important because with this transaction, other 2 extremely valuable shareholders have entered into the shareholding of NextChem, which will be extremely important as soon as we will decide to valorize a portion of our stake in the market. Those entities which have acquired the stake in NextChem, they know that presently is not liquid. Their stakes are not liquid and will become liquid just as soon as NextChem will be listed. When, frankly speaking, too early to say when. Let me say that both of us, primarily Fabio, having the first responsibility of NextChem, but the group taken as a whole, all of us, we are committed presently to secure the growth that we have promised, and we will do our best in order to beat those targets. And also, another consideration, we don't believe that the value which have underlined those transactions is the proper value for NextChem. So as soon as -- altogether, we will have the flavor that the market is ready to recognize the proper value, we will take the proper decision. In the meantime, we are preparing ourselves. We are preparing NextChem in order to capture the proper moment with all the formalities which must be satisfied. We are working on that. Among the other activities, we are doing also this exercise. We don't want to lose the momentum. Presently, it's not the momentum. The market apparently is not ready to recognize what we have in mind in terms of proper value of this company.

Marco Cristofori from Intesa Sanpaolo. I would like to change a little bit the perspective and focus on the future. In particular, it seems to me quite attractive what you are developing in the nuclear, which now the attitude in Europe at least is changing and is moving toward nuclear. So just to understand, when you think to be ready and what are the investment involved in the project?

I'll take this. You're rightly saying that could be a game changer. It's all very recent. We have signed an MOU, and we are going to constitute a joint company with Newcleo very soon. For the time being, we have projected in our business plan, the ability to work on this new potential energy feedstock because Newcleo would just be an alternative energy feedstock to our end markets. So, our end markets will not change on the STS side. So, STS will be selling services to the joint venture made with Newcleo. And we are assuming a 5% to 10% of the overall revenues in the next 5 years coming from this activity. I'm clearly talking about NextChem business. Then we have a slightly upside on the second part of the plan because we will be able to approach together with Newcleo new clients. So, there is a slightly more courageous view always on the services side from the second part of the plan onward. But as you're rightly saying, things change quite rapidly. Newcleo was nowhere 6 months ago. We have revised our plans. And we hope we can be even more bullish as and when we will have clearer ideas of the development of nuclear worldwide, not only as you are mentioning in Italy or in Europe. For now, we are basing our projections on those countries who have already adopted or are already using nuclear. So, France, Slovenia, Slovakia and very few other geographies. Should Italy join soon the party and embrace what we believe is the only alternative to make green products available because you have a reliable source of energy, then we will review upward our projections.

Francesco Sala, Banca Akros. My question is on your M&A and acquisition strategy, also in the light of your net cash target for 2029, which is EUR 700 million, which gives you plenty of opportunity. So, I wonder what are the segments you are looking at in terms of technology and whether there is also a capacity issue you have to address also given your revenue target?

Okay. Let me say that what we have in our business plan is no different from what we have delivered in the past 2 to 3 years. So, we have been buying what we call non-transformational targets. These targets are typically company who have made all their technology development and are in need of a process engineering company, which are able to scale them up so that you can then satisfy an industrial client demand. So, the acquisitions we have made are of the millions or of the tens of millions maximum, which is not going to be, again, a major headache in terms of our ability to provide funding for it. You might recall, we have closed a dedicated banking facility. It's a long-term facility. We signed at the end of last year, we finalized in the beginning of this year for EUR 125 million with the banks, Italian and international banks to support this growth. So, we have also on top of self-generated cash flow, we have also that envelope to tap into in case of need. So, should we bump into more sizable opportunities, we already have the proper fuel to make these acquisitions, but these acquisitions are not in the business plan. So, what you see in the business plan is something you can define as organic growth because it's based on the technology we already have in our portfolio or on acquisitions, which will not change the game. And as to your question of where we are investing, at this point in time, we believe the technology portfolio we have is quite complete. If any, we are looking at certain technologies who can fill the gap in the overall end-to-end solution to the client. So, it's a portion of the overall technological offering that the client needs or on technologies which are adjacent to those technologies we already have because in this case, we can optimize our commercial activity with clients. You visit 1 client, you sell 2 technologies. So, this is what we are looking at, at this point in time.

My question is basically on the integrated model and what the results that could come out from this integrated model of your company. Basically, we are aware that there is an integration between technology, markets, synergies will come out. Now my question is for both of you. And you Fabio, NextChem had lots of contracts in terms of PDP and other small contracts and value-adding contracts. So basically, my question is, when and in what extent this kind of a contract that could translate into EPC contract also involving also the services from Maire?

Let me start from answering and then Sandro, if you want to add, please feel free to add. But we've always said that both business units are potentially revenue generating for the other business units. We are at a point in time when if you start by proposing a technology to the client, it's very likely that client will ask you also for the execution of the plant. It is also fair that in these days, certain projects which are taken directly by Tecnimont or KT from the execution side can cross-sell products to the technology part of the business. So, you don't start with the technology, but you start with the execution. So, both can work. I'll give you an example. Sandro was showing it on a slide. We are planning for this year to be able to start the execution of the Sannazzaro plant with ENI in Italy. That is a project that started from our technology offerings. And where we feel comfortable enough because the technology is ours, the environment is known to us. We are also feeling comfortable to execute that project. Let me make another example. We mentioned in my presentation, the license award for Mexinol in Mexico, the largest low-carbon methanol producer in the world in a matter of few years. In that case, we will most likely stay on the technology side without cross-selling to the execution just because in that peculiar market, we are not yet as confident as we are in Italy. So, in that case, we don't see an opportunity for Tecnimont because we think there are other companies who are more skilled to deploy the plant in that part of the world. And I can give you other example the other way around. I do personally think that there is value in being integrated. Just take any statistics of the past -- sorry, data of the past 2 years, all the pure plays in the energy transition have lost money, are still there to wait for their market. The basic of our offering is a wide portfolio of technologies and the ability to offer the client an end-to-end solution from the technology offering to the execution. I think this is going to pay in the medium-term. There will be then a time in the future where it was for the fossil fuel technologies, the licensor goes his own way and the EPC contractor goes the other way. But I think there's a value-added in having the 2 together for the medium-term.

I don't want to waste your time because I have no major information to add to what Fabio has already disclosed. But for sure, there is, for example, the stream of the green ammonia. You know that we have developed in-house technology for the green ammonia for the time being up to 1,000 ton per day. And now we are in the FEED phase for a couple of projects to be realized in Europe, which we expect as soon as the cost estimate for those investments will be shared with the client to start with the EPC phase. So, it is just one of the examples on top of what has already mentioned, Fabio, of the integrated approach, which is, for sure, the key element of our strategy. We're done. And now let's have a drink. [Foreign Language]