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

Good morning, ladies and gentlemen, and welcome to our investor call regarding our Q2 2022 trading and operational update in the context of Masterplan10x. The investor call will be opened by Mr. Carlalberto Guglielminotti, CEO of NHOA Group. And with him to explain all details about the Q2 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; and Mr. Gabriele Tuccillo, Chief of Strategy, Staff and Investor Relations. Mr. Guglielminotti will open the call, and then we will leave the floor to Mr. Artizzu for GBL Storage; Mr. Di Stefano, for the GBL eMobility; and Mr. Terranova for the GBL EV Fastcharging Infrastructure. At the end of the call, the management team will be available to answer any questions you may have. Please note that this investor call will be recorded. If you could not attend the whole call, the webcast and the 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. These also include the risks and uncertainties of such a transaction and -- as we mentioned in the safe harbor statement. During today's call, we must remember that 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 leave the floor to Mr. Carlalberto Guglielminotti.

Thank you. Thank you very much, Chiara. Good morning. Thank you for being with us today. We're here to present you, as customary, in the context of [indiscernible]. Can you hear me? Okay. Just to check. Okay. And saying we are here to provide [indiscernible] the context of our Master Plan operational updates. And as usual, I will give you the usual [indiscernible] results, and my colleagues will deep dive later on, then more in details, obviously. We just said that -- shall we just say that the second quarter 2022 marks unparalleled results in NHOA's history. That's the question, and I think the answer is yes. I really think so. And this is in front of our very eyes because H1 sales at group level reached EUR 82 million, growing by 10x year-on-year and representing 2.5x the 2021 full year revenues, with record growth in all our business lines. I mean in Energy Storage, which we know represents the technological heritage and the backbone of the group, the group I started with Giuseppe almost 9 years ago. And despite increasingly complex scenario, we saw sales growing by over 30x year-over-year to over EUR 70 million. I mean nothing more than something which is in line with expectations given the backlog level we secured in Q4 last year, but reality is that it shows our ability to perform, the ability of Giuseppe Artizzu to lead NHOA Energy setting to 0 the execution risk, to transform pipeline into backlog and backlog into revenues. And revenues, but knock on the wood, let's wait the coming days for the release of our audited H1 results into EBITDA. And please let me say that this is all thanks to and leveraging on, if I may, our industrial footprint, an industrial footprint that has been where we invested the money we raised in the equity capital markets in the last few years with the support and trust of our investors into our region. When the market was not yet there, when our vision appeared sometimes unrealistic, while now everybody consider our top 5 global ranking in the booming energy storage market as the obvious end game. And if I may, last but not least, let me highlight the extraordinary job made by our global business development team led by Lucie Kanius-Dujardin after an over EUR 200 million order intake in the last 12 months continued restlessly to bid in 4 continents, increasing our pipeline in storage only to over EUR 1 billion. And then let me please take the opportunity to congratulate with both, Giuseppe and Lucie for that. Then we have eMobility. But let me anticipate the answer to an obvious question. Yes, we had to cope with a globally disrupted supply chain. With critical components that overnight turned deliveries from 12 weeks to a 15-month lead time while 15 months ago, Free2Move eSolutions was not even incorporated. And despite that, we doubled our sales while keeping a stable conversion rate versus Stellantis EV sales. So that says that they have led the European market, as you will have read in the newspapers. But I mean, certainly, just 2x growth is not exciting to us. And they know very well that our personal expectations were higher that we should have doubled our conversion rate instead of just our sales year-on-year. But the results we achieved, 2x growth and stable conversion rate with the restless focus on profitability, represents, I think, our resilience, the resilience of Free2Move eSolutions in a very complicated market. And the real miracle, if I may, made by Roberto Di Stefano and his team, but Roberto will elaborate on that in our Q3 and Q4 step-change expectations in just a few minutes. Then eventually, let me comment on that plan. Our EV Fastcharging Infrastructure business line. I mean the one we launched less than a year ago with a rollout that just started in November 2021 when the arrival of Stefano Terranova from the Middle East joining back NHOA. Well, Atlante already showed its ability to even accelerate its 2025 targets with over 900 points of change online and under construction as of today in Southern Europe and the pipeline of around 1,500 new sites. 1,500 sites are our 2025 target, and we are just in mid-2022. I mean I think -- what has been done by Stefano is in front of your very eyes. And the number of strategic and iconic sites secured in less than 10 months is comparable to what has been done by our major competitors like Tesla mentioned the most obvious one in the last 10 years. Well, long story short, I really think that these amazing results registered in H1 are a testament of NHOA's competitiveness in the global markets, not only from a technological and economical point of view, but also, even more importantly, if I may, from an execution perspective as we are managing countless large scale and iconic projects in 4 continents. Thanks to the work of our ever-growing teams of excellence, and I mean we are over 300 extraordinary people today at NHOA, and obviously, the crucial support of our stakeholders like TCC and Stellantis. Well, I will now leave the floor to Mr. Giuseppe Artizzu, our Group General Manager and CEO of NHOA Energy, to give us the insights around the results of NHOA Energy, which represents our storage global business line. So Giuseppe, the floor is yours.

