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

Good morning, ladies and gentlemen, and welcome to NHOA Group Investor Call on Full Year 2022 and 2023 Highlights. The investor call will be opened by Carlalberto Guglielminotti, CEO of NHOA Group, and we have the pleasure to have with us today also Nelson Chang, Chairman and CEO of TCC and Chairman of the Board of Directors of NHOA Group. With Carlalberto Guglielminotti and Nelson Chang, to explain all details about the full year 2022 and 2023 highlights, will be Alessio Caruso, Deputy CFO of NHOA Group; Giuseppe Artizzu, CEO of NHOA Energy; Stefano Terranova, CEO of Atlante; and Gabriele Tuccillo, Chief Integration and Strategy Officer of NHOA Group. Guglielminotti will open the call with the main 2022 and 2023 guidance, and then we leave the floor to Nelson Chang for his overview. Afterwards, we'll go deeper in the results by global business line with Guglielminotti and Artizzu followed by the financial analysis by Alessio Caruso. At the end of the presentation, 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 and 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 leave the floor to you, Carlalberto.

Thank you, Chiara. Thank you very much, and good morning, everyone. It's a real pleasure to be here today to talk about our results and what has been another turning year for NHOA as a group. And to sum up quickly all the amazing achievements of this year, I would like to show you a quick video that I think summarizing less than 1 minute what we have done this year. Thank you for that and enjoy the video. [Presentation] Thank you. I think with this video, you can really grasp in just 1 minute what an exciting and eventful year we had at NHOA. And as we already talked about during our Q4 2022 trading update, we all know how complex 2022 has been from both a social and economic perspective because the aftermath of the COVID-19 pandemic and the war in Ukraine along with the related difficulties affected the whole world on many levels and NHOA Group was no different to this equation, and in terms of raw material procurement, in terms of cost of financing and components of procurement for all our 3 business lines. And thankfully, we could count on our main shareholders, TCC, and I take this occasion to thank Director Nelson for the help and support you give every day to NHOA. And with TCC, we have the same long-term vision, we share the same values, and we have a broader commitment towards our people, towards our planet and towards our future and all our stakeholders. And our results must be read in this context. EUR160 million revenues, almost 5x compared to 2021, backlog and purchase orders totaling between Free2move eSolutions and NHOA Energy over EUR360 million. I mean, 2022 has been a turning point for all our business lines because in energy storage, which is, I mean, the undisputable growth engine of the NHOA Group, we reported more than 9x revenues year-on-year. EBITDA of over EUR2 million, order intake of EUR240 million and eventually a backlog at year-end of over EUR300 million with 1.4 gigawatt hour projects under construction in 4 continents and over EUR1 billion pie. EMobility has been a difficult year with supply chain issues and the reorganization started just in early November 2022. And we know that the OpEx structure increased. 2022 has seen essentially immaterial revenues that turned into a huge loss in 2022 and several write-downs. Several write-down that we have carried out in a very disciplined way, the same discipline we used process with the forensic investigation what happened, the same discipline we applied in changing almost entirely the management team in the same discipline. We have been reshaping the whole internal control structures and make the restatement we already announced with the Q4 trading update. And then with the new CEO, Mathilde Lheureux, Free2move eSolutions eventually reached at the very beginning of 2023 and collected approximately EUR60 million of purchase orders that drove clearly the trajectory towards 2023, which will be the first year of real growth that will start officially as planned from the second quarter. And then we have the EV fastcharging infrastructure that in slightly more than 1 year of activity closed 2022 with 2,000 fastcharging points online under construction. And let me anticipate an obvious question, yes, almost the majority is already online, so close to 1,000 are already online, which represent approximately the aggregate of the whole Italian network installed by major utilities altogether in the last 5 years. And not to mention that the over 2,700 new sites in the pipeline that are giving the clear trajectory towards an acceleration of the Atlante rollout between 2 and 3 times in terms of speed compared to the Masterplan10x announced 1.5 years ago. Then, thanks to these amazing results, we can reconfirm the guidance we presented already during our Q4 trading and operational update. So revenues at Group level ranging from EUR220 million to EUR280 million. So NHOA Energy would be not only EBITDA positive, but starts to generate positive cash flow and EBITDA between EUR5 million and EUR10 million. In Atlante, we push further the development of its network even further, reaching over 3,000 points of charge online and construction by year-end. Acceleration indeed, acceleration that I mean I saw this morning some comments by some brokers talking about loss-making Atlante division, sorry, but this is not business line loss making. Sorry for that, but I have to clarify that. I mean loss was on Free2move, yes. And we have been very disciplined in carrying out actions to ensure that in 2023, this would not happen anymore. We've been extremely transparent and extremely disciplined in treating what happened. But again, I do not see any loss-making division in Atlante because as long as NHOA Energy is EBITDA and cash flow positive, generating cash, which is a unique play in the market because I would like to remember to everybody that's all pure plays in energy storage that I know are not EBITDA positive. And while Atlante is again not a loss-making division but rather is investing into core infrastructure that is crucial for the future of NHOA and the future of our planet. And in this direction, I think we are on the same page as a management team and even most importantly, we have our Chairman Nelson Chang, and I'm really honored now leave the floor to Nelson Chang, our Chairman; that today is with us in our Milan headquarters to share with you all his vision behind our results and the vision that we fully embrace at NHOA and the vision that is guiding our daily efforts in accelerating and accelerating what we are doing. So thank you in advance, Nelson. This floor is yours.

