TREVI - Finanziaria Industriale S.p.A. (TV92.F) Earnings Call Transcript & Summary

Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the TREVI First Half 2025 Results Conference Call. [Operator Instructions] Today's conference is hosted by Mr. Giuseppe Caselli, CEO; and Mr. Vincenzo Auciello, CFO. At this time, I would like to turn the conference over to Mr. Caselli. Please go ahead, sir.

Good morning, ladies and gentlemen. I am here also with the 2 General Manager of the construction company, TREVI and Soilmec, [indiscernible]. Just a brief highlights, and then I will leave the floor to our CFO to illustrate our financial and economical results. Just in terms of economic performance, the first half closed at EUR 312 million with a 19% growth year-to-year, and this is mainly driven by the Italian activities as well as the Middle East activities. The group recurring EBITDA stands at EUR 44.3 million in the first semester that has a strong increase compared to the previous year that was at -- that is 64% -- 65% increase with a 14.2% margin, thanks to a more selective commercial bidding approach. It's important to remark and I keep on repeating myself, and I'm sorry for that, that our jobs, our projects are extremely on a fast track basis and they last between 3 to 6 to 9 months. Very rarely, we go beyond the year. So the comparison on the semester has to be taken into account the amounts of works that we perform in that specific period. In terms of order intake, the first semester, we were able to get EUR 350 million on the first semester with again an increase with the previous year. The backlog stands at [ EUR 652 million ] end of June 2025, that basically has to be explained compared to the previous backlog at end of December. This will be explained after during our presentation because this number, it seems in a slightly decrement to the previous year. However, we -- if you look at the constant perimeter, the backlog stands more or less at the same level. So it means that the acquisition of contracts is steady along the period year-to-year. In terms of the financial position, the CapEx is almost EUR 9 million. The net debt is down to EUR 190 million compared to December, minus EUR 8.5 million, and the significant deleveraging with the leverage ratio stand at 1.9x. In terms of outlook, that is, I believe, the most important part of the presentation. We believe with the information that we have as of today that the second half 2025 performance will result more or less in line with the business evolution that we presented at the end -- at the beginning of the year. The recurring EBITDA and as it will be explained even after if it will remain the guidance that we provided at the end -- at the beginning of the year between EUR 80 million and EUR 90 million. And the same as the PFN, we will maintain the guidance that we give to the beginning of the year. So in a nutshell, we had a very strong performance in the first half. And we are foreseeing unless the situation will dramatically change and if there will be no deterioration of the current situation that is known to all of us in terms of the valuation of the dollar in terms of crisis in different parts of the world, we believe that we will be able to maintain the guidance that we give at the beginning of the year. Go to number. In terms of revenue, we have EUR 280 million -- sorry, EUR 312 million, that is plus 19% compared to the previous year. In terms of recurring EBITDA, EUR 44.3 million, plus 65% almost compared to the previous year that was standing at EUR 27 million. In terms of total adjusted net profit, we are at EUR 11.3 million compared to the EUR 5.4 million of 2024. Free cash flow from operation plus EUR 32 million compared to the EUR 7.9 million of 2024. In terms of net debt, EUR 190 million compared to the EUR 207 million of the previous semester. Leverage ratio, 1.9x versus 3.0x. How this evolution happen? Basically, we have a number of projects that we are carrying out around the world. We have just -- we are completing the North-East Link Tunnels in Australia. We are proceeding with the works in Rogun Dam in Tajikistan. We are -- we started the activities in Spain. We are proceeding with the Metro Manila Subway. We have completed the last work order that we got in NEOM. And then we are proceeding on the activity in Malta. In the States, we just get awarded a new contract. At the same time, we are proceeding with the previous activity. In Dubai, in the Emirates, we have a number of projects going on at this particular point in time. The activities are quite booming in the Emirates. We got awarded a station in the Metro in Algeria. In Nigeria, we are proceeding with the construction of 2 berths. In Italy, that is one important part of our activities currently ongoing on the first semester, we are proceeding with the High-Speed Rail Link in Florence. We started the building activities in Rome. We are starting -- we started the activities on securing the Garisenda Tower and then Venezia and Metro C in Rome and then the railway doubling in Messina-Catania. As I was mentioning in the beginning, the order intake in the first semester stands at EUR 350 million. As you can see for those that are in webcast, basically, we are in the upper side of the order intake of the previous year. So it means that our company keeps on securing contracts, and we are securing contracts only if we consider that the contracts are profitable, are giving satisfaction to our results. So we are even more and more selective in what we choose and what we do. And the other element that has to be considered is that we have quite a vast geographical area where we operate this in order to minimize the risk of being concentrated in one area. And then if anything happen in that area to face a tremendous risk of not having activities. So we try to equalize our workforce and our activities around the globe. The backlog stands at EUR 652 million. What I would like to highlight is the backlog of Soilmec that has increased since 2023. If we consider this backlog has been affected by the cancellation of a project in the United States that for a total amount of around EUR 60 million. This contract has been canceled due to some requirement that were not cleared between the local government and the federal government. So being protracting the discussion between the 2 government parties, the federal government decided to withdraw the financing of the project. So the project has been canceled. We have been remunerated for the works that we have done on this project in the beginning and now the activities are completely not anymore in our backlog. So as you can see on the right part of the slide, you can see that there is a distribution on the backlog. This in line with our policy that is driven by the fact that we want to distribute our risk around the world and not concentrate just in one part of the world. This, of course, imply that we have to be an extremely fast approach to move around the world to be extremely flexible to the demand even because we are targeting projects that have an interest in terms of profitability. We don't shoot anything is passing, but we are extremely, and I underline extremely selective in what we try to do. And this is proven by the fact that our EBITDA in terms of group is one of the highest compared to our peers. We are not interested in maximizing revenue. We are interested in maximizing profit and cash generation. Now I will leave the floor to our CFO, Vincenzo Auciello, that will go in details to all our economical and financial results.