Thank you, Carlalberto. Good morning, everybody. I will summarize my messages across 2 areas. The first one is execution. The second one is the status of the market from an origination perspective. So execution, as we said over the last several months, is the core of our focus at this juncture because we need to prove that we can deliver on time. We need to prove that we can deliver keeping costs under control and managing risk, which is what we are doing. So what you see in terms of revenue generation in the second quarter of this year is the result of the ability to deliver equipment and services on time to our client, managing daily the effect of disruption in supply chain. So it is not automatic, the conversion. We are having issues in -- there is clearly equipment directly or indirectly is coming from China and has suffered the logistic impact of lockdown on port activities. There is equipment that is coming from the Black Sea area that has suffered from the logistic implication of the situation between Russia and Ukraine, et cetera. So it's not automatic converting backlog into revenue. So this is what we are doing, and we are doing it on time. And most importantly, we are doing keeping risk under control and ensuring that the cost basis is consistent with our expectations and margins. So from that perspective, so far, so good. This will continue over the next 2 quarters. As we said, Atlante seems there are big chunks of equipment that come at the same time. Do not expect a linear evolution, but this will continue steadily towards achieving our guidance. From a backlog perspective and order intake perspective, numbers clearly imply that we did not get large orders in the last 3 months also because, otherwise, you would have seen it, we would have announced it. This was expected. As I said, 3 months ago, the turbulence on commodity market, and therefore, on battery prices made it extremely difficult over the last few months for clients to take final investment decision. So if you do the math, you will see that the backlog decrease is slightly lower than the conversion of backlog in sales in the quarter. This is because we booked the expansion of the Hoping One projects, and there are some other adjustments, there are contract variational or large contracts, even contract variations affect in a material way the backlog. But essentially, there have been no large contracts secured. On the other hand, over the last 6, 8 weeks, we have seen cooling down of the turbulence around commodity market. So there is a moderate degree of optimism that without further sources -- new sources of turmoil, final investment decision by clients may come back on the screen. So we are -- as you can see, we significantly increased our pipeline. And please take into consideration that we are tighter and tighter, more and more disciplined in the way we define pipeline, partly because of the need to be disciplined in the allocation of resources, but also because, frankly, the quality of the opportunities that we are seeing allow us to be strict and stricter in the definition of pipeline. And we are shortlisted. And when I say shortlisted, it means that it's 2 or 3 contendants left in the tender arena for this project. So the number of projects we're are shortlisted for are 4 to 5. The average scale of this project is quite large. And we are also planning carefully from a financial perspective because clearly, tightening credit conditions, tightening market condition makes all the aspects related to bonds and warranties important to manage in the context of increasing average size of potential orders. But overall, we are modestly optimistic on the origination machine coming back into a more favorable environment to investment decision by clients. The industry is maturing. We are seeing a higher degree of differentiation among battery suppliers on their ability to handle commodity risk without demanding a full transfer downstream. We are seeing increasing news flow concerning battery suppliers and not only battery supplier, also downstream taken long-term exposure to the upstream in order to favor new development in the mining sector, but also to favor a reduction in the exposure of the downstream of the industry to fluctuation in spot markets in battery metals. So 2 messages just to close. First one, execution is going according to schedule. We are proving that we can control and fulfill our expectations and targets in a challenging market environment. So execution is well in line with what -- with the ambitious target we have set for ourselves. Business development continues to work in a challenged environment, but the situation is improving. And partly because of the energy market dynamics, business cases starting to describe 25%, 30% increase in the cost of batteries. And therefore, we are moderately opportunistic over the next 3, 6 months, we may see conversion of opportunities that have been incubated for quite some time. Carlalberto, back to you.

