Earnings call transcript: Enav Q4 2024 reports strong earnings beat

Enav SpA (ENAV.MI) reported its fourth-quarter 2024 earnings, significantly surpassing market expectations. The company posted an actual EPS of €0.074 against a forecast of €0.0356, and actual revenue of €264.17 million compared to the expected €239.1 million. This strong performance led to a 3.84% increase in its stock price, closing at €3.648. According to InvestingPro data, the company maintains a "GOOD" overall financial health score of 2.88, with particularly strong profitability metrics. The company’s robust financial results reflect strategic advancements in technology and operational efficiency.

Key Takeaways

• Enav’s Q4 2024 earnings per share more than doubled the forecast.
• Revenue exceeded expectations by over €25 million.
• Stock price surged by 3.84% following the earnings announcement.
• Technological and operational advancements drive performance.
• Strong future outlook with significant investment plans.

Company Performance

Enav demonstrated a commendable performance in Q4 2024, with revenue reaching €1,037 million for the year, marking a 4% increase year-over-year. The company achieved its highest-ever EBITDA at €311 million. Net income rose by 11.5% to €125.7 million, while net debt decreased by 20% to €258 million, underscoring Enav’s strong financial health and operational efficiency in the European air navigation sector.

Financial Highlights

• Revenue: €1,037 million (+4% YoY)
• EBITDA: €311 million (highest ever)
• Net Income: €125.7 million (+11.5% YoY)
• Free Cash Flow: €199 million (1.4x increase)
• Net Debt: €258 million (down 20% YoY)

Earnings vs. Forecast

Enav’s actual EPS was €0.074, significantly higher than the forecasted €0.0356, resulting in a surprise of over 100%. Revenue also exceeded expectations, reaching €264.17 million against a forecast of €239.1 million, a positive surprise of approximately 10.5%. These results highlight Enav’s ability to outperform market predictions consistently.

Market Reaction

Following the earnings release, Enav’s stock price increased by 3.84%, closing at €3.648. This movement reflects investor confidence in the company’s strong financial performance and strategic direction. Based on InvestingPro Fair Value analysis, the stock currently appears slightly undervalued. With an Altman Z-Score of 6.4 indicating strong financial health and analyst consensus showing potential upside, the stock remains well-positioned within its 52-week range, with a high of €4.25 and a low of €3.322, indicating potential for further growth.

Outlook & Guidance

Enav’s strategic outlook remains positive, with a target revenue of €1,200 million by 2029 and an EBITDA target of €360 million. The company plans to double its non-regulated business revenue and invest €570 million from 2025 to 2029. Enav’s dividend policy aims to distribute 80% of free cash flow, reflecting a commitment to shareholder returns.

Executive Commentary

CEO Pasqualino Monti emphasized Enav’s global excellence and sustainability efforts, stating, "We sell excellence around the world, just like a few international players." He also highlighted the company’s focus on expanding its drone business, saying, "We want to capitalize on our expertise and scale up to a full-fledged drone business."

Risks and Challenges

• Potential regulatory changes could impact operational frameworks.
• Macroeconomic pressures may influence air traffic growth.
• Technological advancements require significant investment.
• Competition from other European air navigation service providers.
• Market expansion in regions like India and Brazil involves geopolitical risks.

Q&A

During the earnings call, analysts inquired about Enav’s regulatory stability and M&A strategy. The company confirmed a stable regulatory framework and an ongoing M&A strategy with a €350 million budget. Enav expressed confidence in achieving its 2025 bonus targets, reflecting its strong strategic positioning.

Full transcript - Enav SpA (ENAV) Q4 2024:

Moderator/Host, ENAV: Good afternoon, everyone, and welcome to the Capital Market Day of Enel. Welcome to the people here in the room, to the press and to the ones connected to the webcast. I’m here today with our CEO, Paspolino Monti CFO, Luca Coleman and the Director of Strategy, Felice Catapano. On the agenda, sorry, we can see how the management will walk you through full year delivery and the planned numbers. After the presentation, we will have some closing remarks and a Q and A session.

Please note that the Q and A session will be in Italian. So for those of you who need it, you have the translation device of

: 19.

Corporate Video/Narrator, ENAV: Every flight has a story of safety, efficiency, and innovation. At ENAV, we write it every day by charting new today’s youth to become tomorrow’s professionals, key players in a constantly evolving sector. Every day, we shape a more sustainable future, creating solutions that reduce environmental impact, generating value for people and the planet. This is how we have established ourselves as one of the world’s leading companies. ENAV, innovating the sky.

Pasqualino Monti, CEO, ENAV: Thank you. Thank you, Fabrizio, and welcome to everybody. I will start my presentation with an overview of the 2024 performance. Managerial actions and execution of our strategy positioned the company on levels that were never achieved in the past. Starting with the operational delivery.

2024 was strong across the board. Let me walk you through some of the main highlights. Service units recorded a double digit increase for both en route and terminal. Number of flights increased significantly versus previous year for both en route and terminal, We then en route flights over 2,200,000. On capacity, we reached 0.066 average millions of delay per flight, better than the targeted level of 0.07.

Our efforts on sustainability yielded visible results as well. We reduced our Scope one and Scope two CO2 emissions by more than 87% against the 2019 baseline. And finally, we were very pleased with the inclusion of ENAV in the A List of the carbon disclosure project. Let’s move now to financials. As 2024 was remarkable also from this point of view.