Okay. Thank you, [ Gigi ], and good morning to everyone. We will start from Slide #10 with a summary of financial results for the first half of 2025 compared to the same period in 2024. Group revenue increased by 19% year-on-year, and our recurring EBITDA increased by a notable 64.9% to EUR 44.3 million. This remarkable growth has been primarily driven by our TREVI Division. In the first half, we have also experienced a significant improvement in EBITDA margin compared to last year with an EBITDA margin reaching 14.2%. This higher margin reflects our disciplined approach, awarding and executing projects that deliver healthy marginality. And let me also point out that the reported and recurring EBITDA are almost aligned because our extraordinary cost amounts only to EUR 850,000. Moving further to the adjusted net result. So the adjusted net result was EUR 11.3 million compared to the EUR 5.4 million in the first half of 2024. And we refer to the adjusted net profit because both 2024 and 2025 net results were impacted by the reversal of nonmonetary financial costs resulting from our successful financial restructuring that was completed in 2023. And the impact on P&L figures is mainly related to the IFRS 9 on debt, which is [ reversing pro quota ] till the end of 2026. And the difference between the adjusted net profit result of EUR 5.2 million is exactly the portion of IFRS 9 absorbed in the first part of the year. Needless to say that the reported net result equal to EUR 6.1 million is robust and significantly higher than the first half of 2024. Free cash flow was positive for EUR 32 million, so 4x higher than first half of 2024. And this is a proof of the progress made in terms of cash flow conversion. We think we see it as a remarkable result that shows how we turn growth of margin into cash generation. Moving on to the Slide 11, we see our revenue footprint. There is a significant contribution from Middle East. However, a well-diversified geography mix of our revenues allow us to be well positioned in many markets and capture further potential commercial opportunity. Let's now go to the results of our 2 divisions, and let's start with TREVI. The division posted EUR 260.5 million revenue in the first half of this year, so up by 26.4% from last year, thanks to performance in Italy and the Middle East. And the recurring EBITDA was at EUR 42.9 million, up by 92.2% compared to 2024 with an EBITDA margin of 16.5%, increased by more than 560 basis points from the first half of last year. Certainly, the higher EBITDA is driven not only by higher revenue, but also by a more favorable geographical mix, thanks to the project progressing or under execution in Saudi Arabia, Emirates, Tajikistan and beyond. As you can imagine, this increasing metrics has driven the overall group result improvement in both in terms of economics and cash flow generation. For the second half of this year, we expect the division to have slightly lower revenues and EBITDA versus the first half due to project schedule across the Middle East, Europe and North America. However, what we expect is anyway a significant and robust result. Moving on to Soilmec Division on Slide 13, you can see that revenues were down by 6.4% year-on-year with a lower recurring EBITDA, both in absolute terms and in percentage of revenues. The reduction was mainly due to lower contribution from business activities in North America and U.K. And with regards to North America, the uncertainty surrounding the implementation of tariffs by the U.S. government had a significant impact on the sales expected to be finalized on the U.S. market. However, to better understand the economic trend of Soilmec division, we should also take into account something that was mentioned by Gigi in one of the previous slides. So about the backlog of Soilmec at the end of June 2025, higher of EUR 10 million compared to the same period of last year. And this suggests that revenues and margin in the second half should help recover the first semester gap and bring the performance in line with the year 2024. Let's now have a look at the overall P&L on Slide 14. We have already extensively commented on revenue and EBITDA. So I would like to point out some items below the EBITDA. Depreciation stood at EUR 14.7 million decreased versus the same period of last year, driven by lower depreciation on leasing contracts as per IFRS 16. Financial expenses went up from EUR 13.3 million to EUR 14 million, mainly due to higher nonmonetary financial charges related to IFRS 9, which