Thank you, Giuseppe. And apologies again as we stopped the video. But sometimes even if you are quite good in energy storage, unfortunately, the bandwidth of our fiber connections in Italy are not as resilient as we are. Thank you again, Giuseppe, really and congratulations. We -- I think we can now move to comment on Free2Move eSolutions results. So I will hand over to Mr. Roberto Di Stefano for a comment on our figures and, most importantly, the industrial challenges behind that essentially turned our 2x growth into a miracle, as I said. So Roberto, the floor is yours.

Thank you, Carlalberto, and good morning to everybody. So like Giuseppe, I will start commenting really quick the result that we have achieved in this really tough second quarter. Let's say -- we already said, comparing with, let's say, first half 2021, the second -- the first half 2022, we met 2x the level of sales. And we confirmed in a really tough period of time the conversion rate with Stellantis at 17%. And the third that I guess is important because it is confirming that our product is competitive in terms of technological content and even cost, we confirm even our capability to sell outside of Stellantis perimeter to other type of customers. Clearly, talking on the level of revenues, especially in the second quarter, I cannot say that I'm satisfied because, really, the expectation -- my personal expectation -- company expectation are clearly different, really more ambition than what we met in the second quarter especially, but I would focus on the main reason that generating this type of result on the second quarter. Because we said our backbone, our customer is Stellantis, we suffer of the global supply chain disruption that automotive, but not only is even the Atlante [indiscernible] our products and services are mainly paired with -- not when the customer [indiscernible] in any vehicles, but especially in the disclosure to the delivery of the vehicle to the customers. And because this timing between customer order and the vehicle delivery to the final customer getting longer for the overall automotive industry, and Stellantis really is meeting the same issue, clearly, we are, let's say, receiving the delay on this appointment when the customer is coming for our product and services. This is one of the most important factor that we are still leading. But clearly, we are not waiting because jointly with Stellantis in this case, we have already designed -- we are piloting, really, in one market, a different customer journey, let's say, to anticipate this fear when this customers is going for our product and services, satisfying even better the customer and ensuring them that our products, our [indiscernible] in this space is [indiscernible] pilot customer or what the customer needs, if it's a B2B customer where they will get earlier than the customer the vehicle delivery to the event. That means being able as soon as they get the vehicle to start charging the product. So I said we define a different customer journey with Stellantis front-facing with the customers in advance and ensuring this result to the customer. As I said, we are piloting in one market, and this will be expanded. We will make the rollout in all the major markets during the third quarter of this year. So this will reduce the effect of this longer time between vehicle order and vehicle delivery, and this will give us a different trend of demand in this sense. Clearly, we -- even us, we met the supply chain disruption. Carlalberto already commented that, let's say, the timing for the -- one of the most -- couple of the most important supplier that we are using for our core technology is getting longer and longer. Clearly now, being them with capacity constraints in terms of output and demanding 15 months of timing between order and delivery from them to us. Yes, even us, we met this issue, especially on the second quarter. But like Carlalberto said, with the focus of the team, the industrial team, and the great support that [indiscernible] we can get from the [indiscernible] both TCC and Stellantis, we have been able in the second quarter to get allocation for the third and the fourth quarter, allocation for these critical suppliers that in the first period of time, even for the customer that they were already with the [ concession ] of 15 months, in some cases, they did several reallocation of product and components. So this is another important result that the team achieved. Clearly this effect, this result will be executed implementing during the quarter 3 to give us the possibility to have a safe supply chain in [indiscernible] part of new turmoil that [indiscernible] I'm hoping will not come in the market. We can give us more, let's say, confidence that in terms of supply chain, we'll be much, much stronger than what we met in the second quarter. Let's say, the third important execution that the team did in the second quarter and to keep growing in terms of internal capacity of production. We already met in this quarter 2,750 [ parts ] per week in term of capacity installed, but we are so confident that the volume are there, the potential is there and the volume are there that we keep it going. I can tell you that in the second -- in the third quarter, the team is executing, scaling up further the capacity installed. And the overall capacity already in the month of July will grow. Clearly, we have a target that has been already communicated to you for the end of the year. And we are indeed in this quarter, the third quarter, we are already executing this growth, and we move from the 2,750 parts per week, let's say, around 4000 parts per week, even a bit higher, but this will be communicated to you in the next coming week during the third quarter. So we are confident the team was able to keep focusing the execution. We are managing this turbulence with the customer, the main customer that is Stellantis with all the brands. In parallel with Stellantis, we have even executed the strategy to start the operation even in North America, starting from U.S. after we are out in Canada. So we are in the full period of execution. Execution is key. Given the comment of Giuseppe, even us, we are feeling that in terms of spike-up of pricing and so on and so forth, now that we are getting back the first signal that this is slowing down or, let's say, could be a bit stable. That means we give us even capability to forecast pretty well even our, say, our stock in house, of components. On top of that, as you know, for Atlante, we are executing the strategy to deliver for Atlante the technology needed to execute and to allow the plan, what I said for supply chain for Wallbox is even [ varied ] for the fast charger. That means we are keeping in parallel preparing and executing everything need to ensure as a perfect execution that clearly will start -- I cannot say that in quarter 3, we'll fix every single issue that is still present in the market because some issue are depending more from our customer than from our capability. But we are so confident that we'll get volume and level of sales according with our expectation that we are not releasing or reducing any activities because we need to prepare everything to support and to give to our customer everything that they are expecting and they will demand in the next coming months. Let's say, these are, I guess, the most important information that -- of what we did in this quarter. And I guess back to you, Carlalberto.

