NHOA S.A. (NHOA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to our investor call regarding our Q1 2022 trading and operational update in the context of Masterplan10x. The investor call will be opened by Mr. Guglielminotti, CEO of NHOA Group; and with him to explain all details about the Q1 2022 trading and operational update will be Mr. Giuseppe Artizzu, CEO of NHOA Energy and NHOA Group General Manager; Mr. Roberto Di Stefano, CEO of Free2Move eSolutions; Mr. Stefano Terranova, CEO of Atlante; Mr. Ilaria Scarinci, Group Chief Financial Officer; and Mr. Gabriele Tuccillo, Chief of Staff and VP Strategic Planning and Investor Relations. Mr. Guglielminotti will open the call, and then we'll leave the floor to Mr. Artizzu for the Global Business Line storage; Mr. Di Stefano for the Global Business Line eMobility; and Mr. Terranova for the Global Business EV Fastcharging Infrastructure. At the end of the call, the management team will be available to answer all questions you may have. Please note that this investor call will be recorded. If you could not attend the whole call, the webcast and presentation will soon be available on our corporate website on the dedicated page. [Operator Instructions] Before we begin, I just want to point out that any forward-looking statements made during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement, which is included on Page 2 of today's presentation. This also includes the risk that the transactions discussed during today's call remain subject to standard conditions for these type of transactions as well as any other risks and uncertainties associated with the execution of transactions of this type. And as customary, the call will be governed by that language. So with that, I will now leave the floor to Mr. Carlalberto Guglielminotti.

Thank you, Chiara, and good morning, ladies and gentlemen. Thank you for being with us today. We are here today to present to you, as customary, in the context of our Masterplan10x our Q1 2022 trading and operational data. Then I will give you just a general overview of the main results that my colleagues will comment later in more details, obviously. But the very first thing I would like to highlight, which is really important to take in consideration when looking at our results, which is the increasing complex scenario we are facing right now. But thanks to our outstanding technology, our team and to the support of TCC, we are navigating through it and always keeping in mind our targets and eventually multiplying by 6x our consolidated revenues among the 3 business lines. Well, in the first quarter, we multiplied our sales in Storage by 12x. And in just 1 quarter, we made the revenues we achieved in the whole 2021. Our Storage business line for the time being has been able to cope with both the complete shutdown and lockdown for another wave of COVID-19 pandemic in China and the always escalating situation of the Russian invasion and the related consequences for the Ukrainian people, with whom we stand and to whom we express our solidarity. And these 2 situations are also clearly affecting the whole automotive market at the same time. We registered the drop in car sales through Europe and many plants had to shut down production. Our sales in eMobility increased by 2x in this context, and even our conversion rate is in line with what we previously achieved, I mean, maybe slightly lower, but this very small decrease is due to the very big supply chain problems we had to cope with and the whole sector is facing, if I may, but which is the lack of electronic components and raw materials, particularly in March. These are leading proofs of how our double business model, being active in both Energy Storage and eMobility, is definitely a winning strategy, which allows us to balance our 3 global business lines, making the group resilient and always able to cope with the different possible global scenarios, which are constantly in evolution. Well, we are also obviously in a privileged position, I say, because all our 3 global business lines are within a secular trend which is unstoppable, and despite volatility, let me say, the fundamentals are very solid. And in this disruptive context all over the world, TCC's support together with the fact of having as a partner also the #4 auto maker in the world, which is Stellantis, has proven to be fundamental for safekeeping of our business and dialogue with our suppliers. And in this chaotic situation, the rollout of EV Fastcharging Infrastructure continues strong. With the support of NHOA and the technology of Free2Move, obviously, Atlante has now more than 800 points of charge online and under construction and in the pipeline close to 1,000 sites. That also including France where the activity only started this January. Then eventually, this resulted into a 6x growth, not to mention the over EUR 220 million order intake in the last 12 months, and this happened despite lockdowns in China, despite semiconductor prices, despite the Ukrainian crisis driven shortage of raw materials. Then the question that we all have to face is how we expect Q2, right? How we expect the second quarter. Certainly, the current level of disruptions could affect our operations as they affected our industrial activity, and by the way, the whole market at the end of the first quarter. And certainly, this worldwide challenge might affect our second quarter even more than Q1, but frankly speaking, as of today, I do not see any reason why in Q2, we cannot easily more than double what we have done in Q1, that falls in line with our 2022 expectations and our guidance. And our confidence comes from what we have seen in the first quarter with my very eyes, so to say, which is an unparalleled effort, intensity, excellence and sometimes unconventional proactivity demonstrated by our teams, a team of over 300 talents coming from 23 countries that, after 10 years of experience in the sector, I can proudly say has no precedence in the market. But I don't want to spoiler you all our results. I will now leave the floor to Mr. Giuseppe Artizzu, our Group General Manager and CEO of NHOA Energy, to give us more details about the results of NHOA Energy, our global business line for Storage Systems. So Giuseppe, the floor is yours.

