Earnings call transcript: De Nora’s Q2 2025 revenue grows, stock dips

Industrie De Nora SpA reported a 4% increase in revenue for the first half of 2025, reaching €416 million, with an 8% year-on-year rise in adjusted EBITDA. Despite these gains, the company’s stock fell 4.49% during the open market session, closing at €6.91. According to InvestingPro analysis, De Nora currently trades below its Fair Value, with a "GOOD" overall financial health score. The earnings call highlighted De Nora’s strategic advancements in green hydrogen and water treatment technologies, yet investor sentiment appeared cautious.

Key Takeaways

• Revenue grew by 4% to €416 million in H1 2025.
• Adjusted EBITDA increased by 8%, with a raised full-year EBITDA margin guidance to 17-18%.
• Stock price dropped 4.49% on the day of the earnings call.
• De Nora entered the PFAS treatment market with two projects in the US.
• The company confirmed its 2026 guidance amidst strategic expansions.

Company Performance

De Nora demonstrated solid growth in H1 2025, with revenue increasing by 4% and adjusted EBITDA rising by 8% compared to the previous year. InvestingPro data reveals strong fundamentals, with the company maintaining more cash than debt on its balance sheet and a healthy current ratio of 2.74x. The company is capitalizing on its leadership in green hydrogen technologies and expanding into emerging markets like PFAS treatment and lithium refining. This diversification aligns with broader industry trends, such as the expected 15% annual growth in the lithium market.

Financial Highlights

• Revenue: €416 million, up 4% year-on-year.
• Adjusted EBITDA: Increased by 8%, now 19.6% of revenues.
• EBITDA margin guidance: Raised to 17-18% for the full year.

Outlook & Guidance

De Nora maintained its low single-digit revenue growth guidance for 2025 and confirmed its 2026 projections. Analyst consensus from InvestingPro suggests strong upside potential, with target prices ranging from €7.09 to €17.27. The company expects its Energy Transition segment to achieve a mid-single-digit EBITDA margin in 2025. Strategic initiatives include pursuing mergers and acquisitions in water technologies and enhancing customer integration. For deeper insights into De Nora’s growth potential and comprehensive financial analysis, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.

Executive Commentary

CEO Paolo de la Cain emphasized De Nora’s resilience, stating, "DeNora once again demonstrates remarkable resilience even in a complex scenario." He also highlighted the company’s focus on strategic partnerships: "We are actively developing strategic partnerships with key international technology solution providers." De la Cain underscored the environmental benefits of their technologies, noting, "Electrochemistry offers a cleaner, more efficient alternative to traditional chemical refining."

Risks and Challenges

• Market Volatility: The stock’s recent decline may reflect broader market uncertainties.
• Supply Chain Disruptions: Potential impacts on project timelines and costs.
• Regulatory Changes: Could affect operations in new markets like PFAS treatment.
• Competitive Pressure: Increasing competition in the green hydrogen sector.
• Economic Conditions: Macroeconomic factors could influence investment and expansion plans.

Q&A

During the earnings call, analysts inquired about the potential normalization of water technologies margins and cash flow dynamics. Discussions also covered potential backlog opportunities in the Energy Transition segment and variations in tax rates. These topics reflect ongoing interest in De Nora’s financial health and strategic direction.

Full transcript - Industrie De Nora SpA (DNR) Q2 2025:

Conference Operator, Chorus Call: Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Industriadenora First Half twenty twenty five Results Presentation. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions.

At this time, I would like to turn the conference over to Ms. Chiara Locati, Head of Investor Relations and ESG. Please go ahead, madam.

Chiara Locati, Head of Investor Relations and ESG Director, De Nora: Thank you. Good afternoon, and welcome to our first half twenty twenty five financial results presentation, and thank you for joining us. We appreciate your interest in DeNora. I’m Ciara Loccati, Head of Investor Relations and ESG Director at DeNora. With me on the call today are Paolo de la Cain, CEO of the Group and Luca Al Oglaloro, our CFO.

They will guide you through the financial and business performance for the first six months of the year. After the presentation, we will open up a Q and A session. Finally, the slides of this presentation are available in the Investor Relations section of our website. With that, I would like to hand it over to Paolo. Paolo, the floor is yours.