accounted for EUR 5.2 million in the first half of 2025, slightly higher than EUR 4.8 million in the first half of 2024. For the full year 2025, we have budgeted a level of financial expenses in the range of EUR 27 million, EUR 28 million. As such, approx EUR 13 million, EUR 14 million are expected for the second half of 2025. Income tax amounted to EUR 8.5 million as per taxable income accounted in some geographies where we have no tax losses carryforward to offset the tax burden. And finally, the net profit is equal to EUR 6.1 million. And the portion associated with minorities is practically relevant because it is about EUR 400,000 only. So the profit recorded belongs almost exclusively to the group. Let's now -- let's move now on to the slide that talks about the generation of cash. And let me say that the company remained very focused on generating cash flow with the goal of reducing our debt. As shown on Slide 15, at the end of June 2025, we had a positive outcome in terms of operating cash flow that stood at almost EUR 41.2 million with an EBITDA cash conversion of 93%. And we had a free cash flow amounting to EUR 31.1 million (sic) [ EUR 32.1 million ]. And here, when we talk about free cash flow, we are talking about free cash flow to farm, so before payment of interest on that. This remarkable result was driven by strong operational results, coupled with a positive working capital dynamic and it enabled us to free up cash to fund nearly EUR 9.1 million of CapEx and as we will see in the next slide, to met our debt obligations. For the second half of this year, we expect a positive cash flow generation, but lower than the first half -- the first part of this year, and this is mainly due to the expected reversal of positive working capital dynamic seen in H1. Moving on to Slide 16, you see the evolution of our net debt structure. The cash flow we generate in the first half of this year improved our net financial position by [ EUR 14 million ] on a pre-IFRS 9 basis. So this from a net debt of EUR 221 million to EUR 207 million and improved by EUR 8.5 million on a post-IFRS 9 basis. So we moved from a net debt post IFRS 9 of EUR 199 million to a net debt of EUR 190 million. And we achieved these results by generating the EUR 32.1 million in free cash flow and such generation of cash enabled us to cover the debt interest payment and the dividends to minority for a total amount of EUR 9.3 million despite a negative ForEx impact of about EUR 9 million, reflecting the depreciation of dollar against the euro starting in March this year. Let's now have a look at the liquidity and debt structure at the end of June 2025. We are on Page 17 of the presentation. And as you can see, we keep a comfortable level of liquidity on our balance sheet, which was EUR 97.4 million at the end of June, so pretty much in line with the December 2024. Additionally, we have other current assets for EUR 12.8 million, of which EUR 10 million will be converted into cash in the second half of 2025. Our gross debt stood at EUR 300.7 million, reflecting an improvement of around EUR 11 million versus December 2024. Let me also stress the concept that lowering the gross debt remain a key priority for TREVI as we continue derisking the company. And a more detailed overview of the gross debt -- of how the gross debt moved is provided on the right-hand side of the slide. The increase of gross debt determined by the IFRS 9, so nonmonetary effect for EUR 5.2 million plus the interest peak. So all in all, for EUR 7.6 million was more than offset by the debt repaid during the first half of the year for EUR 18.8 million. And the EUR 18.8 million we repaid in the first half has 2 components. One is related to the amortized plan of our long-term debt as provided by the financial restructuring agreement. The other component refers to the repayment secured in the first half of 2025 of short-term facility. Coming back on analyzing the net debt. So if we deduct the cash and liquidity and other current financial assets from the gross debt, the final net debt in June 2025 stood at EUR 190.4 million. Our leverage ratio calculated as a net debt on recurring EBITDA landed at 1.88x, showing our ongoing efforts to deleverage the balance sheet. And just for the info of the audience, the covenant threshold set by the financial restructuring agreement with the banks at June 2025 was 3x (sic) [ 3.00x ]. Being our ratio of 1.88x, this means that we are comfortably well below that limit. Let me now hand back to Gigi for our closing remarks.