Thank you, Carlalberto. Welcome, everybody. Thank you for attending. The headline figure for sale is as expected. I mean, of course, we are extremely happy about this, but last year we had done a change of pace with respect to origination and that change of pace in origination and in securing contracts is starting to convert into revenues. This is just the beginning. The number that you see that we got into the revenue of the full year for 2021 doesn't even include the large battery shipment. As you know, we accrue revenues on a work-in-progress basis, on a status of completion basis, and so it's inherently volatile, because a big battery delivery is determining the ability to accrue big bunches of revenues. Now in that EUR 15.5 million, there is essentially no battery component, which we do expect over the following quarters. Another piece of good news is that in the meantime, we have maintained the backlog stable. Actually, margins have increased, which means that even in the heavily disrupted origination market due to instability in -- I mean, instability is an understatement -- due to extreme volatility in battery prices and hedging challenges and challenges on availability of equipment. Still, we are managing to close some contracts and more than offsetting the conversion of backlog into revenues. We hope that this is something that we'll be able to confirm over the following quarters, even though it is more and more challenging to close contracts in the short run because of finding the right allocation of risk for delays associated to equipment and ability to -- and potential abrupt variation in battery prices in the digital appliances in the current weeks and months, but still so far so good also on that front. Contracts Secured level remains very close, which is essentially Guam. There the piece of good news is that the Supreme Court in Guam has withheld the award of the PPA contract to ENGIE a few weeks ago. So that's clearly good news in general, having said that, that project was clearly borne in a different price environment. So we need to understand what ENGIE's intentions are provided the commitment that they stated to the project in the past stands. And therefore, we will preserve our right in that respect. The fact that we managed to more than refill the backlog is confirmed by the order intake. This is a trailing indicator. So it has gone up in I think the first quarter of this year compared to the first quarter of last year. So not only we have generated 10x as much revenues, but we also generated more contracts than we managed to secure last year. Online capacity stays the same, even though in reality we did commission the second phase of our Anza 2 microgrid in California during the first quarter, but since technically the project is not yet fully accepted by the client, we haven't reported it as capacity online. The fact that, we have won a couple of contracts, we will give details on these contracts over the next few weeks, so we are fine tuning the communication with our clients, brings our projects under development from 1.02 gigawatt hour to 1.05 gigawatt hour with the breakdown that by now you are familiar with between the equivalent of contracts secured and the equivalent of backlog. Pipeline, in terms of origination, as I said, the market on one side is extremely -- is bullish in terms of incoming tenders that we receive from clients. On the other hand, most of the tenders that we have been participating in the last few months were several months ago, and clearly, clients are seeing that every new round of the offers that they request from us, there are competitor prices that are going up. So this does not facilitate closing contract. But having said that, the overall appetite for Storage is continuously increasing. New markets are opening also because the energy crisis in Europe is building an extraordinary business case for Storage in multiple jurisdictions, and that was not the case in the past. But still from tender to a work of tender currently in between there is difficulty in fixing battery prices from suppliers. I mean you are aware of the COVID situation in China, by the way, that is affecting the ability of our battery suppliers to keep good production level and the availability of power electronics equipment that needs semiconductors inside. Having said that, the message is so far so good. We are rapidly getting used to the new environment. We were born on the battlefield and so we are prepared to be on the battlefield. Carlalberto, back to you.

Thank you, Giuseppe, and let's now move to comments on Free2Move Solutions results and I obviously have to hand over to Roberto Di Stefano for a comment on the figures, and most importantly, the industrial challenges behind. Floor is yours, Roberto.