Paolo de la Cain, CEO, De Nora: Thank you, Chiara. Good afternoon, ladies and gentlemen, and a warm welcome from my side as well. It’s a pleasure to share with you the latest updates on our company journey and walk you through the key highlights of the 2025, which was marked by revenue growth and improved profitability. Over the past six months, DeNora has made solid progress in executing projects across all the business lines, delivering strong results in both revenues and EBITDA, as highlighted in the first bullet point of this slide. The group’s operating margin remained robust in the second quarter, primarily driven by the performance of our core businesses, retro technologies and in particular water technologies, with a modest positive contribution from the Energy Transition segment.

The Electros business grew supported by healthy margins and the stability of its product lines from chlor alkali to electronics, the latter showing continued signs of recovery. Order intake in this segment grew by approximately 6% year over year. Momentum remains particularly strong in the Water business. In addition to the old on plan execution of water treatment systems projects, are seeing continued double digit growth in the pools line. This strong performance in pools exceeds our expectation and is based on healthy market fundamentals.

Total new orders in the Water business grew by 15% year over year, while the backlog increased of 22% compared to the 2024. Project execution within the energy transition portfolio is progressing in line with customer agreed timelines, and we anticipate revenue acceleration in the second half of the year. Based on positive economic results, our financial structure remains solid, placing us in a strong position to evaluate inorganic growth opportunities, which we are assessing mainly in the water space. We keep developing new market segments, PFAS treatment within the water business unit and lithium refining within the energy transition business unit. Both initiatives leverage existing technologies in our portfolio, applied to industrial processes where DeNora holds an unparalleled global track record and expertise.

This expansion into adjacent and new markets demonstrates our technological versatility, adaptability and innovative agility, all hallmarks of our group. Overall, we view our first half financial results very positively as they demonstrate Denora resilience, particularly considering the ongoing macroeconomic and geopolitical environment, which remains volatile, complex and uncertain. Based on the performance of the first two quarters and the expected business and market dynamics in the second half, we are, therefore, updating our full year guidance for the adjusted EBITDA margin to a range of 17% to 18%, assuming revenue expectation remain unchanged. Finally, our sustainability journey continues to progress, becoming increasingly integrated into the group business model. This not only enhances the competitiveness of our sustainable technologies, but also strengthens our overall risk management.

This slide shows some key KPIs from our H1 twenty twenty five financial performance, which Luca will discuss in more detail later on. Reviewing the performance of our global of our business units, let’s begin with Electro Technologies business, which delivered a solid revenue growth in the first half of the year. This segment continues to demonstrate resilience and clear differentiation across both markets and geographies. In the first half, the order intake reached approximately €190,000,000 reflecting a 6% year over year increase. Growth was primarily driven by the chlor alkali line.

From a geographical perspective, Asia and EMEA delivered the highest growth rates during the period. Let me remind you, as previously mentioned in our calls, that in this business unit, the backlog level is not a reliable indicator of future revenue growth due to the fast in and out nature of project cycles. In chlor alkali, we are seeing opportunities for large scale new projects in The Middle East and China. Meanwhile, technological upgrades and aftermarket services continue to be key drivers of our growth. Lastly, we expect a gradual growth in the Electronics segment, supported by momentum in artificial intelligence and the automotive industry.

We are now on Slide number seven. The first half of the year confirmed it. The market momentum of our Water segment is not just positive, it’s powerful. We saw double digit growth in both the backlog and new orders. The total backlog hit approximately €180,000,000 up 22% from 2024, our highest level in the last two years.

New orders rose by 15%, with strong traction in our core markets, The United States, Middle East, China and Europe, and promising developments in South America, particularly in Brazil, where we secured new contracts for both industrial and municipal water treatment. South America also shows significant potential for further growth in both systems and pool lines. Focusing on the pull line, order grew by 24% year over year, outperforming expectations. Growth just driven primarily by The United States, which accounted for approximately 80% of total intake followed by Europe. We expect this trend to continue, supported by two key drivers: the ongoing shift from chemical to electrochemical disinfection technologies and the expansion of aftermarket services, which leverages our large installed base.

The outlook for Water Technology Systems line is equally strong. Orders grew by 10%, evenly split between industrial and municipal sectors. Even more encouraging after market orders surged by 32% year on year, accounting for 44% of the total systems orders. Notably, these are expected to contribute positively to the future group margins as they are more profitable than new equipment. Water is not just a business segment.

It’s a strategic growth pillar for the group. Regulatory evolution, industrial expansion, water scarcity and rising environmental awareness are all converging to drive long term demand. That’s why we are focused on strengthening our technological edge and competitive positioning. We are actively exploring inorganic growth opportunities to enhance our vertical and move closer to end customers providing integrated solutions. These opportunities also include expanding the Nora footprint into new industrial and geographic markets.