Thank you, Carlalberto. [indiscernible]. Good morning, everyone. I'm so happy to be here in Milan. It's such a wonderful weather in Europe. But with this wonderful comfortable spring weather in Milan, we must not forget there are many extreme weather conditions still happening rest of the world. So we still firmly believe that together, NHOA and TCC, our contribution to the energy transition. Yes, Carlalberto just mentioned that 2022 is a transition year, actually it's more than transition, it's actually pivotal year. But again, he made the thing sound very easy, but reality 2022 was an extremely harsh year worldwide for not only the weather, but most important of all, that Russian-Ukraine war triggered a slews of energy bumps, and with that this ensures to know that energy transition in the world is utmost important to meet not only climate challenges, but also for the social as well as economic improvements of human society as a whole. Last year, the energy spike across the world almost on every sector of energy supply. Despite that fact, also because we're looking at quite a bit of supply chain issues, I think the NHOA management, NHOA team did a fantastic job. Under such harsh condition, we met our projections on topline as well as on bottomline. And I also like to say to enhance what Carlalberto just said, Atlante is important. We cannot look at it very short term. We are looking at the infrastructure play, has to be a long-term look. And as the infrastructure play, we need to make investment first. This is not a service organization, so you can see immediate returns on investment, will take a little while and deployment. And I think Stefano has done a fantastic job on positioning our PoCs and rolling out our PoCs. And as you can see on the previous summary, the component I show you that this year, we will have about 3,000 PoCs either live or under construction, and the seed is growing. I must tell you that I'm extremely happy with Atlante's movement. Of course, Giuseppe's work in NHOA Energy able to deploy storages across the world under different aspects of different grid strategies, he's also done a great job for the company, but also to earth. The weak point, unfortunately, is Free2move. I think Carlalberto has just mentioned before that we're already making some major adjustments in the Free2move area. Hopefully, this year, we will see some major changes, and Q1 already, we see some ordering coming in for Free2move. So we do see a positive direction for Free2move. 2022, a difficult year. We did a good job. I need to comment again of the management team and everyone in NHOA. And 2023, ending of COVID, but unfortunately, in the last couple of weeks, we start looking at some fluctuations on uncertainties happen in the capital market. And I want to assure all the investors, we have already spent several days working with the management team with Carlalberto to pan out the future of NHOA under such fluctuating capital market scenarios. And we will put the concept together and plan together. Surely, we will come up with some suggestions. And I'm sure all of you will see it, but I'm almost very comfortable about 2023 despite the fact of the fluctuations in the capital market. TCC, as a major shareholder of NHOA, we continue to share our belief in the energy transition vision of this business, and we also continue to share our belief that through energy transition, we can reduce the climate risk for the world. And this is something that we are very happy to be part of it, and we are also doing our best to supply our technologies, our abilities to help NHOA to move forward, in Europe, and as well as for the rest of the world. I believe that later on, when you deep dive in all the numbers, you will see what a good job that NHOA team had done in 2022, of course, and we have some very good beginning for 2023 to report to all our investors. Thank you very much. Looking forward to your questions, and we'll continue today's presentation. Carlalberto, please proceed. Thank you very much.