We successfully delivered our guidance on financial targets, marking the highest result ever reached by the company in terms of revenues, EBITDA and net income. Revenues came in at €1,037,000,000 and EBITDA at €311,000,000 both in line with the guidance set last year. More in detail, let me highlight the performance of the non regulated segment, which outperformed expectations for two years in a row. Indeed, non regulated recorded €15,000,000 in revenues for 2024, up double digit versus 2023. The higher level of delivery sets the stage for future growth, with which will benefit also from the significant backlog built for 2025 and beyond.

Our financial position is extremely solid. Net debt at around €260,000,000 is down versus previous year by 20%, resulting in a net debtEBITDA ratio below one. Free cash flow reached almost €200,000,000 up by 1.4x year on year. All of this resulted in visible value creation for our shareholders, with total shareholders’ return for 2024 at 27% and a material step up of our dividend per share to €0.27 per share that will be approved in the next Annual General Meeting in May 2025. The proven ability to execute and deliver is the foundation of ENAV’s path going forward.

Let’s now deep dive into the strategic plan. The plan is built around a clear set of strategic pillars, a combination of traditional core values for ENAV and new ones. Altogether, they are aimed at creating a framework that will be that will enable the company to meet targets and generate long term sustainable value. Our strategic plan revolves around three main areas. The first one is the regulated market, which will remain the core business for us.

In this segment, we will focus on five strategic initiatives, all aimed at improving performance and efficiency. Then we have the non regulated market. We’ll continue to accelerate on existing initiatives and start new businesses and markets. This is key to generate a new stream of revenues, add value as well as recurring margins on top of the regulated business. Lastly, we will change our organization, which must evolve in order to support the proper deployment of the business strategy and enable further value creation.

Let’s now take a closer look to the regulated business, starting with the evolution of the context and regulatory changes. Over the past years, the context has been quite difficult to navigate and was impacted by volatility. 2023 went back on track with lower volatility and visible growth in traffic at the national level. 2024 continued on the same note and further extended this trend. Indeed, both flights and traffic in Italy recorded a double digit increase versus 2019 levels.

Looking ahead, traffic and number of flights are expected to grow at low single digit CAGR over the next five years. The main highlight is obviously the new regulatory period, the RP4, that will cover the twenty twenty five-twenty twenty nine period. Luca will go into more details, but I wanted to stress a fundamental feature of RP4, the stability. In fact, the new regulation confirmed all of the relevant features of RP3 and did not introduce any new negative provision. In a supportive traffic environment, the stability and visibility offered by the new regulatory period are fundamental for our plan.

Let’s move to the details of the plan. We start with the regulated business. The priority of the for the regulated market is to preserve operating excellence in our core business, confirming ENAV’s technological leadership and excellence in service level. The new plan reaffirms the crucial role of the five legacy key initiatives and focuses efforts on execution. Over the next five years, we will achieve relevant progress on all these initiatives, reaching completion of almost all of them by 2029 or shortly afterwards.

These initiatives will allow us to have state of the art technological infrastructure, therefore, enabling continued leadership in operational excellence. Their implementation will also unlock efficiencies and savings. Over the planned period, we expect cumulated savings of around EUR 21,000,000, while at regime, we expect savings of EUR 47,000,000 per annum as we reach full implementation. The continuity we have on the core business is coupled with a further push on the non regulated segment. Our ambition for the non regulated market is to continue improve our competitive positioning, opening up to new businesses and markets.

Building on the progress achieved so far, execution of the strategy will double revenues by 2029. Worth to highlight that the value creation associated with some of the strategic initiatives is not included in plan numbers, leading to upside potential versus targets. The growth path will play out along three main routes: the evolution of current portfolio of products and services to keep up with market needs and remain competitive opening of new markets through setup of new offices to ensure proper local presence and lastly, entering new businesses to valorize NHAV’s assets and distinctive know how. Starting with the details on this, let’s take a closer look for the first two strategic. The expansion of the portfolio of activities will be tailored on the priorities of each single identity through which we operate.

For ENAV, the main driver is to grow commercial opportunities and valorize its distinctive know how. Consultancy, training and technical services will become more competitive and will be scaled up also via partnership. Tecnosky will continue to build its offering with new application for ATM and weather monitoring and are looking new tiers of customers. EDS will strive to upgrade its existing products and at the same time, implement new systems for aeronautical services. Development of the non regulated activities will be further improved by a stronger international presence.

We will enter new markets for EDS and Tecnoskaya, and we will open three offices abroad that will be offering all of ENAV products in their respective market. New countries have been selected based on their potential in terms of planned investments in airport infrastructures or the ability to become aviation or tourism hubs for the respective region. We are starting railway. India is set to open in the third quarter of this year and will be followed at the beginning of twenty twenty six by Brazil and Saudi Arabia. Portfolio and footprint expansion will go together with new businesses.

Let’s start with drones. Drones are not really a new business for ENAV. We are the only player in Europe with both common information service provider and UTM space service provider certifications. With the common information service provider certification by ENAC, in particular, we are the sole air navigation service provider also for drones. We have expertise as we completed several pilot projects in infrastructure monitoring, logistics and drone detections that have created an important know how within our group.

Expectation for growth in the drone market are robust. We want to capitalize our expertise and scale up to a full fledged drone business. We can serve as an enabler and focal point of a national value chain for drones, thanks to our unique position. We are ready to activate an offering that can include monitoring of critical infrastructure, drone detection systems and that can be expanded to several areas like logistics and insurance, for example. The business model will be handled through a new co fully dedicated to the non regulated drone business.

Still on new businesses, we move to Slide 13 more closely to the Energy Service Company and Digital Academy. A stronger positioning comes with the assessment of any opportunity available to create value. We have identified two new business models stemming from the same idea: generate revenue efficiency by transforming an operating cost into a new business. The first one is the energy service company. Commitment to sustainability and the ongoing efforts on efficiency underpin a reduction in our energy consumption by more than 15% by 2029.