Thank you very much, Vincenzo. Thank you very much for the clear and detailed explanation for our economical and financial results. Well, we start with revenue that is an important element, but it's not the most important element of the company. We believe that we can reach within a range of EUR 630 million, EUR 650 million year-end. And this is, of course, has to be read in conjunction with a couple of elements that has driven this result. One is the cancellation of the projects in the U.S. that we supposed to have done certain activities, a number of activities on this project. So we have to find out suitable replacement and try to cover with some additional activities around the world. Second element that need to be considered that is the valuation of the dollar compared to the euro. Everybody knows that more or less, we are above 10% in terms of the valuation of the dollar compared to the euro since the year -- beginning of the year almost. The second and in my opinion, one of the most important, the most important element is the recurring EBITDA. We will maintain what we have foreseen at the beginning of the year. So we will be able to overcome by different measure and with, again, an extremely flexible approach of our activities, the guidance that we gave at the beginning of the year that will be in the range of between EUR 80 million and EUR 90 million. The net debt, we foresee a range between EUR 182 million and EUR 194 million. And in terms of leverage ratio, it will be between 2x and 2.4x. So we are just proud, very proud to say that in the last number of years that we are trying to bring back this company in the position that it should as a leading company in what we are doing. We have always so far maintained what we have been predicting despite all the issues that happen around the world that are obviously out with our control. What we can say, we can say that the first half results are positive. And I keep on repeating that the element of comparing half year with half year, trimester with trimester in company like us, ours, where the activities last basically the lapse of 1 night since they are between 3, 6, maximum 9 months is, of course, an indicator how the company is doing, but it's not the only indicator, has to be always considered the company in what we believe is its outlook at the year-end. And as I mentioned before, our outlook for the year-end maintain what we foreseeing at the beginning of the year. How we are confident that we will be reaching such kind of level, we are more confident than before because we have a positive 6-year result -- 6-month results on the first part of the year. Of course, this means that we are going to deleveraging continuously the company as we are doing in the last years since we started the restructuring projects. We must continue to provide and to generate free cash flow. And last but not least, I don't want to annoy everybody, we are going to confirm what we are foreseeing at the beginning of the year in terms of EBITDA and net debt. While thanking for having put attention to what we just mentioned, we are ready to receive any type of questions that you may have. Thank you very much.