On Slide number eight, you can appreciate some of the key projects awarded during the second quarter across diverse geographies, both in industrial and municipal sectors. The flagship project, SEC Shoaiba Phase one, originally launched in Saudi in 1998, is an upgrade installation project for a desalination initiative integrating our advanced Clor electro chlorination system. By combining C Clor with heat recovery steam generators, the project has improved the purification efficiency, reduced environmental impact and met growing water demand. This transformative initiative represents a perfect balance between technology and environmental stewardship. Producing up to 50,000,000 cubic meters of water annually, Shuaiba sets a benchmark in sustainable water management.

At the bottom of the slide, there are the other three key projects. The first two are municipal filtration initiatives using our DENORA TETRA filtration technologies, implemented into two cities on opposite sides of the globe: Yanzhou, China and Sao Paulo, Brazil. The project in Sao Paulo marks one of the Brazil’s most critical water infrastructure upgrades, helping delivering 25,200 cubic meters an hour of clean water to 4,500,000 people, equivalent to 25 of the city population of Sao Paulo Do Brasil. The project reflects the De Nora commitment to global water resilience, supports urban communities facing climate driven drought risks and reinforces our long term growth strategy based on innovation and trust. The last project presented takes place in The United States, where the NORA Sallielect electrocoordination technology is enhancing operational efficiency at S Corporation’s offshore platform.

This retrofit ensures reliable disinfection for industrial applications such as cooling towers, wash downs using seawater desalination with safe disposal. As you can imagine, we are very pleased with evolution of our water technology systems line. The orders acquired reflect the strength of our business model, which is built on a strategic presence in key geographies critical to water treatment. Before moving to the energy transition, let me highlight our entry moves into the PFAS segment in 2025. As you know, since the second half of last year, DeNora has begun taking steps to enter the PFAS removal segment.

Certain categories of PFAS pose a serious risk to human health, and international regulations are starting to emerge to limit their presence, especially in drinking water. In April 2024, the U. S. Environmental Protection Agency, EPA, set a final rule capping PFOA and PFOS molecules in drinking water at a maximum contaminant level of four parts per trillion. Public water systems have five years to comply, although the current U.

S. Administration has extended the deadline to 02/1931. However, regulatory momentum is not limited to The United States. Awareness and concern about these so called forever chemicals are also growing in Europe and in The Middle East. DeNora has a strong track record in treating contaminants.

Our DeNoraSorb solution has demonstrated over twenty five years of proven effectiveness in addressing complex organic and inorganic contaminants, a solid reference for PFAS treatment as well. In addition, our piloting capabilities offer customers the confidence to select the most suitable solution, representing a key strength in this early phase of market development. In 2025, we have been awarded the first two full scale projects in The United States aimed at removing PFAS in drinking water. One project is being in Pennsylvania, and we previously described it during May conference. The other was awarded in recent weeks in Massachusetts.

We are particularly proud of these two achievements, which mark a significant milestone in our market development, positioning us among the key players in this field. In the meantime, we are continuing to expand our piloting activities with 11 initiatives underway across United States, Italy and Saudi Arabia. Additionally, Denora is participating in two EU funded projects aimed at advancing EPFAS treatment technologies. Looking ahead, we expect steady market growth, recognizing it driven by regulatory developments, funding opportunities such as government support and advances in contaminant removal technologies. Let’s now turn to Energy Transition segment.

Tenora continues to make solid progress in executing its substantial backlog. In the second quarter, we delivered 300 megawatts of green hydrogen generation technologies, bringing total semester production to approximately 100 megawatt half a gigawatt. Our factories continue to demonstrate excellent execution capabilities, enabling us to serve clients efficiently while maintaining strong operating margins. As a result, the Energy Transition segment recorded a positive EBITDA in the first half of the year, even as we continue to invest in research and development. Assessing the progress of the two main contracts in our portfolio, the Neon project, which is the world’s largest green hydrogen plant currently under construction, is progressing well, with overall construction at 18% complete across all sites.

As for the NoraScope, we expect to complete all deliveries to our partners by the August this year. In total, we will have supplied approximately 33,000 electrochemical cells for hydrogen production, representing over two gigawatt equivalent of installed capacity. Turning to Stegra in Sweden. We have currently delivered about 25% of the total 11,000 cells required. As shown on the right side of the slide, the plant’s total capacity will exceed 700 megawatts.