Thank you. Thank you, Nelson, for your inspiring words. And as I already said before, it's really a pleasure for us to have you here in Italy, and it's always a precious occasion to understand how our shared values are important for our company. Let me now quick [ cash ] on NHOA Energy, and then Giuseppe will be deep dive further commenting our financial results along with Alessio. NHOA Energy, I mean, is reconfirmed once again the main growth engine on the Group in terms of financial results with a series of iconic successes achieved in 2022 and a strong pipeline of new projects for 2023 and onwards. In 2022, NHOA Energy was awarded among others the flagship Blyth Battery storage project by Neoen for 400-megawatt hours in South Australia, the supply of around 100 megawatt hours of energy storage capacity in the Americas as well as over 100 megawatt hours of capacity in Asia with TCC. So over 300 megawatt hours of capacity were under or nearing commissioning at year-end, the company industrial plants in Cosio Valtellino assembled 230 megawatt hour of storage during 2022. And since October has been producing at a pace of 45 megawatt hours per month. So the global origination and delivery effort is now firmly established across 4 operational hubs in Houston, Milan, Perth and Taipei, working synergistically through the value chain from a commercial development through the long-term service. And we see in this slide the results is very clear. We can now move on to talk about Free2move eSolutions. Despite the challenges faced in 2022, Free2move eSolutions led by Mathilde Lheureux, has taken steps to advancing development potential of the EV market. And we are making progress in restructuring our operations and prioritizing the sale of eProWallbox to meet the needs of Stellantis customers. Stellantis, that still is an unparalleled potential for Free2move. And as you have may read by our updates on February trading, Free2move eSolutions has already received approximately EUR60 million in purchase orders. So that's a very good signal for 2023 growth. And as you can see, Free2move eSolutions' eProWallbox anyhow is always close to Stellantis for new EV launches in 2022 with the Alfa Romeo Tonale, the new Peugeot DS 7, and the new E-Doblo of Fiat. And last but not least, Free2move eSolutions will also partner with Maserati and Alfa Romeo for providing them with charging services in their dealership. Same also for the future launches like the Jeep Avenger, which recently received the title of Car of the Year 2023. So a clear commitment of Stellantis, then, obviously, we have to wait till the second quarter to see the first results in financial terms that hopefully will translate also in revenues and margins, inverting the direction of 2022 very clear. And now passing from EV charging solutions and devices to our EV fastcharging infrastructure, let's move to Atlante. Atlante just started its operation a little under 1 year ago, we've set up with legal entity with Stefano Terranova leading the role of Chief Executive Officer in taking the role in October 2021. If you think about it, Atlante reached already thinkable results, forming partnership and setting up charging stations in iconic locations. And at the end of 2022, Atlante already had over 2,000 charging points on line under construction through Southern Europe, approximately 1,000 already online as of today, including well-known stations such those that are the Rome Fiumicino Airport, the Misano World Circuit, the Milano Linate Airport in collaboration with Free To X, all service areas in the Milan highway, you can see with your eyes, the construction sites are almost completed. The first station in Spain, the first in France in 2023. Atlante was granted also, was awarded with EUR23 million grant from the European Union and then acquired the majority stakes in Portugal KLC becoming fourth largest operator in Portugal and the first one in fastcharging. Then we secured tenders for the creation of innovative hubs in Padua, in the Milan metropolitan areas, and then eventually, in the very first 2 months of 2023, Atlante inaugurated the first fastcharging stations located within dealership at Stellantis network and acquired the Ressolar e-mobility business units, then for increasing significantly the presence in Northern Italy. And in March this year, we already announced exclusive partnership with To Dream to electrifying Turin right at the end of the A4, which is one of the most important highways in Italy with over 130 charging points, including fast and ultra-fast fastcharge. And then last but not least, the charging points in Saint Memmie in France went online. And this week, we also announced the new design of our station along with Bertone design that is an iconic design that will characterize all stations of Atlante in the coming years. Atlante now employs over 100 professionals, including many young talents and has set successfully operational platforms in France, Spain and Portugal, along with Italy, all accomplished in just over 1 year. So an unparalleled rollout and unparalleled acceleration 2, 3x faster than expected, if I may. And now with that, I will now leave the floor to Alessio Caruso, our Deputy Group CFO, to go deeper in the financial analysis of our results. So Alessio, floor is yours.