The energy service company will transform the cost into an opportunity by selling energy efficiency services to small and medium airports, starting with those located in the South Of Italy. This will improve our energy consumption, reduce costs and enable a new stream of revenues and a better sustainability profile for our customers. The other new business, the Digital Academy, follows the same principle. Our in house training facility is a certified excellence center. We digitalized it into an e learning platform.

This platform will give us flexibility and efficiency in the way we train our personnel and will enable us to generate revenues by selling aeronautical training, procedure, design and release of aviation degrees. Start up for these two initiatives is underway. Let me stress once again that these two initiatives have not been valorized into the business plan. So their execution will yield upside to plan numbers. Positioning in the non regulated market can be improved also via M and A.

M and A will be used to accelerate the deployment of our strategy. We will apply a selective approach, and we’ll evaluate opportunities based on the possibility to access new technology and know how, increase market share, optimize costs and supply chain through synergies. We confirmed the M and A strategy presented last year, ranging from licensees and software services to meteorology and drones. We stand ready to execute on all of them, provided that they will meet our criteria. Thanks to the remarkable performance achieved, we can benefit from higher levels of headroom.

We have up to €350,000,000 to be deployed by 2029 on value accretive deals. The potential transactions will be fully founded through new debt, always maintaining our aim of preserving financial solidity and sustainability. We are currently in the advanced stage of negotiations on a few deals, and I believe you will hear from us shortly. All the strategic initiatives are connected to our broader sustainability strategy. As you know, sustainability is deeply rooted in what we do.

Our commitment is clear and continues to be highlighted by the milestone we achieved also in 2024, as commented earlier. Looking at the key strategic initiatives, it’s easy to see how they connect to one or even more than one of the ESG priorities we have set in our sustainability plan. In the coming weeks, we will publish our sustainability plan, setting the bar even higher on our ESG commitments. Let’s move now to the evolution of our organization. The changes to our corporate organization will start with a clear distinction between regulated and non regulated activities.

ENAB will stay as the corporate holding vehicle that oversees the regulated market and will control directly other three entities: D FLYHT, focused on the regulated market for drones TechnoSky, mostly operating as captive technology provider for the regulated market and a new vehicle fully dedicated to the non regulated market that will retain control of the non regulated activities, both existing and new ones. The evolution will not be limited to the organization. We are also going to change the operating model. The way we work will become more digital, thanks to the migration on cloud of the ERP and the AI applications. Our workforce will benefit from excellent centers like the Digital Academy and the implementation of talent factories.

Costs will be reduced, thanks to the insourcing of some strategic activities. The organizational changes, coupled with the execution of the strategy, will change ENAV. Let’s move now to our targets. In 2024, we have achieved remarkable results. For the future, growth will continue at a sustainable rate even after the impact associated with the regulatory effort.

In 2029, at the end of RP4, ENAV is set to achieve results even better than those recorded at the end of RP3. Indeed, thanks to our value driven strategy, revenues will reach €1,200,000,000 in 2029, also supported by the growing contribution of non regulated businesses. EBITDA will increase with a CAGR of 3% and reach €360,000,000 a level never reached by the company. Over the planned period, we will generate more than €1,000,000,000 of free cash flow on a cumulative basis. The value generated will support shareholder remuneration, a cornerstone of our strategy.

Let’s focus on the dividend policy. We are confident that our strategy will deliver visible and predictable results. Based on this, we changed the dividend policy. For the fiscal year 2024, we will propose to the Annual General Meeting in May a dividend per share of €0.27 per share, up double digit versus previous year. Over the planned period, shareholders will receive a DPS of €0.28 in 2025 and growing to 0.32 per share in 2029.

Over the prime period, this corresponds to an average payout of real free cash flow of around 80%, a rule we believe can be kept also beyond 2029. We wanted a dividend policy that was simple and clear, based on real free cash flows rather than a proxy, and that would allow our shareholder to benefit from the stability and visibility of the regulation for the next five years. And now I hand over to the CFO that will walk you through the numbers of 2024 and of the plan. I will come back later for closing remarks.

: Thank you, Pascua Alino, and good afternoon to everybody. Our CEO has already shown you the key highlights of the operating and financial performance 2024. Last year, we achieved remarkable results, set on a level that we never reached both operationally and financially. I will go more in details starting with the traffic. 2024 has extended the positive momentum recorded in 2023.

We are now handling traffic levels that are far above the record of 2019 and are projected to grow even further in the coming years. Italy has been the best performer of the reference group with an year on year growth of 10.5%, four percentage points better than the average of the EU countries. En route traffic is up double digit, driven by sound growth of both international and overfly. Terminal benefited from positive performance across all three charging zones, ending up at €1,097,000,000 up by 10% versus previous year. This operating performance bodes well for our plan targets and was very visible across financial delivery in 2024.

Let’s move to the economics with revenues and cost dynamics. Revenues came at €1,037,000,000 up by around 4% versus 2023 as a result of operating activities worth around €1,050,000,000 driven by higher traffic and outstanding performance of not regulated business that is up around 14% year on year, well above the guidance set for this segment for 2024. Impact from balance for around minus €56,000,000 which is the net effect of the positive balance generated in 2024 for about €49,000,000 and the negative €105,000,000 of balance generated in the previous year that are cashed in through the 2024 tariff. This is mainly related to the second tranche of the balance of the combined period twenty twenty-twenty twenty one, the so called COVID balance. Costs amounted to 2,007 and €26,000,000 up by €26,000,000 versus 2023.