[Operator Instructions] The first question is from Emanuele Gallazzi of Equita.

I have 3 questions. If it is okay for you, I can go one by one, maybe it's a little bit easier. So, okay.

Yes. Please go ahead. Thank you.

Yes. Okay. The first question is on the Messina Bridge, which is a potentially relevant opportunity. You clearly have the expertise, the know-how. I know that it might be premature, but I would like to hear from you your, say, early comments on this opportunity on this project.

Okay. Regarding the Messina Bridge, definitely is a wonderful project for what we -- for our concern. It's extremely -- it will be extremely -- it will be a target for us to participate. Of course, as you know, the activities hopefully will start within this year. We have been arranging a strategy to participate to the activities. We hope to start to receive documents for bidding by year-end next year. This is what I can say. The amount of work is massive. I believe -- I strongly believe cannot be otherwise that the consortium that has been entrusted for the construction of the bridge is going to divide the scope of work amongst different contractors. We will be ready to participate and we will evaluate the opportunities as we are evaluating all opportunity around the world.

Very clear. The second one is on Saudi Arabia. Can you just update us on the NEOM and the Line project as the press is reporting that the client is rethinking about the project. And let's say, on a more general picture, looking at the Middle East, which was, give or take, 50% of TREVI revenues, how do you see the region evolving?

Well, we start with Saudi Arabia, the Line. Just recently, on the web has been reaffirmed, reconfirmed once more that the line will be formed by the construction of the 3 models, 45, 46 and 47. Currently, we have been working on the 46. At this point in time, as I was mentioning in the beginning of the presentation, we have completed the last work order that we got awarded sometimes ago. We have performed not just economically, but in terms of technical, operational, we performed extremely well. In fact, we have been awarded the prize for the best contractor, piling contractor on the Line. Currently, the client, as far as we understand, are reevaluating certain part of the engineering in order to cope with additional technical requirements. We hope that the new bidding rounds will be by end of the year for the activities relevant to module 46 and 47. If you consider that so far, mainly we've just been working on module 46, in case we will be successful on the award of the new contract in the 2 additional models, this will give us a positive horizon in terms of activities for next year and even half of the year after. So far, having completed the last work order, our backlog has 0 in terms of potential revenue. So our backlog is just covering all activities, except NEOM. In terms of Middle East, keeping aside Saudi Arabia, I believe it's quite known that we read all the press, the information, the news, sometimes they are accurate, sometimes they are less accurate, where at this point in time, due to the incredible amount of things that have done recently, there is a moment of -- I don't want to say pause, but the pace of the investment are slightly slowing down. In terms of other countries in the Middle East, we are seeing that in the Emirates activities are booming. In fact, all our work fleet on the Middle East that was located in the UAE are working at 100% pace. We are mobilizing additional equipment in the Emirates since there are continuous activities that keep on coming to the horizon in -- on our pipeline. We have seen that in Oman, some activities are going and they are quite steady as a country. You don't expect spark as well. You don't expect most often. So business as usual, I can say. And recently, we are picking up in terms of activities in Kuwait. So this gives you an idea of the countries in the Middle East where we are working.

Clear. The last one is on Soilmec, a very quick one. If you can just remind us your exposure to the U.S. market for Soilmec, and what strategy are you thinking to implement to offset the tariff impact?

Yes. Okay. As is easy to realize the revenues of Soilmec that in the first semester was not at the level that was expected compared to the previous year is due to the fact of the American market. With the tariff, with the uncertainty of the tariff, the market basically was almost frozen. There are -- there was some activities and we hope now with the current tariff that has been fixed at 15%, the market will react positively and certain opportunities will be credible. Definitely, we do expect in the U.S. market an impact in Soilmec because what you have not fulfilled in the first half is impossible to recover in the second half. We are hoping that from now on, the dealers and the companies will proceed in investing and buying our equipment. We see that something is already moving after the announce of the 15% tariff. We hope that this movement will drive the relevant purchase order, the Level 1 contract. What we are planning to do in case we don't this -- the level of tariff will hinder our market share in the U.S. Well, we brought back that was on a shelf, a project that we had in the past to manufacture a couple of type of equipment, not to equipment, but the type of equipment, the one that has the most appeal on the market and to use a certain type of machine, base machine from the States and the relevant part, the precious part to bring in and assemble in the States. We are currently analyzing because you cannot just because for a period -- relatively short period of time, think to invest a substantial amount of energies, efforts and money to create a new -- to form a new production line in the State. But in terms of engineering, in terms of strategy, in terms of realization, we will go to a level where we just need to push the button and to do what we have started in the past. Time to market in case we will be able to -- in case we will decide to move also in this direction to recover the part of the market that will be hindered by the tariff, we consider that we will need around 6 months. So we want to be ready like a Formula 1 starting grid. And as soon as we decide that the traffic light will be green in 6 months, we will be ready to produce in the States. But currently, we are doing all the preparatory work, and we are utilizing what we have done in the past. We spent a substantial amount of effort, engineering man-hours, money and people in order to study and to adapt this type of solution. And thanks to that effort that was spent in the past, in a short while, we will be ready to be on the starting line. Then we will see to give the go ahead or not. It will be decided based upon what is going to happen in the next month, the next few months.