Thank you, Carlalberto. Good morning to everyone. Let's say, I'm a bit -- it's 3:00 in the morning where I am because I am today in Detroit because we are starting operating in North America, like we already presented to the market. And we are with the team to set up all the action plan for our start of sales that we'll comment later on. So let's comment about quarter 1, 2022. We are continuing in our growing path. In the quarter, we met a gross sales level of EUR 7.2 million that is representing a growth of 240% with respect to quarter 1 last year. This is clearly including the sales that we are performing with Atlante. But net of them, we made EUR 5.2 million, over 2x last year. Just some KPIs about the performance of quarter 1. Let's say, 60% of our sales have been performed outside Stellantis brands. This is confirming that our product and our approach to the market is giving us the capability to work both for what we are calling captive, that means Stellantis brand customer, but not only. We are already performing business with several industries and some competitors of Stellantis too. Another KPI, the conversion rate, that Carlalberto already commented briefly, with Stellantis brand is stable. We got 1% of reduction compared with quarter 1 last year. And this, let's say, stability or, let's say, the small reduction was due mainly to a couple of reasons. The first one, as Carlalberto said, the disruption on semiconductor in the global supply chain for sure is impacting both automotive industry and Stellantis in this case, but even us, especially in March. Second was a decision that I personally made to delay the start of sale for one important product in our portfolio that we named ePro that in reality is not one product, but it is multiple variants of small tool boxes, that with this family of product will cover all the market's requirements and the customer needs both for B2B and B2C. And it will be even UL certified and it will be our, let's say, backbone for the North American market for, again, private customers and B2B customers. I decided to not start the sales for this product, especially for Stellantis brand, in this case, in this quarter because I felt that there were some issues that we had to fix before starting the sales of this product that mainly were related not to the product itself, but to the product in a new customer journey that we are building up with Stellantis hand by hand and where we are targeting to fix all the customer frictions, that currently the customer that is buying analytical vehicle paired with a charging system, a charging support is having. So we want to be good, I can say we want to be perfect in the customer journey. And because I felt that in this case we were not 100% ready and I took the decision to postpone the start of sales starting from April this month. This was the main 2 reasons. Another KPI that I would like to comment is our manufacturing capacity, we will keep growing in our manufacturing capacity. We met in quarter 1 a capability of 2,750 parts per week, you can see in the page, our plant that we built and we started producing in this plant, that is close to Torino, from second part of February this year. I was saying that we are working hand by hand with Stellantis and you can see that step by step, like I said during the last meeting, we are progressively replacing all the previous partners that Stellantis had in Europe, and step by step, as soon as they are launching a new vehicle, a new product, we are pairing our product with them in each of the markets, in each of the countries. Talking about the industrial challenges that we are facing. So we already spoke about semiconductors, the crisis there. We are in the market and we cannot say that we are out of the crisis. We are lucky because we are working jointly, both with Stellantis and in this case with TCC, which is the majority owner of NHOA, and we both, we are performing all the activity with the major player of semiconductors. So far what I can tell you that I'm feeling that quarter 2 will be still a bit critical, I'm talking for us, in the overall needs of semiconductor. Now we are shortening the list of critical components. We are now facing the major part of critical discussion with a couple of players. I'm feeling good and I can see that, let's say, we will be able to get everything that we need for sure for quarter 3. This is something that I have already got us as a status. Quarter 2 will be critical. So we need to keep discussing and, let's say, "fighting" for this activity and this is what we are doing in this period of time too. Additional activities that we performed in this quarter that are pretty important, we are in the execution of upscale of our vehicle power plant, V2G, in Torino in the Stellantis plant of Mirafiori. We have already started the civil works. We are planning, by mid of August, let's say, before the end of August, to upscale and to install all our setup for fast charge where we will perform our project called, in internal language [Foreign Language], up to 25-megawatt of ancillary services that we'll provide starting from beginning of January 2023 to Terna. We are planning to start the internal testing of the old setup in October and the commissioning phase between end of October and November and to be ready to start roughly speaking from January 2023 with Terna. In parallel, we are transforming our hardware that we are using, our ePost that we are using for this project, in a public fashion, the fast charging, and we are in full execution phase of this project. In parallel, we are targeting to start our in-house production of these fast chargers called ePost in the public fashion in the last quarter of this year. This will be, let's say, one of the product that we will produce for our sister company, Atlante, for the network in Europe. Some additional comments. I would say something, let's say, we are confirming that our activity is always looking to be as much as possible perfect in terms of quality, because we are convinced, and this is due to my background, that is I'm coming from automotive, as you probably know, I'm fully convinced -- we are fully convinced that being, let's say, we've become perfect in quality with the final customer, not only the direct customer that could be Stellantis or the other B2B, the final customer, the user of our products and services. This will give us something different, something more than our competitor. And this is why the comment that they spend [indiscernible] our product people has been made, because we'll never forget that at the end that there is someone that is using our product and we need to keep going in this sense. I guess these are the main comments for quarter 1. Carlalberto, back to you.