We’ll anticipate completing our deliveries by the end of this year. Let’s now shift from project execution, the outlook for the remaining backlog and pipeline. As of 06/30/2025, we had approximately six fifty megawatts in backlog, primarily related to the Steger project and the final deliveries for Neom. This corresponds to a total value of around €74,000,000 including approximately €10,000,000 in lithium related contracts. The total backlog for the segment amounts to €84,000,000 By the 2025, we expect to have delivered a total of 3.6 gigawatts of electrolysis technology for green hydrogen production.

This achievement positions De Nora among the global leaders in the green hydrogen sector. We are actively pursuing projects across multiple geographies, particularly Europe, where several initiatives are advancing in regions of Northern And Central Europe benefiting from Hydrogen Bank support. The Middle East offer real opportunities, supported by the potential for competitively priced renewable energy, a key growth driver for this business. We also see promising prospects in both Asia and United States. The green hydrogen sector is currently navigating short term challenges with fewer announced projects reaching final investment decisions due to regulatory uncertainty and ongoing macroeconomic and geopolitical pressures.

These factors are delaying end user investment in clean technology, but the medium turnout remains very positive. I want to take a closer look to some recent policy developments. The global green hydrogen market is entering a new phase focusing less on rapid expansion and more on strategic consolidation and maturity. In H1 twenty twenty five, fewer but stronger players are emerging, led by those with robust technology, integrated value chains and bankable offtake models. De Norda is among the few positioned to scale sustainability.

Europe remains the front runner, thanks to strong policy support, industrial demand and a mature regulatory framework. Electrolyzer capacity is growing and integrated hubs are coming online. China is accelerating with large scale pilot programs and infrastructure investments to bridge the gap between pilot and commercialization. India is mobilizing public and private capital to meet its 2030 target of 5,000,000 tons of green hydrogen annually, aiming to become a global hub. Latin America, notably Brazil, Chile and Bolivia, are leaving abundant renewables and export potential through new incentives.

North Africa continues to offer competitive hydrogen production cost due to lower renewable energy prices. In The U. S, the updated IRA 45B provision extends to $3 per kilo tax credit to projects starting before January 2028, ushering in a phase of market stability. In today’s complex evolving market landscape, our approach is proactive and forward looking. We are actively developing strategic partnership with key international technology solution providers to accelerate the penetration of energy transition technologies across geographies and applications.

A clear example is a strategic agreement signed with Ezhaki Gazay for the commercial and technical development of a small scale electrolyzer based on technology. In parallel, we are actively enhancing our alkali water electrolyte technology for large scale green hydrogen production, while also exploring the potential of emerging technologies such as AEM, anion exchange membrane, that could play a significant role in the future technology mix. At the same time, we are in the final stages of field testing our proprietary small scale electrolyzer, Dragonfly, designed to serve the promising decentralized hydrogen market. Finally, beyond hydrogen, within the broader energy transition space, we are leveraging our deep electrochemical expertise to develop innovative solution for new markets and emerging needs, particularly those linked to the circular economy. One example is our work in lithium refining, which I will cover on the next slide.

2025 marks a strategic milestone for Denora. We have officially entered the lithium refining market. The lithium market is expected to grow at around 15% annually, driven by the rise of artificial intelligence and electric mobility. However, this growth comes with challenges, limited lithium availability and environmental cost of extraction. That’s where we come in.

While we are long been part of the lithium value supplying electrodes anodic coatings for copper foil, the so called copper foil used in battery packs, this year, we have taken a significant step forward. We are now developing electrochemical solution for lithium refining, building on our deep expertise. Why electrochemistry? Because it offers a cleaner, more efficient alternative to traditional chemical refining. It reduces operating cost, avoids the transport of chemical to refining sites, typically located in remote areas far from the chemical plants where reagents are produced, cuts water usage of around 30% and significantly lowers the environmental footprint.

The technological solution we are developing is designed to handle all major lithium feedstocks, rocks, brine, clay and even battery scrap. The last one is particularly important. By enabling the recovery from end of life batteries, we are not just refining lithium. We are enabling circularity. We have already

Conference Operator, Chorus Call: for approximately €10,000,000 with a Japanese customer to deliver a cutting edge plant for recovering lithium hydroxide from spent batteries. This end to end solution will recover nearly all raw materials, eliminate most chemical

Paolo de la Cain, CEO, De Nora: circularity. Inputs and return battery grade lithium ready for reuse, fully aligned with global best practices and sustainability goals. And we are not stopping there. In 2024, we partnered with a Canadian lithium refiner to adapt our technology for use in lithium applications. In 2025, we are already contributing to some of their projects.