The next question is from Gian Marco Gadini of Kepler Cheuvreux.

I have 3 questions as well. I will go one by one. The first one is on -- again, on the opportunities. Great to see that the backlog is rebalancing geographical wise. I was wondering whether you have in your pipeline, a similar distribution of projects and if you can tell us the size of this potential pipeline in the following -- for the following semesters? And in particular, if you see any opportunities in Germany with the infrastructure plans that are being approved and funded at the national level? And if there are any projects -- any other projects that are at risk of cancellation within your backlog?

Well, I'll start with the last one. At this point in time, we don't see any cancellation project. The cancellation of one project, this is, I believe, the first one in 6 years that -- more than 6 years that I'm sitting on this chair is an extraordinary situation. It happen. Again, what I would like to underline is our capability to be able to resist to this type of situation and to even bring the result that we just have seen. And this, again, is a proven proof that our strategy in terms of bidding, in terms of scrutinizing the market, in terms of trying to have an intelligence on the market is one of our key element of our success. Then talking about the pipeline, the backlog evolution. Again, we are strongly convinced, at least I am extremely strongly convinced that we had to be extremely, extremely, extremely flexible to demand. We don't invent market. We don't create market. What we have to do, we have to be extremely clever, capable and wise to understand the market trends and to slide in first, this is exactly what happened in NEOM. In NEOM, nobody was talking about NEOM. We heard and we have contacts in Saudi, and we mobilized in NEOM even before we have the remote possibility to see a contractual document just on an idea. And this is what we are doing. Because, again, as of today, if I tell you what is going to happen in the next -- in 2 years' time in a country or try to establish a country because we think that in 2 years will be projects, in my opinion, is a wastage of money. You have to be extremely fast, extremely flexible. And as you can see, for instance, in Nigeria, we got a contract and we are mobilizing the equipment, but we are not leaving there, the equipment lifetime or create an establishment that costs money forever. We see what is going to happen with the short runway. We move fast. At the same time, we go back fast where the equipment are needed. In terms of projects, well, there are a number of projects that range from New Zealand to South America and Central America. What I can tell you that we are working in -- extremely hard in terms of business intelligence around the world in order, as I was trying to explain before, to be the first one to hear and the first one to move and to take certain risk to move there even before we receive the bid to quote. We have seen that this approach has been extremely successful so far. We don't try to rely on what I call it the market that provide very low profit level. We are not interested to make revenues. We are interested to go and do projects that has a certain complexity, high complexity because this is where we can exploit our expertise at best. And we can develop equipment with Soilmec that can do such kind of activities. And we are trying to do what is really complicated, because in a normal day-to-day business, the level of profitability is very, very, very low compared to the risk that you have to absorb and the delay in terms of payment that you get.

Clear.

I don't know if I answered all your question. But if I didn't, please kindly repeat. On Germany, Germany, Germany, Germany.

No, yes, yes, exactly, about Germany.