The increase is mainly associated with higher personnel costs, which stood at €592,000,000 on the back of the planning wage increase. This is linked to the inflation adjustment. A higher workforce to manage the relevant increase in traffic over the last two years and planned for 2025, and the extra time needed for the peak in traffic over the summer. Moving on to EBITDA and key financials. We can see that EBITDA came at €311,000,000 in line with the group’s guidance, the highest ever reached by the company.

The strong financial performance is further amplified as we move below the line. Indeed, income at €125,700,000 marks an 11.5% increase year on year. This is mainly on the back of lower G and A and provisions as higher depreciations are more than offset by lower provisions and lower financial expenses driven by higher financial income on deposits and the balanced actualization mechanism that partially offset the interest on debt. Same thing in results is mirrored also from a financial standpoint. Net debt ended up at €258,000,000 for 2024, down by almost 20% versus 2023.

Over the period, the company generated an operating cash flow of €278,000,000 which more than covered the cash CapEx and the payment of dividends worth a combined total of around €200,000,000 Let me highlight that free cash flow came at €199,000,000 up by 1.4 times versus 2023. As a consequence of the operational deleveraging, net debt to EBITDA ratio sits now at 0.8x. This strong financial position gives us the possibility to act swiftly to capture market opportunities, while preserving the overall financial stability granted by the balance sheet headroom that the plan will generate. Let’s now deep dive into the twenty twenty five-twenty twenty nine strategic plan. We start by looking at the key driver of our core business, the new regulation for twenty twenty five-twenty twenty nine, the so called LP4.

A few days ago, the performance review body, which is the technical organism that support the European Commission in the assessment of the performance plan of the EU states, issued a recommendation to the commission and highlighted the consistency of the Italian plan for all the performance areas. Hence, it recommended the approval for Italy. This is a key milestone for us. Now the only remaining step is the formal approval from the European Commission. We are confident it will arrive by the first half of twenty twenty five.

As highlighted by our CEO, LP4 provides stability and continuity by confirming all regulatory metrics and KPIs of LP3. Regulatory compensation mechanisms such as those related to balance, traffic and OpEx efficiency are naturally reset to zero at the beginning of the regulatory period in the planning figures. Over time, actual operating data will start to accrue and there will be the possibility to benefit from new balances and do better than the regulatory assumptions. I will come back on this point later. Finally, LP4 introduced a change advocated by the company by which terminal charging zone will go from three to two.

Now all the airports will be under the same European regulation performance plan with rules in line with en route. Let’s take a closer look to the key regulatory assumptions of our plan. Our traffic forecast for EP4 closely mirrors the base euro controlled SAFFOR scenario that was published last February. Over the regulatory period, we expect an average annual growth rate of 2.9%, with a notable 6.2% increase in 2025 compared to 2024. This positive outlook is further supported by the strong performance that we have in January, up by 7.1% year on year and February of this year also, up by 7.6 year on year as reported also by Eurocontrol.

In addition to the traffic growth, it is important to highlight the impact of other key financial metrics, the expected increase in return of equity and the weighted average cost of capital are crucial factors that also help mitigate the reduction in the regulatory asset base. Specifically, the cost of capital included in the LP4 tariffs is forecasted to be higher than the one in the LP3 tariffs, which more than offset the decrease in RAB, ensuring the financial sustainability of the plan and reinforcing the company’s overall performance through the new regulatory period. Let me highlight that the PRB has underlined that Italy has the highest level of regulated WACC across member states in RP4. Before we move to the core of the strategic plan, I want to focus on a specific dynamic associated with the regulatory resets. I see the attention is increasing on this slide.

As I have just commented a couple of slides back, new regulatory periods always trigger a reset of regulatory mechanism for balanced compensation, traffic and OpEx efficiency. A new regulatory period brings regulated figures as close as possible to the latest actual level, hence limiting the accounting effect and the potential extra returns, particularly in the first year. Moving along the years, actual operating and financial performance might eventually still accrue incremental returns vis a vis the regulation, but this cannot be assumed a priority in the planning figure. These recurring and structural dynamics entail that the first year of any regulatory period will be weaker than the last one from the previous regulation. Looking more closely to the 2024 and 2025 bridge, is set to be lower by around €85,000,000 a decrease driven by balance reset for €49,000,000 regulatory reset on traffic and other operating parameters more efficiency worth around €38,000,000 partially offset by €2,000,000 positive impact of the cost of capital.

Mind you that 2025 EBITDA is an expected number and does not include any assumption on the contribution from regulatory mechanisms as explained before. Therefore, the real impact of the regulatory reset can only be measured once comparable data are available. In simple words, when we get closer to the actual data. Let’s deep dive now into twenty twenty five-twenty twenty nine strategic plan. Over the next five years, we will deploy investment for about €570,000,000 representing an increase of €74,000,000 compared to RP3.

The investment plan enables us to catch all opportunities and finalize the strategic initiatives we have outlined. Our investment strategy will ensure the continuous technological and infrastructural modernization of the group assets, ensuring full compliance with evolving European regulatory framework and enhancing at the same time both safety and capacity. Additionally, the plan will drive greater efficiency in the delivery of ATM services, reinforcing the group commitment to operational excellence and sustainability. Worth to highlight that the tariff defined for RP4 fully covered the investment plan. And now on the revenues.