Looking ahead, we believe electrochemistry can unlock even broader opportunities in the circular economy, recovering valuable chemicals from industrial byproducts and enabling profitable circularity across sectors. This initiative is a strong example of the NORA technological agility, our ability to adapt, evolve and apply our know how to new frontiers. It’s now sorry, it’s how we create value, drive sustainability and lead in the energy transition. To conclude this review of our H1 twenty twenty five business performance, DeNora once again demonstrates a remarkable resilience even in a complex scenario. With a clear strategic vision, we are able to deliver solid and consistent growth.

With that, I hand it to Luca for the financial review.

Luca Al Oglaloro, CFO, De Nora: Thank you, Paolo. Good afternoon, everyone, and a warm welcome from my side as well. The second quarter results were positive, thanks to the solid performance across all our lines of business. As shown in the top left chart, revenues grew year on year, in line with our low single digit guidance for 2025 and maintained strong sequential performance, increasing by over 7% compared to Q1 twenty twenty five. Revenues were negatively impacted by approximately €5,000,000 due to the evolution of ForEx currencies, primarily driven by the U.

S. Dollar. Excluding this effect, year on year growth would have exceeded 4%. The EBITDA margin was in line with the previous two quarters and remained above the guidance for the current fiscal year, mainly thanks to the brilliant performance of the water business. Breaking it down by business line.

As shown in the top right chart, the electrode segment grew over 2% year on year or approximately 4% at constant exchange rates. EBITDA margin remained broadly in line with the 2024, although slightly lower than in Q1, reflecting a different mix of ongoing projects. The Water Technologies business in the bottom left chart grew by 2.2% year on year despite the negative effect of the U. S. Dollar.

In fact, at constant exchange rates, revenue growth would have exceeded 6%. The push line continues to outperform expectations, marking the fifth consecutive quarter of double digit growth. WTS segment reflects the current project portfolio scheduling, with a stronger concentration of activity expected in the latter part of the year. Operating margin remains significantly higher than in 2024, driven not only by the solid performance of the Pulse line but also by the growing contribution of aftermarket revenues within the WTS segment. Finally, the energy transition business reported revenues broadly in line with the same period in 2024, after the project schedules agreed with the client.

Volume development supported a positive low double digit profitability. Let’s now move on to the half year results. Revenues for the first six months grew by approximately 4%, reaching €416,000,000 The result was negatively impacted by around €3,000,000 due to the evolution of the currencies, mainly the U. S. Dollar, which contributed positively by $2,000,000 in Q1 and negatively by $5,000,000 in Q2.

Excluding this effect, year on year growth would have been close to 5%. Geographical breakdown remained well balanced. Compared to the same period in 2024, we recorded a 13% increase in The Americas, driven by both electrode technologies and Water and a 6% increase in APAC, supported mainly by the Electro Technologies segment. These gains were partially offset by a decline in the EMEA region. Electro technology grew by around 8% year on year, reflecting solid execution of the project backlog.

Growth was primarily driven by the chlor alkali and electronics lines, both of which increased by about 16%, while the electrowinning segment recorded a double digit decline. The negative impact of currencies evolution was approximately €14,500,000 Net of this effect, revenues would have grown by approximately 9%, aftermarket accounted for about 45% of this segment’s total sales. The Water business posted overall growth of more than 5%, which would rise to 6.5 at constant exchange rates. This performance was supported by the Pulse line, which grew by approximately 26% year on year, driven by volume increase. The WTI segment recorded a decline of about 6%, mainly due to the disposal of the Marine business, which impacted the comparison by around €3,500,000 After adjusting for this effect and excluding the €1,000,000 negative impact from the U.

S. Dollar exchange rate, the decrease would have been limited to around 1%. This reflects the phasing of projects in the current backlog with a significant revenue concentration expected in the fourth quarter, similar to last year. A particularly positive note comes from aftermarket services, which in the first half represented 44% of WTS REC revenues, up by 13% year on year, with a positive impact of the on this segment’s profitability. Finally, in the Energy Transition segment, project execution is progressing as planned.

We expect to complete NEOM by August, followed by STEGRA in the following quarter. The first half performance mainly reflects the low revenue contribution in Q1, which was due to the planned project scheduling. At a consolidated level, we expect a sequential volume growth in the coming quarter, with a significant concentration in the final quarter of the year, as agreed with our clients, supporting the achievement of our 2025 revenue guidance. On Page 18, you can appreciate our backlog at the June 2025 that Paolo has already commented on. We are now on Slide 19, which presents an overview of our operating cost structure.