Okay. Germany is a very peculiar country. There is one important element that maybe the majority that do not have an in-depth knowledge of the German market doesn't know that is a barrier to anybody that want to enter the German market. In Germany, the majority of the contract foresee the submission of bond that basically is perpetual. And this barrier is done in order to prevent other contractor to enter in Germany. In fact, if you see who is working in Germany, do you see any international contractor that is not German? Very difficult, especially in our business. And as you know, when you go to a bank and you ask for a bond with an open-ended bond, so it's basically perpetual, you are not able to provide such facilities. So basically, it's an intimate barrier to the market. There are -- we have been working in Germany, but on a private basis where the investor is a private entity that is willing to accept what is considered the normal way of providing bonds. So it means a certain number of years, not for instance, an exceeded number of years. And this is the other element. So we are attentive to the market. We know about this barrier that has been put in place in Germany to favor German contractor and to prevent additional contractor to enter the market, but really on a case-to-case basis.

All right. Pretty clear. The second question is on the positive outcome of the litigation you mentioned on the press release regarding the disposal of the Oil & Gas division. So we understand there are around EUR 10 million to EUR 11 million that will be cashed in, in the second half. Do you expect to employ that to further accelerate your deleveraging plan? Or do you see other useful employment of this cash?

Thanks, Gian Marco. This is Vincenzo. Yes, as you recall, so what we have classified in our structure of debt, so the other financial current assets equal to EUR 12.3 million, it embed EUR 10 million that is about the litigation that you just mentioned. So we are foreseeing a conversion in cash in the second part of the year for EUR 10 million. I would say that in terms of net financial position, it doesn't change because it's already embedded in the net financial position. So basically, there will be a swap from other current assets, other financial current assets to liquidity. I would say also that in this moment, we consider this liquidity, additional liquidity ready for our operation or for our further reduction, not of the long-term debt because that one as a plan, as an amortized plan established by the structuring agreement, but it may be used for the -- to reduce further the short-term facility. So operational or financial part also of the conversion of that financial current assets in liquidity. So it may help also the reduction of debt, but it's not written on the same right now.

And the very last one regarding the recurring level of CapEx, we have seen that in H1 was significantly down compared with last year, but last year, you were upgrading your fleet. So can this level be assumed as a recurring -- an ordinary and recurring level of CapEx also in terms of revenue? So this around 3% we see in H1? Or do you expect any significant additions in the near future?

So let's say, in the past years, we had a level of CapEx of around EUR 30 million per year. And the level of CapEx was a very high peak. And that level of CapEx also allowed to rejuvenate the fleet of assets. So that's why therefore in the first half of this year, we have a CapEx equal around EUR 9 million in terms of cash flow and we expect the same amount on the second part of the year. So all in all, there will be -- we see a reduction of CapEx in the year 2025 compared to the past. We see a range in the year of around EUR 20 million, EUR 22 million. This is because in the past, we have already pushed -- in the past years, we have already pushed on our CapEx, capital expenditure, rejuvenated the fleet. And what is also important is, let me say that our assets are also movable. So we can move our assets from one country to another, so to satisfy the different schedule of projects. So this helps also to have the CapEx expenditure under control. What we have spent more in the past years, we will benefit this year and we see a lower level of CapEx compared to the past years.

Of course, just I want to add some basic elements. This is in normal condition. Since we are trying to improve in terms of level of revenues for the future, the CapEx may change if we get awarded some key projects where we need additional equipment. So if the situation remain as it is, what Vincenzo say -- said just now is what is going to happen. In case we will be successful in a couple of acquisition in terms of projects that we are targeting, then the amount of assets that we will need to buy will definitely increase.

All right. But I think this will come also with additional down payments to cover the financial employment, I think.

Absolutely. Absolutely, yes. Absolutely, yes. It depends -- again, it depends. It will depend. For instance, as you know, in the States, there is no down payment is -- do not exist the down payment process that features that you have in other parts of the world. It is other part of the world, you will have a down payment. It will depend upon the type of project, the profitability expected by this project, the complexity of this project. And in case all the elements are satisfied, it means very visible project with high profitability, cash flow positive during the execution of the project. But you need to invest. We will evaluate and we will invest.

Clear.