Revenues are expected to reach €1,200,000,000 at the end of RP4, peaking versus the historical level ever achieved by the company. The lion’s share of revenues will continue to be generated by the core business, which is expected to yield €1,060,000,000 in 2029, underpinned by traffic volumes as well as by the execution of the key strategic initiatives. Not regulated will double revenues, mainly driven by the expansion of the core product offering set to account for around €70,000,000 in 2029, coupled with the contribution from new markets and new business that should be worth around €30,000,000 in total. Revenue expansion for the not regulated market can be further accelerated by the execution of M and A opportunities. Moving to costs on slide 13.

After the high single digit growth of several between 2024 and 2025, total costs are expected to increase over the planned period at a low single digit component growth rate, reaching €838,000,000 in 2029. This is a consequence of the effort to put into the digitalization of core processes and infrastructure that unlocked higher levels of productivity and efficiency. Looking more closely to costs, personnel costs are expected to reach €670,000,000 in 2029, driven by higher headcount and in line with operating growth trajectory. Worth to mention that despite increase in the workforce, the relative weight of personnel costs on total revenues decreased by seven percentage points from 63% to 56% at the end of the plan. External costs are expected to grow at a CAGR of 2.2% over the planned period, ex the expansion of the business and the geographical footprint trigger an increase in external costs.

Also for the external costs, let me highlight that the relative weight on total revenues remained flat, demonstrating the high focus placed on value creation and careful execution of the key strategic initiatives identified on both the regulated and non regulated business. Let me now guide you through the significant drivers of EBITDA growth from 2025 to 2029. EBITDA in 2029 is planned to reach €361,000,000 a new record level for the company that will be reached mainly thanks to higher traffic revenues in the core business, expansion of revenue from not regulated activities and the focus on cost optimization and efficiencies that mitigates the impact stemming from operating costs in the context of higher traffic, larger asset base and higher workforce. Managerial efforts on the top line as well as on cost ensure timely delivery of our strategy and enable higher level of performance and value creation. Moving on the next slide, we can see how financial sustainability can support value creation going forward.

Financial equilibrium has been one of the key priorities in the definition of the strategic plan. The group has proven its cash generation capabilities over the past year and the next five will not deviate from this path. Over the planned period, cumulated operating cash flow is planned to be equal to €1,600,000,000 Operating cash flow will fund investment, dividend policy and deleveraging, preserving financial sustainability along the growth trajectory set out for the company. Cash generation and financing strategy will result by 2029 in zero net debt as we create the space for optionality that can be activated on an as needed basis. Focusing on the potential extra needs of the core and non core business and cherry picking M and A.

Assuming a net debt EBITDA ratio of 1x as a fundamentally sustainable for our company, we would have headroom for EUR350 million by the end of the plan. We stand ready to use this flexibility, issuing more debt to fund M and A opportunities and enhance even further enough growth. Finally, let’s go to the planned targets. The twenty twenty five-twenty twenty nine strategic plan sets ambitious financial targets, with the total revenue expected to grow by 1.2 times, reaching a milestone of €1,200,000,000 by the end of twenty twenty nine. This growth reflects a solid and sustainable trajectory, driven by both core and not regulated performance, with the last one set to double by 2029.

The plan highlights the company’s effort to diversify and expand its revenue base with a focus on seizing new market opportunities outside the regulated business. In term of profitability, the company aims for an EBITDA of €361,000,000 by 2029 through solid operating results and efficient cost management, not considering the potential upside associated with the regulatory compensation mechanism. The net result of €165,000,000 in 2029 underscore the company’s commitment to deliver substantial bottom line growth, translating the top line growth into the solid financial performance and shareholder value. The stability and predictability of our targets were highlighted also by the sensitivities that we run by changing the underlying assumption on both the regulated and non regulated business. The analysis resulted in a very limited impact in terms of revenue and EBITDA at risk in case of a negative scenario.

Together, these targets show a clear path to sustained growth with a balanced focus on the revenue expansion, operational efficiency and the profitability over the next five years. This approach not only position us for long term value creation, but also supports our new dividend policy ensuring growth in earning and adequate returns to our investors, while upholding financial discipline and sustainability. And now I leave the floor to Pascuainho for the closing remarks.

Pasqualino Monti, CEO, ENAV: Thank you, Luca. Yes, the business plan we have presented today is solid and benefits from the stability granted by the new regulatory framework for the full plan horizon. The regulated business remains core. We will complete the key strategic initiatives in order to further improve the level of operating performance and preserve our technological leadership. This will position us in an optimal way to handle growing levels of traffic in the future.

New non regulated business will accelerate more than ever. Delivery has been very strong so far, and it will improve, thanks to the new businesses, the opening of new markets and the expansion of the portfolio of services we can offer outside of the regulated market. This segment is going to be crucial to diversify revenue sources and improve profitability of the group. The visibility we have on targets and the confidence on managerial execution translates into a significant improvement in shareholder remuneration. Thank you for your attention.

And now we can open the Q and A session. Thank you.

Speaker 4: Okay. Thank you so much. So if we are ready, we can start with the Q and A. I’d like to ask analysts to raise their hands. Please introduce yourself, name, family name and bank you represent.

Please, thank you.

Amol Patel, Analyst, UBS: You very much for the presentation. Amol Patel from UBS. Three questions for me, if I may. So first one being the EUR $225,000,000 EBITDA in FY 2025, this is certainly a little bit lower than the EUR $265,000,000 or so that was suggested in January, which is roughly where consensus is at. What explains the difference?

And has anything changed since then? Second question on free cash flow ’25. In the past, you’ve suggested around sort of CHF $230,000,000 to CHF $240,000,000. Can you provide any color on the building blocks there? If I look at Slide 32, you’ve got net debt at GBP135 million, which is an improvement of GBP130 million year over year.