In the first half, the increase in G and A and corporate costs reflects inflationary dynamics and the carryover impact of corporate structure enhancement implemented in the 2024. R and D expenses remained broadly stable as a percentage of revenues compared to H1 twenty twenty four, averaging around 2%, including the R and D cost in the Energy Transition segment, eligible for the EPCEI grant that, as from 2025, has been accounted as nonrecurring. Let’s move on to Slide 20. Adjusted EBITDA in the first half increased by approximately 8% year on year, reaching 19.6% of revenues, about 800 basis points higher than the 2024, mainly driven by the water business. The strong performance reflects the positive revenue trend.

It highlights both the steady growth of our core business and the regained operational efficiency following the production process optimization completed in 2024. The Electro Technologies division reported a 21.4% profitability, reflecting, compared to the same period of 2024, different product and geographical mix and especially lower contribution of the retrofitting line, which decreased by around 28% year on year. The Water Technologies business achieved a strong 45% growth in adjusted EBITDA, with an incidental revenues close to 22%, roughly six percentage points higher than compared to the 2024. This performance reflects the positive contribution of both the WTS segment WTS and Pool segment, as already explained in the previous conference call. Regarding the pool segment, the increase in profitability was largely due to the higher volumes reported during the semester.

WTS segment also saw improved profitability, supported by several key factors, including the expansion of revenues from aftermarket services and optimization of operational structure also due to the divestments of the Marine business. Additionally, the segment benefited from a one off gain of just under €1,000,000 from the disposal of certain assets related to the fracking business in The U. S. In conclusion, the Water business continues to be solid and strong, demonstrating its ability to generate value for the group over time. Anticipated increase in the weight of WTS revenues within the total Water business is expected in the coming quarters.

This, combined with the typical progression of operating costs throughout the year and the projected higher share of revenues from the new equipment in the second half, should progressively bring the business unit profitability more in line with the 2025 guidance. When it comes to the energy transition business, the volume recovery in Q2 twenty twenty five enabled the segment to reach breakeven in the semester with a slightly positive margin. This result is particularly encouraging, especially considering that it includes approximately 2,000,000 in provisions recorded in the first quarter. This relates to a European customer that announced it would cease operations and has started a settlement procedure. Excluding these provisions, the adjusted EBITDA margin would have been around 7% despite R and D expenses accounting for 9% of revenues 12.6%, including nonrecurring R and D costs eligible for the EPCI grant.

Considering the expected progressive increase in volumes over the coming quarters, we are confident that the Energy Transition business segment will achieve a positive mid single digit adjusted EBITDA margin for the full year 2025. Finally, on Slide 21, let’s take a look at the evolution of our net financial position. The net operating cash flow typically reflects the seasonal dynamics of the net working capital in the early part of the year as well as the dividend payment, which usually takes place in April. As for the net working capital, let me underline that at the June 2025, the incidence on revenues was in line with the 2024, with inventory ratio below 30%, specifically 28%. The 15,100,000 increase in cash tax outflows is purely a timing effect and does not affect the group’s effective tax rate.

It is mainly due to the settlement of corporate tax balances, specifically those of Germany in 2023 and Japan in 2024. Moreover, in 2024, the group benefited from the use of tax credits from prior year. No similar increase in cash tax payments is expected in the 2025. Investments amounted to approximately €29,000,000 as planned for the first semester twenty twenty five. In the second half of the year, we expect an improvement in operating cash flow, alongside and a clear acceleration in the execution of the 2025 CapEx plan.

The solid group’s financial structure and strong credit spending place us in an optimal position to pursue opportunities for inorganic growth. We are now on Slide 22, where we will give an update on our 2025 outlook. We confirm our revenue guidance, which points to low single digit growth for the full year. While first half performance exceeded this target, there is a potential risk that a combined continued strengthening of the euro against the U. S.

Dollar could partially erode the volume gains achieved in the first six months. Regarding the EBITDA margin, in light on the solid results achieved so far this year, we are raising our guidance and expect the adjusted EBITDA margin to be in the 17% to 18% range. With that, I leave the floor to Chiara for the updates on our ESG journey. Chiara?

Chiara Locati, Head of Investor Relations and ESG Director, De Nora: Thank you, Luca. I’m pleased to share a quick update on our sustainability plan and what we have been doing so far. As you’ll see, these initiatives aren’t separate from the rest of the business. They are built into our development strategies and play an active role in driving them forward. In the first part of the year, we continued rolling out our program to install photovoltaic systems at our facilities worldwide.