Thank you, Carlalberto. So going into the full year 2022 numbers, starting from the top line, the Group registered EUR166 million of revenues this year, which is an amazing result as we meet the high-end guidance and then exceed also the upgraded guidance of EUR160 million with a gross margin of EUR50 million, which is around 9%. In terms of personnel cost and operating expenses, we have a EUR31 million personnel cost and EUR70 million operating expenses. That led to an EBITDA of minus EUR33 million. Let's give some color about this number because, of course, our business is composed by 3 different global business lines, which are in 3 different stages, let's say, of the business. So if we look at the storage business, as you anticipated, we had amazing results reaching EUR2 million positive EBITDA for the year 2022, while we suffered with the Free2move eSolutions business, which registered an EBITDA negative for EUR19 million, for which we can deep dive later on. In terms of below the EBITDA line results, we had D&A for EUR7 million, in payment and write-down as you anticipated of EUR6 million and nonrecurring items for EUR3 million. So overall, concluding with an EBIT of EUR50 million. In terms of backlog for the next year, for the energy storage business, we have EUR301 million backlog, spread all over Asia, Australia, Latin America, mainly and eMobility purchase orders backlog of EUR60 million, which is mainly located in U.S. If we move to the other slides, we have revenue and other income deep dive for which I would like to spend a bit of color on. So compared to 2021, we have an increase in revenues of 4.5x. So we went from EUR30 million to EUR166 million, which allows us together with the backlog, just presented, to have guidance for 2023 between EUR220 million and EUR280 million. In terms of CapEx, the 2022 year, so EUR42 million investments, which are spread mainly in the EV infrastructure and the vehicle-to-grid [indiscernible] project within the Free2move eSolutions business line, which is almost double number compared to 2021, where we have a EUR23 million CapEx. Again, coming back to the EBITDA, it's important to give more color. So the spread is below EUR2 million for the energy business, minus EUR19 million for Free2move eSolutions and then the obvious minus EUR10 million for Atlante, which is in an investment phase. For 2023, we foresee a guidance between EUR5 million and EUR10 million positive EBITDA. Of course, the Group has been growing in numbers also in terms of headcounts. We almost doubled our people. So we went from 236 people to 451 people, which is, of course, a reflection of the efforts we are putting in our growth. If we look at the net financial position, we moved from EUR75 million positive cash position to a EUR4 million cash position, which is a natural effect of our efforts we had in 2022. So namely, the investment we had in Atlante, the natural working capital absorption at NHOA Energy level as well as the funding we had at Free2move eSolutions level. Therefore, given the result has shown, we have a decrease in equity to EUR64 million. I'll now give the floor to Giuseppe to deep dive a bit more on the energy business line.

Thank you, Alessio. Good morning, everybody. 2022 was the year that put us in the map of the global energy storage system providers. Our revenues went up by 10x, and we achieved a positive EBITDA. So the EBITDA number is important because this was achieved despite 2 things. First, the project portfolio mix was of a lower marginality compared to what we have in our backlog because we price aggressively part of our scope of work. This is something that we already told market in the past, but this is not recurring. And second, as you see from the geography breakdown, this is mostly the result of our projection into the Asia Pacific region, of which we are proud, and we thank TCC for providing the platform for that. But at the same time, you should consider that for us, it's more expensive to [indiscernible]. So projecting into Asia Pacific for a European company for an Italian company, it's not trivial. And balancing of the portfolio which we foresee in the future towards Europe and North America will add also from a profitability perspective. So again, we achieved positive EBITDA despite the fact that we had an unusually low margin project portfolio delivered in the year and second, that the geographic spread of our portfolio is challenging from a logistics perspective. So we multiplied by 10 our revenues. And despite that, we increased by 50% our backlog. So we not only replaced the backlog conversion into revenues, but we amplified our backlog. So we closed the year with over EUR300 million of backlog, so an order intake of EUR250 million. So 2022 was not a one-off. It is the start of something as you can clearly see from our backlog trend. Pipeline stays around $1 billion. We are more and more disciplined in the definition of pipeline. And you see from the diversification of the pipeline, it already shows a more geographically balanced portfolio. From a cost perspective, our story is a story of operating leverage, the ability to deliver larger projects with a cost structure that becomes more and more efficient. So we closed the year with 171 people within NHOA Energy. And as you see from the personnel cost evolution, the core personnel cost went up only marginally. That is partly also to do with the fact that we have capitalized more in R&D, but it's also a matter of discipline in the way we are growing our engineering base. From a research and development perspective, we significantly increased our research and development effort, even though in proportion to revenues and marginality is going down very significantly from a percentage perspective. And again, this is an effect of operating leverage. But still, in absolute terms, we are increasing our research and development effort mainly for 3 reasons. The first one is from a product development perspective, we are looking into optimally positioning to exploit the opportunity of the Inflation Reduction Act and the Green Deal Industrial Plan in Europe. We have a very flexible product sorts in mix. And therefore, we are ideally positioned to capture those opportunities. Frankly, we love a global supply chain. So we are not enthusiastic about strategic decision-making or product development to be driven by industrial policy, but still, we are optimally positioned to build on the opportunities coming from industrial policy decision. Second, R&D work stream is around circularity of our supply chain, so everything that has to do with battery reuse and battery recycling on our own and with partners. And the third one is, again, maximizing operating leverage. So everything that has to do with operational efficiency on both on-site activities and on aftermarket services. So digitalization, reduction in on-site activities and everything that has to do with maximizing operating leverage. This is the story. And this is a story that is only at the beginning. Back to you.