Thank you, Roberto. And I think we can now move to comment and investigate on the operational results of Atlante. So I leave the floor to Mr. Stefano Terranova. Stefano.

Thank you. Thank you, colleagues. Thank you, Carlalberto. And good morning, everyone. So this is a very important update for Atlante because it's approaching 9 months since I started my role and 9 months since we incorporated Atlante as a company. And -- but there's also approximately 1 year since Atlante was unveiled to the market as an idea, as a concept. So a very important appointment with you, investors, to show you what we have done in these 9 months. And I personally am very proud of what we have done. You can see the numbers. I will comment there. I will start with the numbers, and then I will add some color behind the numbers that you can see. First of all, you'll see a nice increase in the number of sites, which are under construction or online. You see that, obviously, at the end of 2021, we had the, let's say, the low-hanging fruits that have been built up since the announcement of Atlante, and we put them all under construction. At the time, we had only one site actually online and then see the nice progression through Q1 and eventually Q2 of 2022. Also, the number of fast-charging point of connection -- point of charge under construction keeps increasing nicely. And then most importantly, the pipeline on new sites under assessment, as Carlalberto mentioned, is a very important figure, 1.4 thousand. If we converted the entire pipeline, we would be done in a sense. But of course, there will be ratio of success on the pipeline, and therefore, we will have to keep increase in the pipeline, and we will have to keep working hard on origination. The other thing you can see in this slide is we have some of -- so I'm reminded of the key successes as well. We worked -- this is a testament of our multichannel approach of on-site development. We worked on -- we started, for example, a few months ago, on the public sector. And you can see we have delivered already a couple of important -- Buccinasco is within the metropolitan city of Milan is an area where we won an important tender, which will allow to electrify entirely -- entirety of the metropolitan demand in one single go. And the other one, very important one, community Padua is a city that we think came out with a very forward-thinking type of structure that they have. They wanted to electrify the [ urban ] hubs, mobility hubs, 2 very large parking lots where they have the main hubs for the trams as well. So it's a very nice combination of existing electric mobility and the new electric mobility. And more accounts are important clients that we work with. You can see IP of -- the IP Group. This is the largest -- the owner of the largest network of petrol stations in Italy with more than 5,000 petrol station, out of which, if I'm not mistaken 3,500 are their own property. And it is a privately owned group with no upstream operation, which is super important for us from a long-term perspective in terms of what type of partnerships we like to make. And with them, as you know, we announced an initial deal on a limited number of stations where we will test our relationship. And hopefully, and I'm pretty sure that the tester will be successful, after which we will discuss a much wider relationship and much wider partnership for the entire network. And finally, another project that I want to mention is also the Aeroporti di Roma. It was a private tender, but comparing one, basically all the top names in Italy and Europe were invited, and we came out as a winner of the tender, offering the best solution among the invited bidder. So these are quite important iconic successes as well as many others that we don't mention because the -- as you can see in -- with a pipeline of 1,400 sites, it would be impossible to mention them all. Most importantly, what you don't see from this number is the immense progress we are doing on building up the development platform. Atlante, as you know, was born with -- was created with very important ambitions. And not to be any one of the middle CPO, charge point operator, but we wanted it to be a tech-based charge point operator. Therefore, one -- the first thing we have to do, of course, is hire people, hire professionals in some key areas. We are doing very well in that front. Above my own expectations, we are now approaching 60 people headcount, which means, yes, above where I want it to be right now. So that's great news. And that's in the context of a tightening market for talent, I would say, especially in the very specialized sector and very small pool of talent for people with some expertise in eMobility. So we have all of the key resources in place. We have opened up offices in 3 out of the 4 countries. We have one patent in Portugal only for the time being, but we will be soon opening an office also in Portugal. And again, all countries are basically up and running with the development. In fact, out of the sites under construction that you see there, there is one in Spain and one in France also where we started construction. There will be many more. We have already signed up nice deals both in France and Spain. We are working on some deals in Portugal. Hopefully, we will be delivering also in Portugal soon. Then talking again about the platform as well as hiring the right people, we are continuing to develop a number of important tools and processes that will help the development of Atlante as a very unique network. So for example, on the technological front, we have been working very closely, especially with Roberto and his team, on developing the technology for the eStation that will be delivered as a pilot by the end of the year and proper rollout as from next year. In parallel, we have been working very hard on supply chain issues, let's say, on ensuring that the procurement strategy that we initiated in November last year for 2022 keeps up with our ambition. Of course, we also have been impacted by the disruption that you heard about both from Giuseppe and Roberto. So we are at the receiving end in a sense, and we had to cope with delays in deliveries of all kind of hardware, but especially the fast chargers. And in that sense, I would say we have an advantage because, as you know, we have targets published only for 2025. So we have the ability to manage our pipeline, and we manage it as a land bank in a sense. So we have been very true in not pushing our suppliers when not needed. I'll give you a particular example. In the case of Padua, the project was assigned quite early on in Q2 to us, but then the official paperwork was not completed by the public authorities. So we knew there was a delay, and we didn't push the suppliers when it was not needed. We knew that it would have been difficult for some of the key suppliers to deliver on time. So we have been working, let's say, in a very flexible way with that. And I think that's all pretty much. Just to highlight that we have set up the scene for the second half of the year, during which this number will improve dramatically, hopefully. So with the risk of continued disruption in timely delivery of hardware, but by those continued disruptions, I think by the end of the year, you will see some important results, including especially in France and Spain. And with that, I think I'm open to questions as and when question time will come, and thank you very much.