Our goal is to cover part of our energy needs by producing renewable energy directly on-site. Following the approximately three eighty megawatt hour installed at our Colmar, U. S. And Tamworth, U. K.

Sites, we are developing a new solar park at our Mentor facility in Ohio, U. S, which will have an installed capacity of around 1.1 gigawatt hour per year. Installation is expected to be completed by the August, bringing our total installed capacity across all plants globally to approximately five gigawatt hours, an important increase from the 3.5 gigawatt hour recorded at the 2024. On the green innovation front, we are continuing our work on the sustainability product scorecard. By the 2025, we plan to have developed the scorecard for about 15 products, including some new has developed both the value proposition and the visual format for each product.

And in the second half of the year, the scorecard will be presented to the group’s sales force. We’ve already received a request from some clients regarding key data that will be included in the scorecard, such as, for instance, the carbon footprint or the LTA, the life cycle assessment of our technological solution. This shows that being able to track, measure and improve specific environmental impact factor is becoming and will continue to be a real competitive advantage that benefits the business. Finally, on the people pillar side, De Nord has launched its new employee value proposition, Open Surprising Path, that enhance our people potential. It includes a new corporate blog, Called Open, designed to attract and retain talent.

So we are particularly proud about our no, no. We are particularly proud with the advancement of our sustainability plan. And with that, I hand it over to Paolo for the final remarks.

Paolo de la Cain, CEO, De Nora: Thank you, Chiara. So to wrap up, our final remarks are the following: solid results drive the upgrade in 2025 profitability guidance despite a challenging macroeconomic scenario. Core businesses, electrode and water technologies, are growing and profitable, confirming the positive short and midterm view. While execution on green hydrogen projects is on time, we advanced future growth developing being strategic partnership and enhancing our technological solutions. We entered the new markets of PFAS and lithium refining, leveraging our unparalleled technological leadership.

We are assessing external growth opportunities in the Water Technology business to strengthen our position in the value chain and reach new markets. Now we can open up to Q and A.

Conference Operator, Chorus Call: Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. The first question is from Matteo Bonizzone, Kepler Cheuvreux. Please go ahead.

Matteo Bonizzone, Analyst, Kepler Cheuvreux: Thank you. Good afternoon. Pardon, if you have already clarified maybe partially some points during the call, but just a clarification in some cases. First question, WaterTech margin remained particularly high, about 20% in the second quarter for reasons which you have clearly well explained. I have understood correctly that the CFO say that in the second half of the year, there should be a normalization to a range maybe potentially, let’s say, around 15% already in the second half?

Or difficult to say, just to have maybe more precise indication on this margin water tech, which was outstanding for the first half? Second question relates to cash flow. The net cash position was in line with not a year ago, more or less, no, euros 12,000,000, which is more or less in line with €40,000,000 in June 2024. And looking at the cash flow bridge, there was a pretty large €37,000,000 outflow related to other receivable and payable in the cash flow statement. Can you a little bit clarify this item, which has dragged substantial cash in the first half of the year?

And then maybe, if I may, let’s say, some commentary on the central case scenario for the backlog in Energy Transition at the year end. Maybe you have now we are at the July, more precise sensitivity on what kind of intake should we have we should have by the end of the year? Also, were press report about a potential project of four gigawatts in The Middle East, Yambo, two times the size of NEOM, with the fees being awarded to Technica Sinopeka. Could it be it’s a large project potentially. Could it be of interest for Nucyra and for you?

Or early to say? Thanks.

Luca Al Oglaloro, CFO, De Nora: Thank you, Matteo. I will take the first two. So the with regard to the water technologies, the first half has been great in terms of profitability with close to 22%. When I said normalization, I mean that in the second part, it will be definitely lower than the first half because of the reason I already explained. But we expect 2018 indicated at the end of the year to be higher than the guidance that we gave the beginning of the year.

That was, if I’m not mistaken, around 16%. I would say probably more, let’s say, one percentage point higher than this could be reasonable than we will see what will come in the next months. With regards to the cash flow, yes, the reduction in change in other receivables and payables, that was, as you said, around €30,000,000 is mainly due to four effects. The first one is the reduction that was planned, expected in customer prepayment that we recorded in 2023 and 2024 and is no longer there in 2025. As I just said, it was expected in our cash planning for 2025.

Then there was an effect also on the VAT payments, larger. There were some also advanced payments to supplier that is typical for the business. It might happen. And finally, payables towards employees for MBOs and long term incentive plan. These are the main reason of this €30,000,000 absorption of cash.

Paolo?