Thank you, Giuseppe. So going to the eMobility global business line deep diving a bit into the number of 2022, we see in 2022, a decrease of around 20% in revenues compared to 2021. So we registered a EUR11 million in revenue. That has to be coupled with the intercompany revenue from Atlante totaling EUR19 million. The revenue mix is deriving mainly from the Stellantis Group. In terms of volumes, the business sold around 30,000 residential and B2B WallBoxes and around 350 public AC and DC chargers. Of course, the results if we think about the EBITDA level reached by the company is evenly affected, of course, by the cost structure, even though for 2023, as we said, we already have purchase orders for EUR60 million that give, let's say, a better life for 2023 results. The team has been growing accordingly to 163 employees, mainly focused on the business side, of course, and for CapEx as anticipated, the main part is deriving from the vehicle-to-grid project. If we go then to the Atlante slide, of course, it has been an year of big investments in both infrastructure and operational engine of the company. So even though this was the target that we had the first sales of around EUR0.6 million and an obvious EBITDA of minus 10 because of the phase of the company. As for the CapEx, the important message here is the EUR14 million of investments in ADC under construction and online out of the EUR19 million shown in the slides around 4 countries, together with this investment plan, of course, we grow the numbers in terms of personnel, reaching 92 people for coming for 4 countries, so mainly in Italy, but as well as we have now established presence in France and Spain as well. So I will then give the floor back to Carlalberto.

Thank you, Alessio. Thank you very much. And I think we can now move on our Q&A session and together with Giuseppe we stay on together with Alessio in case your question on the field, also our Chairman, Nelson Chang, we are ready to take any questions you may have. Chiara, floor is yours to open the Q&A session.

Thank you very much. We are now ready to open our Q&A session. [Operator Instructions] We already have some questions coming. I will ask to Mr. Pozzi from Mediobanca to open his microphone.

I was wondering if you can give us perhaps a bit more color on the evolution of revenues and profitability for e-mobility during 2023? Also, I was interested in maybe knowing how much of this EUR60 million orders likely to be booked as revenues in '23 and passed maybe somewhere in '24 as well? And also, a second question on net cash position. It was down to EUR4 million from EUR74 million. And I was wondering what are your CapEx investment trends in light of the reduction in net cash for 2023 and whether potentially this year will be the right time to find partners for Atlante, given that you already have 1,000 charging points already operational and a lot more to come in '23.

Thank you very much for your questions. Essentially, if I can sum up, those are 3. On revenues and profitability for Free2move and orders booking, what I can tell you is that certainly, vast majority, we do expect the vast majority of this order book will be converted into 2023 revenues and the margin as well. So that's the good news. Then the first start of booking those revenues will be in the second quarter. So we hope to see starting from the second quarter. By the way, as announced during the November trading update, if I'm not wrong, so as planned, the second quarter, you will see the revenue recognition of the order book we already get at the beginning of the year. On the cash position and CapEx plan, I mean, the CapEx plan was already announced with the master plan [indiscernible]. So we expect to invest approximately EUR100 million in aggregate over the horizon of the plan. For Atlante, the main CapEx are for Atlante, obviously, Atlante is an infrastructure division. And frankly speaking, this will depend from the speed of rollout, but we have not slowed down so far. So that's the reason why you have seen in such a decrease in the cash position. This was obviously planned and this is in line with the current strategy that we are deploying. On the question related to the funds for Atlante, again, let me just reiterate what we have declared publicly many times. We are absolutely aware of the fact that we have significantly accelerated the rollout. We have declared many times that we were not excluding and we were actively assessing all different financing opportunities, including in the press release that we released today that we are exploring different financing opportunities being fully aware of the speed of the rollout that is currently in place. On that specific aspect, the process is ongoing with the support of TCC. So you can trust the management that situation is fully under control. We know what we're doing and the cash position evolves as planned.