Thank you. Thank you, Stefano. I think you underlined the very important point, which is our attitude with our suppliers are real partnership mode, understanding their strengths, but most importantly, leaving the traditional procurement approach in order to build a transparent relationship with them. And I think what you mentioned, in Atlante is exactly the same attitude we have in other sectors like Free2Move and certainly also for NHOA Energy where the battery supply is not -- certainly, it's not a walk in the park. I think we can now move to our Q&A session. And together with Giuseppe, Roberto and Stefano, we are ready to take any questions you may have. So Chiara, the floor is yours to open the Q&A session. Thank you.

Thank you very much. So I think we are now ready to open our Q&A session. [Operator Instructions] And I think we already have some raised hands. I will just ask Mr. Pozzi from Mediobanca, if you can activate his mic.

Yes. I hope you can hear me. I have a new fiber connection. Hopefully, that works. I think it's quite reassuring to see material growth in revenues sequentially as well given the status of the global supply chain, as you mentioned in the opening remarks. And I think the -- if you look at the first half revenues and if I look at the guidance for 2022, I mean, you are definitely in a good shape. And I was wondering whether potentially, we could see an upgrade in the guidance, but also I was wondering what is the shape of battery deliveries because I think that is the main driver for the growth in revenues in Q2. And I was wondering whether we had a peak in Q2 or we are going to see more battery deliveries throughout the second half that is underpinning a strong level of revenues also for the coming quarters as well. And also in battery storage, I think going back to your opening remarks, you mentioned that, of course, the backlog has taken a bit of a hit because of the high lithium commodity prices, in general, both you mentioned potentially [indiscernible] may come back. And I was wondering whether you have some visibility on new project potentially coming back either in Q3 or in Q4. So that's the first question on mainly the battery storage. And then I think the second one on eMobility. Of course, revenue is not great probably in Q2. But despite that, the conversion rate in Stellantis is flat. So that, I think, shows there is a sign that the whole sector is going through material disruptions. And I was wondering, you mentioned in Q3, potentially, that could -- and if you can give us a bit more color on that in Q3. Also, you mentioned a new commercial approach front facing the client. And can you give us a bit more color on what you mean by that and how that is going to play out in the second half of this year?