Thank you, Roberto, and we can now move to comment and investigate more on the Atlante results. So I will leave the floor to Stefano Terranova. Stefano, floor is yours.

So hello, good morning, everyone. I hope you can hear me well. So this has been an exciting quarter for us. Obviously, it's only the second full quarter of activity, I would say, at least since I joined. And I would like to start, first of all, with people. You can see down in the bottom right of the slide, we have put a little bit of a highlight on the 3 important steps: the opening of the Iberia and France offices as well as the promotion of Francesco Lamberti as a full-time CTO of Atlante. By the way, there's one important mugshot missing there is Daniele Rosati's photo. Daniele Rosati is the CTO of the NHOA Group and he's also one of the founders of NHOA, and he will continue to support Atlante with a very important strategic role, especially focused on the storage. We're making the link between the key business model of NHOA Energy and Atlante. So that's kind of important, why? Because we have onboarded more than 20 people in Q1 2022, tripling the staff -- or more than tripling the staff of Atlante with respect to the position 31st of December 2021, and fully on track, but slightly ahead of my hiring plans, so I'm very satisfied with that and fully on track with being at full load in terms of human capital by the end of the year, when we will kind of almost double again in size in terms of professionals and talents. In terms of a couple of words again on the countries. France, we have moved very fast. You can see that from 1st of April, we have appointed Jacques Galvani as CEO and Country Manager. And he had been working for us part-time since the 5th of January as an adviser, and in that role, he had already set up the basis and so much so that on 1st of April we even opened the office at the same time of his joining with a team that he had been assembling in the background of 7 people, including himself. So a very great start at France and as I will explain also in terms of business development. Iberia also we decided to fast track. Iberia was even scheduled in our original plan for next year. So we brought it forward approximately 9 months. And as you can see, Giovanni Ravina, who is also one of the founders of Atlante project, and who will continue to have [indiscernible] responsibility for Atlante, but he also took up a very important P&L role as CEO of the Iberia region, encompassing Spain and Portugal. There, we also just opened an office in Barcelona. We set up the legal entity as well, and we are in the process of hiring people. We don't have any hires yet except Giovanni, who has recently moved there. That's on the people's front. And in terms of business development, the first thing I have to mention is that we also suffered some delays in terms of delivery of hardware, delivery of EVSEs. That's pretty much a common theme all over the world, all over the industry. We could not avoid being affected. Just to give you an example, we had the most important hardware that we will be installing in 2022, the phased shipments that were expected in initially late November, then sometime mid-December, and finally, we received them mid-March. So that's bit of a setback in terms of actual execution on sites. But on the other hand, I can reassure you that likely we are still pretty much on track with respect to our own internal targets for midyear and end of the year. We do not have quarterly targets internally. But of course, we follow up all of the activities of the development of the pipeline on a weekly basis, in fact. So we will catch up. Now the chargers have started arriving, thanks again to Free2Move eSolutions, as I shall remind everyone that thanks to the collaboration with Free2Move eSolutions, we were able to do the procurement process even before Atlante as a legal entity existed. And so that gave us a head start with respect to the rest -- with respect to a plan with our Free2Move eSolutions. So I'm very confident for 2022 in terms of delivery of hardware. In terms of site development, you can see the numbers. I think they speak for themselves. We have almost 1,000 sites under assessment as of 31st of March. That means not simple leads that we get in through the door or that we originated ourselves. These are the sites which are actually under assessment where we have dialogue with the owners. We have conducted first high-level feasibility studies. So that's a very large number. We have increased with respect to the previous quarter by 133. There is also obviously a mortality rate in that number, of course. So there are sites which drop out of the under assessment category for various reasons. Sometimes the owners do not wish to continue the adventure with us. On other occasions, more often, there are technical reasons for us to drop them. The mortality rate is quite healthy. It's