And just as a follow-up on the mobility order. Can you give us maybe more granularity how much of that comes from U.S. versus Europe versus maybe by customer type or by product type?

I can say almost entirely from U.S., the order book that we announced. We have not announced any order book in Europe. We are actively working to restart the European operation. you have clearly seen in our slides, in our announcement that the eProWallbox is close to any new launch of Stellantis cars, okay? However, you might really understand that from the launch to the order and then to the booking of the revenues, there is a lead time, which is absolutely normal. Again... [Audio Gap]

Okay. I think I lost you for a second, but thanks, and also, just a follow-up on CapEx. Have you finalized the CapEx plan for 23 at the Group level?

Yes. Indeed, the CapEx plan has been analyzed also at the Group level, even if, again, the vast majority, the strong majority of the CapEx is related to Atlante. I mean if you analyze even the 2022 CapEx for NHOA Energy are absolutely modest compared to the one we are going to deploy in Atlante. And at the same time, what I can tell you is that at Free2move in the context of the current reorganization that is ongoing, we applied an extreme discipline in CapEx deployment and discipline that we implemented after the October and November announcement at Free2move level.

Please do not expect major CapEx at Free2move level. CapEx at the NHOA Energy level will be essentially in line with the ones that we deploy in 2022, while the real CapEx impact in 2023 will be Atlante obviously.

And versus '22, is it flat to slightly up the CapEx for Atlante?

The CapEx for Atlante, the current plan with the current space, obviously, in terms of CapEx will be higher.

We also have other questions coming from Mr. Muros from Societe Generale.

I have a lot, 5 questions here written down. First off, could you tell us approximately how much of the negative EUR19 million eMobility, EBITDA in 2022 was recurring? Second question, a bit of follow-up on the first one. But essentially, looking at the amount of cash that has been burnt in the second semester, understood and understanding that the majority of the funding requirements come from the infrastructure division. Should we expect as well financing requirements on the other divisions, namely at the NHOA Energy level for 2023? Third question will be on energy storage. So given you're still high dependence for the 2023 guidance at the storage level. Could you comment on the execution from the ongoing projects. Moreover, could you let us know how are you positioned on your close to EUR1 billion pipeline? And last question will be on the ongoing internal investigation at the eMobility division. What should we expect from potential impacts on other divisions and particularly thinking about the still quite young infrastructure business. What should be the consequences for the other businesses in [indiscernible]?

Let me take the first and the second and the fourth, and I will leave to Giuseppe the third one. So EUR19 million negative EBITDA is Free2move, how much is recurring? Zero. What happened in 2022 cannot happen again. And I think I have explained very, very clearly the discipline we applied after the October events, then I will comment on the investigation, which was your fourth question. And essentially, the only reason why, and then I leave to Alessio maybe to give you more color, but let me anticipate the only reason why there was a negative EUR19 million EBITDA was because it's not the only one, Alessio would be more precise, but the main one was the fact that the top line was not there. So the OpEx structure was there. The top line was not there. And as a result, the mathematical results. This had a huge impact on EBITDA. Then Alessio, you can elaborate.

Very, very briefly, of course, the main reason is the one we just explained. So we missing revenues and therefore we missing gross margin. As for the EUR19 million, of course, it is also affected by a net structure compared to the results in terms of revenue. So for 2023 year, which needs to be transformational for Free2move, we also try to reshaping our operations in order to have it, let's say, more comparable with a more light structure and so more comparable to the revenue coming from the business.