If you then consider the dividend that you’ll pay of GBP147 million from results, that would imply a free cash flow around CHF $280,000,000 to CHF $290,000,000. Can you confirm ballpark, is this the range that we should consider? Or are there any other moving parts? And then the third question is on OpEx. So Slide 30, you have personnel costs and external costs forecast for 2025.

While in Figure 21, you have the 2024 number. And this shows OpEx increases of around 8% to 10% year over year in 2025. Why is this so much? And can you split out what proportion of this is wage inflation versus a number of FTEs and any other costs? Thank

Speaker 4: you. so much. Let me start with question number one. Now the resets of 2025 or, let’s say, twenty fourtwenty five. Well, we’ve always well, of course, it was impossible for us, I mean, to give you the numbers because the balance sheet wasn’t closed.

Anyway, the effect of the regulatory resets from one RP to another are very similar. So we have given some indications, I mean, to see what happened in 2021 during the reset RP3 versus RP2, okay? It was in 2019. If you check 2019, ’20 ’20 ’1 and 2024 values with the reset for 2025, again, these values are very similar, around EUR 80,000,000, okay, more or less. So well, have to say that, well, this is the first part of the answer or the explanation.

The second is, of course, we have to close the numbers of 2025. During the presentation, we said that the actual real makes the difference because the balances are calculated at the end. So at the end of 2025, we really want to be very straightforward on your answer. The balance was a little higher than what we thought we could have. So the amount sorry, 2024, of course, 2024, not 2025.

’20 ’20 ’5 is it’s a planned figure. So of course, I meant 2024. Okay. So basically, this justifies the difference. Second question, free cash flow, FCF ’25.

We said €1,000,000,000 free cash flow over this period. Now of course, this changes year after year. I don’t remember exactly the value, yes, it’s around the $240,000,000 This is maybe $20.25 of free cash flow. This is the value we also have in our minds. And as for the third question concerning our CapEx OpEx, yes.

Sorry, sorry. I forgot the question on the OpEx.

Moderator/Host, ENAV: Amal, can you please repeat question please?

Amol Patel, Analyst, UBS: So the third question on OpEx. So you have your 2024 OpEx. And if we look at 2025 OpEx, which you’ve projected, it shows an 8% to 10% increase year over year. Why is this so much? And can split out wage inflation versus the increase in FTEs and the different moving parts?

Thank you.

: Sorry, I got

Speaker 4: sorry, I had CapEx in my mind instead of OpEx, sorry. Now as for OpEx, you know that at the very beginning of the regulatory period, you know what happens. So the company is planning right now to have some developments, so higher costs in 2025 versus what we had foreseen or put in the 2024 total. So you know the regulatory mechanisms today. So basically, we confirm what we have always said in the past.

Okay. I hope I have answered the three questions. Thank you.

Carlos Caborasi, Analyst, Kepler: Carlos Caborasi from Kepler. I have a couple of questions, mostly clarifications. So for 2029, you’re guiding for $360,000,000 EBITDA. In January, the message was that it was going to be closer to ’23, ’20 ’4 levels. I’ve seen that you’re guiding for CHF 29,000,000 in cost savings, but what is the difference?

There was CHF 30,000,000 additional in EBITDA. And then the second, you’re getting CHF 100 something million in non regulated revenues for the I mean, last year, it was CHF 170,000,000, taking into account the inorganic part. Is that out of this calculation and this CHF106 million is mostly organic?

Speaker 4: Thank you for the question. Question number two, if you don’t mind. As for the non regulated markets, last year we talked about €100,000,000 and we confirmed it for 2029. We said the €70,000,000 that we would do on inorganic growth, so with possible M and As or possible acquisitions. Now the fact that during 2024 and until today, we haven’t done any closing on M and A operation.

Well, this means we are very serious, because last year, we told investors and we told the market that we closed operation only if operations meant value for our shareholders. So this means that ongoing negotiations, as I said during my speech, yes, we do have negotiations, but the foundations of negotiations are based on what I have just shared with you. So I do confirm €106,000,000 So we don’t base our developments and our capacity of making markets out of the regulated market on hypothesis. So today, I want to be here with actual data, which is 49,400,000 that you’ve seen this year, and this is the result, so the fruits of an extraordinary order portfolio. It doesn’t just represent the possibility of the company to deliver and to work internationally, but it also represents a clear signal of the capacity that the company has to do backlog.

So once again, we do backlog once again, and this means that we will be able to deliver in the future because we have something in our warehouses, so to say, much better than in 2024. In ’twenty four, we had to reorganize the company, and we have highlighted this kind of business because we think that on this, enough which is capped on the regulated market, we’ll be able to get satisfactory results. We sell excellence around the world, just like a few international players. First question, euros $360,000,000 EBITDA. Now the regulated market is capped.

I mean there’s a threshold, right? So what we tell you today with our numbers and negotiation with the European Commission is that the entire regulatory period is now moving on values and numbers, which are much, much bigger than the previous regulatory period. So if you believe in ENOV and if you have the guarantee to see a company which is highly structured or regulated market and on its core business, well, let’s say, you have to understand that in the next five years, the EBITDA volumes, the margin volumes, of course, will be bigger than what we did in the previous regulatory period. If you check the first year and if you check the reset of the balances, the resets of the tariffs, so you see lower margins versus the previous year of the previous regulatory period. Please don’t forget, ENAV is a company having a guarantee profile, which is very high.

So the regulated market helps us do so. In the COVID year, NNO had EUR 50,000,000 of profits. So when we talk about seriousness in terms of investments and infrastructure over five years, well, it’s difficult to find this type of companies on the market, I mean, strong as Enel is today. Good afternoon. Marco Limite from Barclays.