neither too low or neither too high. So it gives me satisfaction that the pipeline is of good quality and it keeps growing. Out of the almost 1,000 assessments, 125 are under development, that means that we are actually in the process of finalizing agreements to take over the site either as, let's say, free-of-charge leases, or in certain occasions, leases with small payments, small rental payments. And in some occasions, we also started in core Tier 1 discussion to purchase certain sites. So the figures again speak for themselves in terms of we also brought more stations. We managed to bring some stations online, notwithstanding the last minute arrival of the chargers. You can see some of them in the pictures there, we opened up stations in Piedmont, in Lazio, and I think that's it, Piedmont and Lazio that's where we opened up the stations. In terms of -- you can see also bottom left, a mixture of [indiscernible] in one of the existing stations in the middle. But the [indiscernible] are quite important because they refer to the tender process we participated in France for motorway located stations. So this is a super-important milestone for us we've managed to put together. I would say, a very competitive package. The bids went in, in March. So we are still expecting results. I hope that by the next time we have this call, I will have some good news on at least one or more of the sites that we bid. But again, super-important because basically we managed to put together a team and immediately hit the ground running in France and participate in highly complicated and highly competitive tenders for the motorway locations. In Italy, we also participated in some tender processes, both private and public. The private ones -- we haven't lost anything yet, touch wood. Of course, there will be a success rate. So we will unfortunately lose some. But for the time being, everything that we bid for, it's still ongoing or won. We won the 2 sites, for example, in Veneto, very close to important traffic nodal points, which moved into execution right away. And we are in the process of being awarded still, again, as a coincidence, in Veneto, 2 very large parking spaces, which we will, in phases, fully electrify. And these 2, unfortunately, I cannot still announce because we have received after the 31st of March the official documentation from the tendering authority and we are in the process of signing up the last few formal steps to be able to announce the deal publicly. And then on the private sector, again, very soon we will make a couple of interesting announcements. Basically, we have secured sites on other important nodal points. For example, soon we'll be able to make a public announcement about very, very 3-key sites around the city of Milan, which we will be developing in partnership with an existing player. So that's the overall what I wanted to talk to you about. So in a summary, the organization is doing very well. We onboarded lots of experienced and young talents. The onboarding went very well. The fact that we had delays on the hardware delivery didn't affect too much our plan for 2022, just for the quarter, but gave us also time to refocus a little bit our resources on fast-tracking more of the platform setting activities, France is one of the examples -- just another particular example. We were in the process in Q1 of selecting a design firm to come up with the most useful, sustainable, resilient and also beautiful type of design for our eStation to be launched early next year. And because we had more time than foreseen due to the delays in hardware delivery, we decided to shortlist the 3 firms and work in parallel with all 3 of them rather than shortlisting only one. So that's an example where we can refocus energy and refocus attention and still build up the Atlante platform to be one of the most successful, if not the most successful network in Southern Europe. I think that's it from my side. I'm very happy to take questions when we come to the Q&A session.

Thank you, Stefan, and I hope that after these comments by you, by Roberto, and Giuseppe, you all can get the real facts of our results. Yes, they speak by themselves, but most importantly, as I said earlier, it happened despite lockdowns in China, despite semiconductor crisis, despite the Ukrainian crisis-driven shortage of raw materials. And this happened because -- and thanks to the leadership commitment, and sometimes, as I anticipated, the unique, unconventional creativity demonstrated by Stefano, Roberto and Giuseppe, and by their respective teams. But after this quarter, you can certainly appreciate, I think, how much they are in full execution mode. I think we can now move to our Q&A session and together with Giuseppe, Roberto, Stefano, together with Ilaria for all financial aspects, we are ready to take any questions you may have. And Chiara, the floor is yours to open the Q&A session.