Paolo de la Cain, CEO, De Nora: Yes. About backlog in Energy Transition, most of the current backlog will be consumed within this year. So we are now counting on the projects that mainly our JV is negotiating right now. It’s known that there is Moheve, formerly Cepsa in Spain, very close to be finalized, 300 megawatt. Our joint venture announced a FEED of other 600 megawatts.

So in total, they have more than one gigawatt of projects under very deep discussions right now, and we are confident that part of them will be awarded in a way that we can somehow respect what we have already announced about 2026 and 2027. That is related to the backlog. Related to Yambu project in Saudi Arabia, yes, it is quite a significant project. It was in pipeline since a long time. Now it’s becoming more and more real.

For sure, such a size, I would exclude that only one player will win completely the total project. So there is a chance that more than one player will be involved. We know that our joint venture, Tyssenkruvno Serra, is in the game. And so we hope that we’ll get a piece of it, for sure, based on already the very strong reference with NEOMI Saudi. Thank you.

Conference Operator, Chorus Call: The next question is from Daniele de Florentis, Equitasium. Please go ahead.

Daniele de Florentis, Analyst, Equitasium: Hi, good evening and thanks for taking my question. I have three of them. The first one is about the guidance for the 2026 and for 2027. You confirmed the guidance for 2025 and if you can give some updates on guidance for the medium long term period? The second one is about the euro dollar exchange rate.

It could affect in some way the medium to long term guidance you gave in last March? And the third one is about the M and A. You mentioned in the press release, what type of technologies are you looking at for the water segment? And if you are planning to move closer to the end customer, maybe creating new sales channels? Thanks.

Paolo de la Cain, CEO, De Nora: Sorry, I missed the last part of your third question. You asked about M and A and technology, then I lost the last word.

Daniele de Florentis, Analyst, Equitasium: What type of technology are you looking at in And Water are you planning to move closer to the end customer? Or maybe creating a new sales channel? Or I don’t know what.

Paolo de la Cain, CEO, De Nora: Okay, okay, okay. Thanks.

Luca Al Oglaloro, CFO, De Nora: Yes. With regards to 2026 guidance, today, do not see reasons to change it. So it’s confirmed. We don’t see, I mean, a different scenario and situation compared to what we anticipated in our last discussion. Then with regard to the euro dollar, it’s too the market is so volatile that we are not in a position today to predict what will be the impact on the plan for the next two years, to be frank.

Paolo, for Yes.

Paolo de la Cain, CEO, De Nora: On M and A, yes, we are working on a few M and A projects right now. They are mainly related to water business, absolutely. And are driven by the strategy that we have defined, which is to exactly as you said, to get closer to our end customers, meaning be able to provide more integrated solutions. And they are somehow also opening up the chance to address new industrial segments beyond what we are already doing. So it’s a combination of solution providing and entry into new segment, which is one of the strategy that we have blessed recently that we’re to work on the next years.

Conference Operator, Chorus Call: The next question is a follow-up from Mathieu Bonitsoni, Kepler Cheuvreux. Please go ahead.

Matteo Bonizzone, Analyst, Kepler Cheuvreux: Yes, thank you. A quick follow-up on the tax rate. Also on that, maybe you have already touched during your speech. The first half tax rate was higher than normal one because it was between 3334%. Maybe also you mentioned, but I was not particularly paying attention to some normalization, which should occur going forward.

Normally, the tax rate for you, if I look at my model, was maybe closer to 26% to 29% range historically. What is an indication for the tax rate for this year and those maybe for the next years as a reference point? Thanks.

Luca Al Oglaloro, CFO, De Nora: Yes. Matteo, the you’re right. In the first half, it was higher due to because we made a provision in the first half for tax audit just reached with German tax authorities relative to the period twenty eighteen-twenty twenty two for a transfer pricing matter. That was more or less €2,500,000 That is the reason of this slight increase of the tax rate compared to the historical ratio that we, let’s say, that we estimate also for the next quarter. So it should go back to a normalized ratio in the next quarter.

Matteo Bonizzone, Analyst, Kepler Cheuvreux: Okay. Thank you.

Conference Operator, Chorus Call: Gentlemen, Ms. Locati, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Chiara Locati, Head of Investor Relations and ESG Director, De Nora: Well, thank you very much everyone for attending this conference call. And as usual, as you know, the Investor Relations department is at your disposal for any additional questions. Thank you.

Paolo de la Cain, CEO, De Nora: Thank you, everybody.

Conference Operator, Chorus Call: Ladies and gentlemen, thank you for joining. The conference is now over and you may disconnect your telephones.

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