We have to be extremely flexible. We cannot be -- in this business, if you are rigid on your assumption and you don't want to change your assumption is the starting of the end. We are a company that what we decide this evening, maybe tomorrow has to be changed because you change the condition that we don't control if we want to keep on going in this process of improving, continuous improvement of the company in terms of capability and results.

The next question is from Luca Arena of Alantra.

Well, most of my questions have already been answered. Also, thanks to the very detailed slide presentation. However, regarding the project in the U.S. that has been canceled, when we realized that it should have accounted for some EUR 60 million in terms of backlog, what should have been its impact in terms of revenues in 2025?

Luca, this is Vincenzo. So very straight question, which have very straight answer. So we counted in the budget. So when we prepared the budget the beginning of the year, we counted roughly EUR 20 million of revenue, EUR 20 million -- in the range of EUR 20 million, EUR 25 million revenues about the projects canceled. So of course, now in the new estimation of revenue provided, we have 0 [ debt ] revenue. So there is the deviation of EUR 20 million, EUR 25 million compared to what we have presented that budget at the beginning of the year and what we have disclosed with you yesterday and today.

Okay. Then looking at the TREVI Division, recurring EBITDA jumped to 16.5%. How much of this improvement is structural or temporary due to a favorable, let's say, country mix?

Okay. Let me say that this is part of what is also our commercial strategy, also the selective bidding approach. 16.5%, of course, is a very high result. It's not, I would say, I won't let this result as what will be -- what is our average. However, as we have seen in the last 3, 4 years, we have been always double digit, almost in the minimum double digit, around 15% -- 14%, 15%. So the 16.5% is a function of very selective approach and the geographical mix. However, a few basis points lower, but we are always in a good robust range of 14.5%, 15%. So let's say, between 14.5% and 15.5%. So robust, significant and also as earlier was mentioned by our CEO, one of the best -- one of the highest marginality if we consider our industry and our peers.

Well, I just would like to add a few elements. As I just said before, we don't create the market. We have to just anticipate and try to see what is available in the market and decide where you -- which project you target, you want to target which type of activities you want to do. The high level that has been seen in the first semester is also due to the fact a combination of project, very complicated, very risky. But when I say risky, not to be seen in the negative aspect, has to be seen in a positive aspect. Why we are capable to take such a kind of risk activities, because our level of know-how, level of expertise, level of capability, the level of our people is such that we can mitigate those risks that other companies cannot take it. So this year, this semester for a number of situation, it happened that we consolidated this number of projects so complicated. Of course, we would like to have only complicated projects in our backlog, but unfortunately, it's not the case. And we have to live on what is available to bid, of course, trying to select what is not absolutely a level of profitability that it will not withstand our minimum demands. The EBITDA that has been presented is definitely on the very, very, very high end as it is not normal that it stands at this level. We wish. Of course, if we are successful in a couple of projects that we are bidding that I repeat are extremely difficult in a very difficult area, difficult condition, difficult environment, most probably we will be able to maintain such a kind of level in the future, but it's not something that you can count as a routinary EBITDA.

Okay. The last one, on the back of the strong number reported in first half, well, your guidance seems quite easy to reach. You are over conservative, realistic or you are seeing, let's say, tangible risks in the second half of the year?

Well, everybody, I believe that it's 6 years that [ I have ] people, I have quite a continuous contact with the financial community. I'm not -- my principle is not to be either conservative or optimistic. We have to be realistic. So what we give is what we expect to be achieved. This is the driver that drives all our decision, my decision first and the decision of my colleague. We don't like to give a conservative number. And then at the end of the year, provide an improvement -- a dramatic improvement because if you provide 1 year a dramatic improvement, the next year, you can provide a dramatic loss. So for me, what is important is the stability. Whatever we say at the beginning of the year, we have to maintain. And this is what we have done in all this year. You can control and verify all our guidance that we've been giving since year, and we maintain it exactly what we give. We want to be a reliable company that maintain what it says.

Yes. Congratulations to the team.

Thank you very much indeed. Appreciate it.

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

Thanks a lot.

Thank you very much. Thanks, everybody.

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