Indeed, [indiscernible] then on the cash burnt of the infra division, again, let me clarify again. This is not cash burnt. This is cash invested into assets, okay? But having said that, the question was, do we expect NHOA cash burn in the other division burning cash in 2023? Absolutely, no. NHOA Energy is EBITDA positive, was EBITDA positive, will be EBITDA positive. We announced a clear guidance and is also cash flow positive. Then, obviously, we will have working capital fluctuations and volatility, which is absolutely normal, having over EUR300 million of backlog of orders. But working capital side, NHOA Energy will not require any cash and will be cash flow and EBITDA positive. So let me very precise on that. And then I leave to Giuseppe to comment further. But before leaving the floor to Giuseppe, I take your fourth question that was on the Free2move investigation. Do we expect consequences on other business like? Not at all. That's the firm answer to your question, not at all. Just for sake of prudence, we have clarified once again the investigation is ongoing for many internal reasons. We decided to communicate very transparent from that to the market. But in terms of accounting, the consequences have already been factored in into the restatement we have made that is almost immaterial on our results, as you might have noted and as we already announced, by the way, with the Q4 trading and operation updates. So it's a pure internal investigation. We do not expect any consequence on other business line. There is no reason for that. And so no propagation of defects and the Free2move level in any event, all accounting impacts and outcomes of that investigation has already been taken into account into the restatement that again is absolutely immaterial in our financial results. Then I leave to Giuseppe on your third question related to the execution path and pipeline positioning. So Giuseppe, floor is yours.

In terms of status of execution, we are absolutely on track, in a month's time, we'll provide our quarterly update on execution, but I can anticipate that the Hoping 1 project in Taiwan, 300-megawatt hour is in commercial operation, our New Caledonia, the expansion of the New Caledonia plant, a 10 megawatt hour expansion is in operation. We have completed the testing of 2 out of 3 fast reserve projects in Italy. They will come in commercial operation within a few weeks. We have mechanically completed the project in Massachusetts and importantly, the synergy project in Western Australia, 200 megawatt hour is transitioning from cold commissioning to hot commissioning. So it's fully built. And the rest of the portfolio is under construction or in the case of Light, we are in the engineering phase. So we will provide a granular update in a month's time, but definitely, we are progressing at full steam on the execution side. From an origination perspective, the EUR1 billion pipeline, also on that, we will be granular in a month's time, but we are either shortlisted or preferred bidders on between 5 and 10 projects with a strong diversification geographically. In terms of contribution to 2023 growth targets, we don't need much more. So this is already looking forward to growth in 2024 and 2025. So the degree of visibility that we have for 2023 is already extremely strong. So that pipeline management and conversion is more related to further building up our prospect and our ambitious targets for 2024 and 2025.

Okay. I think we answered to all your questions.

Just 2 quick follow-ups. The first one was on Alessio comment regarding the lighter or making a lighter structure at the eMobility level in 2023. And most particularly, what does it or a leaner structure, what does it mean? And secondly, for you Carlalberto, so to make things clear and here recorded, I understand that the message hasn't changed and that the funding requirements of Atlante are independent from the rest completely independent from the rest of the Group, right?

Let me take the 2 on the lighter structure, obviously, I confirm what Alessio said. What does it mean many things. So an OpEx structure, which is in the CapEx investment, which is in line with the current stage of the company and the current ability of the company to transform investments into revenues. And therefore, that's the overall concept behind the concept of discipline that I mentioned, okay? And so lighter OpEx, lighter CapEx in line with the potential of generating revenues. And therefore, we will have visibility as a management team, starting from the second quarter. And certainly, we will not overstructure our OpEx. And certainly, we will try to lean as much as we can our OpEx. And certainly, we will carefully dose the CapEx this year with a very disciplined approach. And on funding, yes, let's have this comment and my answer recorded on the funding requirements, NHOA Energy does not require any specific funding on top of working capital needs, obviously, like any company that has EUR300 million of backlog of orders. But certainly, it's not burning cash and will not burn cash. And in the Free2move, we are supporting at the Group level with intercompany loans. But given the current backlog of orders and the current expectations, as I mentioned, revenue recognition starting from second quarter and majority of the backlog of orders transformed into revenues and therefore margins, starting from majority booked in 2023, sorry. We do not expect any further financing need.

We also have questions coming from Mr. [indiscernible] by Bryan Garnier.

Three questions for me. The first regarding storage. You mentioned in the press lease that margins have been affected by unusual contribution of lower margin civil works and interconnection activities, not expected to recur in the future. And I just would like to understand why these activities are not expected to occur in the future from a technical aspect? My second question is that, I don't know if you can disclose it, but you mentioned you have EUR60 million purchase order of Free2move eSolutions. And would it be possible to know how much could be accounted as revenues in 2023? And my final question is on Atlante, how do you see competition evolving in Italy, France and Spain? And if you could give us some comments about your main competitors in those countries.