Thank you very much. I think we can now start our Q&A session. I first would like to mention that Mr. Artizzu will need to leave this call at 10:00 a.m. sharp. So we will ask to ask first the questions related to Energy Storage. So please also when you raise your hand, give priority to all questions you may have on this topic. [Operator Instructions] So with that, I think we already have some raised hands. I will ask to Mr. Pozzi from Mediobanca to speak.

I think it's reassuring to hear that you're going to see a material increase in revenues over the coming quarters despite the headwinds from the supply chain. I believe in the opening remarks, Carlalberto, you mentioned potentially a doubling of revenues in Q2. Just wanted to check that. And if that is the case, what gives you confidence that you can achieve this target? Is it because you already have deliveries of those batteries or you already saw some of the supply chain issues for the quarter. And then for battery storage, clearly we've seen lithium prices skyrocketing. And I was wondering, do you have pass-through clauses to adjust the cost that then you will end up charging to your clients on the back of this big rise in material cost? And also, I was wondering whether -- as you mentioned, it's probably going to have an impact on the negotiations with your clients, and I was wondering how much of the lithium or the battery cost is as a percentage of a typical contract in battery storage. And then final question on Atlante. Can you give us any indication of how many charging points do you think you will be in operation by year-end.

Okay. Thank you very much. As suggested, I will take the first 3 then I will hand over to Giuseppe and we will keep the last one for a later stage just for the sake of time. So revenue increase, despite the headwinds, yes, obviously, we secured the supply. We have a constant dialogue with our suppliers based in Asia. And certainly, then Giuseppe will give you more details, but the Asian angle we have, thanks to TCC, gives us a privileged dialogue with all those suppliers, right? So on top of the fact that we have secured the batteries, the batteries under production, obviously, there is a lockdown in China as of today, but the level of confidence we have is the level of confidence that we will have never imagined without an Asian shareholder, okay? So that's the general comment. Then on lithium-ion pass-through clauses, yes, we have. Giuseppe will give more details. And the percentage of battery depends on the power intensity and the energy intensity of any project, but certainly it's around 50%. And Giuseppe, you can give more details, I think, on those aspects.

So on the pass-through concept, first, consider that the disproportionate majority of our backlog has batteries locked in at fixed price. So the impact of commodity changes over the last few months and the acceleration of battery volatility and magnitude of changes does not affect the procurement terms of the large majority of our backlog of orders. There is one exception, on which discussions are ongoing with the client. But by and large, this is a matter to be dealt with more for the future, for new tenders, than for the past. For new tenders, currently, most battery suppliers, I would almost say all of them, are refusing to fix prices at the moment we signed the contract and would only fix price based on the indexation formula, the moment that we actually take deliveries of the batteries. So obviously, we need to a back-to-back with clients to that from a hedging perspective. And this is very difficult to digest for clients. And this is essentially the main issue that I was mentioning before about signing new contracts. So this one together with the fact that we need flexibility in the delivery of some digital equipment because we need to account for potential disruption in the supply of semiconductors. So the first one is more important from a stationary storage perspective. And we should think that the battery manufacturers themselves cannot hedge the cost of cobalt, lithium, and to a large extent nickel as well beyond a matter of weeks/months. So they cannot hedge. So they are exposed themselves and the industry needs to find every balance there from the introduction of forward contracts in the commodity stages and digestion on indexation downstream. But I think -- my suspicion is that the first one will be quicker to [indiscernible] power purchase agreements terms that are at fixed price. So this is just on the pass-through aspect. With respect to the weight of batteries within a normal contract, it depends on the kind of sizing of systems. But you can consider between 50% and 75%, in some cases 80%. In cases of we are using batteries in energy management tools to shift solar energy from day to evening, it's on the higher end; if it is more for ancillary services, grid support, it is on the lower end. I think I addressed both questions.

So to the analyst from Mediobanca. I mean, hedging is there. The supply is safe, and yes, eventually, we confirm what I mentioned and what you get currently, which despite the headwinds, obviously, further crisis aside, we confirmed that we have visibility as of today to more than double our Q1 revenues in Q2. That's the reason why we still are confirming our guidance and our expectations for 2022. Then we just freeze your question on Atlante, and Stefano will answer in a while, while we finish the collection of questions on storage. So Chiara, the floor is yours for any further questions.

Thank you very much. I think we have the raised hand of Mr. Muros from Societe Generale.