First question, the reset of €24,000,000 20 5 million euros that you have guided at around €70,000,000 Can you give us some color on the moving parts? There was a slide, I think it was Slide 27, so just some more color please on moving parts. This is question number one. Question number two is on the M and A strategy. So how far are you or how close are you to a possible acquisition?

And in terms of expectations within the €350,000,000 budget, should we expect just one acquisition for €300,000,000 or maybe 10 acquisitions worth €30,000,000 each? So if possible, some details about this. The third question is on shape and trajectory of the free cash flow from 25,000,000 to €29,000,000 Now 51,000,000 will benefit from the recovery of the balance. So free cash flows should go down to $20.29. So what is the amount of free cash flow you expect ’29?

And if you go over 2029, CEO talked about the 80% policy, so flat or stable even after 2029. Do we have the risk to have a dividend reset beyond 2029 because the 2029 dividend will take advantage of a balanced recovery? Thank you. Thank you so much. Question number one, the reset for 2025.

Can we go back to the slide anyway? You’re right, it was Slide ’27. Let me summarize it, the EUR $311,000,000 EBITDA in 2024. Okay, here we go, this is the right slide. So basically, have EUR 38,000,000, this is the resets of the mechanism due to traffic.

Now you know that we closed the year with a plus 4% traffic versus the tariff, so the performance plan. Within 2%, you have the deadband, so you have different benefits. So if it was negative, all of this would be paid by the company. So we have 2%, which is ours, and then all the rest up to 10%, so the remaining 2%. This is shared on a thirtyseventy basis with the market.

It means we are giving back 70%, while 30% is kept within the company as a proceed or income. So this mechanism also works the other way around. So if we go below versus the figures we planned, of course, we are covered by 70%. Then you have the cost of recovery, 10%. So 38% here means traffic.

Maybe you remember the three bullets, okay, traffic, cost efficiency and balance. Now in this case, we have traffic plus cost efficiency, which, of course, lost in the reset. So it’s basically traffic. While in the EUR 49,000,000 area, we have the balance reset. So this is exactly the balance of the year.

So this is the balance of the year that we have generated. I’m talking about generating balance, okay? I’m not talking about the tariffs. So these are the two different items. This is the balance we generate in the year, and it is paid or collected after two years, euros forty nine million of balance also helping us reach the result of the year.

At the same time, we will basically collect them in two years, which is the 2026 tariffs. So when you reset the figures at the very beginning of the regulatory period, this is traffic plus cost. Everything is aligned, including the balance of the inflation. All of this is aligned to the planned figures because this was done two months ago. You have to remember that the values are planned values.

All of this is aligned, okay? So balance is zero in that case. So in this case, we don’t have extra efficiencies. And this is the reason why in 2025, you can see the box on the top right. Well, this is to tell you, well, this is what we have planned, planned figures at the end of the year.

So upon closing the financial statements, we have to make sure whether or not we have generated extra traffic. And as of today, we have plus 1%. This is the average of Q1 versus 6.2% that we said before. So now we have 7.1% for the first three months of the year. So once again, we have 1% extra traffic.

So once again, we will include and even increase the proceeds of the income. And this is on top of the number you can see here. We will also have inflation balances and other types of balances. So once again, the regulatory system applies not only on the planned figures, which is what we have shared with the regulator, but in the financial statements, this may change. This is what the manager and director just said.

So of course, this fundamentally is so important that this is what we talked about in the previous debates and presentations. So this is the way you and we have to understand this slide. This is a reset on the planned figures. As for the final figures, we have to wait for six or seven months. So at the end of the year, there may be positive surprises versus the €225 you can see today, but this is too early to say.

As for the second question, M and A strategy and the unregulated or nonregulated market question. This is what I said last year. So we started from a concept that I’d like to repeat. Our company is a regulated company. So core business is absolutely fundamental and the guarantee is the beating heart of our company.

So we will never shift our attention from the regulated to the unregulated market too much. So during 2024, throughout 2024, we’ve been able to share and to show that the regulated market has incredible possibilities to grow for our company. This is what we do today by sharing with you very tangible concrete numbers. And this is to explain a growth that was basically an organic growth. We have basically shared the skills we have, the fact of implementing technology.

So basically, we have been able, I mean, to sell technology well around the world. Now I’m sure that this is absolutely what we have done. Our company is the most efficient service provider in Europe and one of the top providers in the So when ENAV, let’s say, moves around the world, well, we do this with an incredible extraordinary expertise and an incredible possibility to sell and to deliver, which is, again, extraordinary. Of course, throughout 2024, we had to reorganize our company so as to generate €100,000,000 organic growth that we talked about last year. And today, this is based on strong foundations, which is the €50,000,000 that we have collected in 2024.

As for operations, well, some markets are very interesting. We have a company, for example, in our group, the name is dFlight. Sixty percent is owned by Enova, forty percent is owned by Leonardo. This is the number one company in Europe to be certified for the management of drone space, some common information service provider. But this is also the first company it has been certified of UTM space.

So the possibility to carry out services in this kind of drone space. So this is a unique specific position held by a small company. I mean it’s Enough. So we are a public company. We are a listed company.

And this means we can step into markets that, in some cases, are so difficult for many other companies. So they may bump onto entry barriers. When we talk about the strategic infrastructures, the control in our jails and even top value added services. Well, we can do this because, of course, we are seeing that these markets are really, really booming. And shortly, I’m sure we will get into important operations.