Thank you, Alessandro. So in the right order, I will take the question on guidance upgrade and then revert to, first, Giuseppe and then to Roberto to deep dive on the residual questions. So guidance, yes, I mean, we -- certainly, this is not a strike, okay? We see clearly the trend in this direction. And that's the reason why we -- in the recent weeks, we also declared that we are not in a position to exclude a guidance revision upward, obviously. What we will do is to complete the analysis and the visibility because we do consider with extreme care a guidance revision upward. But certainly, given the results we achieved in H1 and the level of visibility we have on H2, we are confident that we -- that the guidance in the coming weeks potentially with the publication of H1 results, the full audited H1 results by the end of July, beginning of August, we will be in the position to tighten the guidance and to revise upward, obviously, towards the high end of our current guidance and potentially other. So that's a clear trend. That's a clear visibility we have. However, given the current market disruption -- so we already have visibility on revenue conversion. What we are fine-tuning is the current status of the market in terms of supply chain. So that's the reason why we have not done it with Q2 trading and operational update. But as I said, I'm confident we will be in the position to complete that visibility in that direction by the end of the month then with the H2 financial statement. Then let me revert to Giuseppe for the first 2 questions on battery storage, and then I will take back the stage to give a brief comment on your question related to eMobility to leave then the floor to Roberto. Then the question, Giuseppe, the first 2 are the shape of the battery deliveries and on battery storage, new projects at site in Q3, Q4. So order intake, I think, was the main -- order intake increase in Q3, Q4. I think we can summarize the question of Alessandro in that sense. So Giuseppe?

Thank you, Carlalberto. So on the first question, timing of battery deliveries. Just to be a bit concrete, so during the second quarter, we had delivery, to a large extent, of the battery supply to our synergy project in Western Australia. So the batteries are on site. One important thing, it's not only batteries on project of that market. So there are situations in which we deliver high-voltage substations like because of Australia and so when you have large transformers that also matters and with quite a high-voltage equipment. So while, of course, batteries are a key driver, there are other elements in the supply, particularly in projects in which there is also interconnection -- high-voltage interconnection that is part of our scope of supply that matters. As you know, we have a large -- 2 large projects in Taiwan that are also expecting battery delivery over the next several months. By and large, we have significant batches of battery deliveries schedule in Q4, that's in Q3, so largely in Q4. To what extent they will fall in later part of Q4 or early part in Q1 2023, which is, of course, from a revenue perspective and margin perspective is relevant aspect, depends in part on supply chain conditions, in part depends also on operational progress on the specific projects. So under such circumstances, batteries are not on the critical part. And battery warehousing is quite a challenging aspect. We have some flexibility and -- both on our side and on supplier side in calendarizing delivery in a way that is most efficient. So again, don't look at this as a rolling mill. The logistics of delivering these project is a complex exercise. So we do expect significant deliveries of battery in the fourth quarter, in particular, but there are elements both in our control and not in our control, which may move the numbers between one side and the other of 31st of December. This is a reality. I mean there is nothing pathologic in this. With respect to the second question, as we wrote, we are shortlisted in 5 projects. We are quite optimistic that a few of those will reach final investment decision stage over the next 6 months. And this is -- and our objective is to get at least one of those. I'd rather not comment on the average size. There are also a few smaller projects in which we are well positioned. But clearly, in this position, we're talking about large projects. Our objective is to convert at least one within the next 3 to 6 months because that is what we need in looking at our ambitious objectives that are not disclosed yet on 2023. And I wouldn't say more than this. Our objective is to convert at least one large opportunity within the next 3 to 6 months in order to be -- where we want to be for 2023. Carlalberto, back to you.

And basically, just going back to the battery storage revenues. So I mean should we -- if we look at Q3, I mean, should we expect roughly in line with Q2 in terms of revenues? Or there has been substantial deliveries in Q2 and maybe not as much in Q3?