I'll just ask them the ones that are related to Storage for Giuseppe. Basically, well you gave quite a lot of color on supply chain disruptions, but I was wondering if you could give us a small -- I mean a bit more of granularity, namely on the delays, i.e., lead times that you're experiencing per business line and in storage as well? And how are you coping with that? And share a bit more detail perhaps on how TCC and/or Stellantis are helping you to either negotiate, improve your sourcing? Especially when looking at your URD 2021, it looks like you have increased your supplier concentration from 2021 compared to 2020. So I don't know if you can give us a bit of more granularity there on these supply chain issues.

Okay. So from a delayed perspective, we are in the few weeks space, and this is normally well within the flexibility that we have in our contract time table. So from a spectator's perspective on supply chain project portfolio, while we are extremely cautious in managing expectations, we are relatively comfortable that we can handle the delays that we're seeing. Of course, we are watching very carefully the impact of the new COVID variant in Mainland China, because that is something that could change the equation for the whole industry. I mean, clearly, the upstream of the industry is heavily reliant on China. But even there, so far, we do not have reasons -- we have reasons for concern, but not for alarm. I wouldn't say anything more than this. Again, this is from an execution of the current backlog. We have no concern on the position to close new contracts, because the situation is -- we need an improvement in the situation to go back to some kind of normalcy in the contract activities. But I mean, from a combination of good risk management and a bit of luck as usual, as far as the existing contract portfolio and its execution, it's largely under control. So again, I'm more trying to educate your expectations -- or not to educate your expectations, but essentially to make you aware that we are living in an unprecedented situation. So with the successes that we are having and hopefully we'll manage to continue having quarter-on-quarter as we've managed to secure in the last part of 2021. So maybe contracts to maintain without volatility unless something changes in the whole supply chain. For several months, we can -- so we can afford given the way we [indiscernible] contracts for 3 to 6 months, and we are still [indiscernible] for the medium term, let me say. So we are comfortable in this situation for the next several quarters, but we like looking after that. And if we look for the [indiscernible].

Chiara, I think we can collect any further question on Storage, and then we'll move to the next chapter.

Yes. I don't know if Mr. Muros or Mr. Pozzi have other questions on Storage, because then we have other questions focused on Atlante and eMobility and Free2Move eSolutions. No. So I think we should go with the other topics.

Okay. So we have a couple of outstanding questions posed by Mediobanca and Societe Generale on Atlante. The first one was from Stefano for a bit of color on the number of fast-charging points we are expecting to roll out and to have online by year-end. And then we have a question from Societe Generale on delays regarding, I will say, about Free2Move and Atlante and a bit of more color on supply concentration that I think has already been catched by Giuseppe. So Stefano, can you give us more color on the rollout plan?

Yes, sure. Let's start with the data that we published. As you can see, we have 808 points of charge online and under construction. If you remove those online, we have 724 under construction. So obviously, we will deliver those by the end of the year. I must stress that there is a vast majority of that 724 concentrated in the Drosso project, which is an extremely important project with 560 fast-charging points of charge. The Drosso project, as you remember, will be the largest -- by far the largest V2G project in the world and benefits from a contract with Terna for the provision of grid services. It's also a bit of a special project because it doesn't allow public charging. It is specifically designed for the private car park of Fiat Chrysler in Drosso in Torino precisely. So it is very unique and very special, and it's a concentration of points of charge. 560 will come out of the Drosso. It is also super important because it's the second test of the technological platform that Free2Move eSolutions is developing for Atlante for the e-stations that we will start rolling out in 2023. So there's a fundamental importance around that project. Then excluding those, so that's 560 points of charge concentrated there, there are another 164 under construction in various places in Italy. I have to stress that we have not commenced execution in France, Spain, or Portugal yet. And by the end of the year, I would like to double the figure, so that I would expect approximately 300 points of charge on top of the Drosso points of charge to be online by the end of the year. These are approximate figures. There will be ranges, and I would say, the main risk there is again, delivery of hardware, because the rest of the pipeline is set up to deliver that amount of sites on time for the installation.

Just as a follow-up. Can you give us a bit more color on the locations for those chargers outside the Drosso projects, where they are, whether on motorways, next to motorways, more around urban areas?