I would not -- never extrapolate on a sequential basis on a quarter-by-quarter basis. I can already answer to you that there is no -- there is -- the battery delivery in Q3 is not going to pay in the same order of magnitude of Q2. But again, this is obvious in the way the business runs. So I would never look sequentially. We look -- we always look on an LTM basis. And so this is the way we assess our performance. It's always tracking 12 months. Never tracking 3 months because it's -- I mean, when you've large -- you work on contracts on a large -- on large contracts list. And we have not yet in the site of 15 large contracts. So we had 3 -- 2, 3, 4 large contracts, then, of course, there is volatility in the revenue recognition on a quarterly basis.

Okay. Then I think we can move now to the mobility question raised by Mediobanca. So Alessandro, you correctly pointed out that our conversion rate is flat. So even if revenues are not exciting, fundamentals are there. So I totally agree with you, Roberto. The question was on essentially Q3 and Q4 reverts, so change in market conditions in terms of expectations, and then some color on the new commercial approach, which I would not, let me say, consider it as a change in the commercial approach. I would rather consider it as a top up, okay, to even accelerate the conversion rate. So Roberto, will you comment on that, please?

Sure. So in the -- first, let's look internally. As I said, we prepare our internal field to face with the volume increase and consequently with the sales increase, so make sure the supply chain, the inventory of material, critical material, our production capacity. And that means ready to go facing with clearly different volume that we had so far. So internally, we are ready. Exactly like Carlalberto was saying and because of -- it is a reality that -- and comparing with the past, even the recent past in the automotive industry, now the customer instead of the regular, let's say, 6, 8, 10 weeks between order and car delivery waiting months, months that means even over 6 months, and normally because the customer was ordering through dealers our product more or less 1 month before the car delivery, when the dealer is calling the customer to say, okay, your vehicle will come in 3, 4 weeks, we design. But in addition to the channels that we keep with Stellantis in this case through a service and through dealers, in addition to benefit of this longer time, we are piloting, I said, for a couple of markets, France and Spain, to be clear, a different type of approach. So as soon as the customer is entering in a dealer, is ordering a vehicle, we received the customer set. The contract of these customers, our charging specialist will contact these customers directly, and in a really lean process, will offer the customer to anticipate the possibility to get the charging points installed at home. So this -- again, we are piloting in France and Spain and can already tell you that it seems I want to wait a bit more of, let's say, statistic. But seems that the customer is even better satisfied in terms of quality, in terms of timing, in terms of speed of this process, again, I said, we are piloting and we are starting. So quarter 3, ready in terms of internal partner, an additional tool to face with the market, with the customers. What am I expecting? Clearly, quarter 3 is a transition quarter. Clearly, quarter 3, we all know that in Europe is not really the best period of time in term of volume for automotive and economic product because of several summer break. It's not the best period of time. Well, we can exploit all the potential that clearly is in the market. There are a lot of backlog in the automotive side in terms of customers that are awaiting vehicles, and we need to exploit all this potential with Stellantis. [ That's why ] I'm expecting quarter 3 as, again, a transition quarter. Quarter 4, I'm expecting really much, much better results in terms of pipeline of customers and consequently, conversion in sales for our organization, for our team. I'm now really much more confident because as I said, in quarter 2, we were able to fix our supply chain in terms of critical core components that now we can really plan how we can push, how we can pull ahead of this potential exploiting as much as possible using all the channels. So the one that we planned with Stellantis and this new one, [ better ], during the month, at the end of July, a bit in August. And for sure, in September, we'll roll out even in other important markets across Europe where Stellantis is really a leading player in terms of volumes...

Just a follow-up. How do you exactly going to fix the supply chain in Q2?

We got -- thanks again to the support [ to our 2 ] shareholders, TCC and Stellantis, we were able to deal with these couple of critical supplier in our bill of materials that were even the core of our product to get allocation from them that starting from this month will have, let's say, a regular flowing of material and even increasing, to be clear, our inventory because I want to have flexibility to deal with our mix, with our product with these 2 actions that was first [indiscernible] negotiation. So receiving allocation that were not in their pipeline because we were not asking them 15 months ago this volume for the year. And second, again, clearly increasing the inventory at certain level, clearly controlling the inventory probably with the pipeline of ordering that we are receiving. But these 2 actions is giving me more confidence that now I can face with the higher -- the demand that will be higher, at least I'm speaking starting from quarter 3 and for sure in quarter 4.

I think we have another question. Yes, we have -- raised the hand by Guillaume, Societe Generale.