So Enova will probably take over a small company. Well, of course, not just the one single EUR350 million operation, a smaller company that may be easily integrated with ENOV being able to carry out plenty of extra functions. This means that we will be able to offer high value added services, and they have very, very high margins. So the value for our shareholders is represented by the fact that being able to deliver, but at the same time, we have to carry out in-depth analysis. If I came here with an acquisition of a company within eight months, and some people said something like this, well, today, wouldn’t have done a positive service.

We do analysis all the time. Of course, we will sign when we know that the value of our company won’t be decreased, that we want to offer extra value, not less value. Last question on the dividends policy. Well, it shifts the attention. It’s very easy, it’s very simple, and it’s for a captive company like ours.

So we have to explain analysts that in the first year of the new regulatory period, margin level goes down. But as you said before, there’s a cash volume that comes from the balances of the previous regulatory period, and this is something we can put our hands on. The cap is 80%, and we will comply with it. And in the next five years, we will give you 80% of the free cash flow we will generate, the actual one. So it’s easy, it’s very clear.

We know what we will give to our investors and shareholders, and we are sure this will happen. And so of course, well, some people will replace us. There will be new Boards of Directors after hours. So they know that this policy can continue also in the future years, okay? So I really hope I have answered to all of your questions.

Now let me follow-up on the free cash flow FCF question. So as we just said, of course, we have to comply with our free cash flow generation curve. Of course, this is due to tariffs. So once again, we have shared with you planned figures. And of course, they do not include RP4 balance generation, okay?

So what you saw today is net of these balances. Of course, so far, it’s always been like this, so we think that the trend will continue. But starting from today, we have to see the final balances. You will see movements generated by regulatory balances. Today, we have a curve that’s going down when free cash flows of the previous year’s balances is set to zero.

Of course, I’m talking about 2027, so EUR $550,000,000 balance that we have to collect, but then something else will happen. So the dividends policy today is based on that free cash flow, and it is also based on the numbers that we can guarantee as of today. So the consequence is that the dividend policy, as we said before, is going up, but on the other side, the underlying flows will be redistributed so that we can absolutely comply with this growing, if you will, dividend policy. So the question is, what is the number? Well, of course, we don’t have any disclosure on the number, but we’re talking about cash conversion.

So cash conversion will be applied to the EBITDA. Maybe you can take into account 2029 EBITDA, so €360,000,000 Cash conversion will be around 40% to 45%. If you do the math, if you do the calculation, you can check your own FCF. The number is a big one because the company will reach those performance levels, which would be very big. So we won’t have any planned balance, but of course, the cash value that we will generate in 2019 will be so big.

And last but not least, we will also have other balances, I mean other regulatory mechanisms. Now in this case, of course, I cannot promise, but this may further increase volumes within 2029, okay? So this is the way you have to understand the acronym FCF, so the free cash flow, the way we described it today. Afternoon, Mr. Cochol in Tesa Sanpaolo.

The first question is on 2024. EBITDA went up by 3.4%. Back in March, if I’m not mistaken, last year, we were on a mid single digit, but traffic boomed, so plus 10%. So my question is, why could you increase the EBITDA so even better than the one you mentioned? Question number two, if at all possible, on the BP business spend.

CAGR of the regulated business is around 14%, if I’m not mistaken, and traffic is 2.9% CAGR. So can I have some color between I mean, on the difference between the two numbers, so why is there a delta or a gap? Question number three, I’d like to go back to the end of twenty twenty nine. So we will have RP5. Now I know we’re talking about RP4 today, but please make an effort and help us imagine, I mean, what may happen in 02/1930.

So EBITDA, euros $360,000,000 in 2029, there shouldn’t be any interference or any balance, as you said before, any accounting effect. So may I say that 02/1930 won’t show us a decrease of EBITDA, which is what’s happening right now? Or am I missing some unknown Fourth question on free cash flow. I made my own calculations, and I can see that the normalized free cash flow net of the balance is around EUR 140,000,000 to EUR 150,000,000. And so this is the end of the plan, let’s say, ’28 or even ’29.

Can you confirm these numbers, please? Thank you so much for your questions. So question number one, and if I’m not mistaken, it was on EBITDA, so the possibility we have to generate quite a good EBITDA in 2024. So you think that it didn’t go up a lot. Well, behind us, there’s something else.

I mean, there’s a big difference between proceeds on the one side and overheads on the other. So for example, just consider the European regulator or, for example, the, well, control or management center, they tell you that the traffic growth volume will have to be 6.5%. So you set the organization on 6.5%, maybe you do 2% more. But then you have to manage something like 400% bigger than what you thought. And of course, you have to increase costs or what basically management overheads.

Now I know this is a big material infrastructure, but don’t forget that there are men and women working behind infrastructures, and they have to do something so important. I mean they have to offer safety to the national space. So instead of having 1,900,000 flights, so when you have to manage 2,200,000 flights, well, the situation is so different and even a little bit complicated. So once again, no compromises on safety, but of course, the costs go up and margins go down as a consequence. Anyway, those values also have to take into account all what we presented to the network management.

I mean last year, for example, we have implemented a CapEx level that we had never seen before in ENAV. So this means we’ve implemented plenty of technology, guaranteed our platform. So the platform was able to manage I don’t want to be too technical, let’s say that the number of flights was much bigger. This is what we did at the March 2024, but the deadline was at the December ’25, so we did this eighteen months earlier. We did so because, of course, we wanted to see a positive result in 2024, but just consider France, Germany, Austria and many other countries, I mean, today, they do not respond in terms of efficiency, effectiveness and capacity.

They don’t know what to say to the network manager because once again, traffic is going up. So network managers come here. And in our country, what they find is the right tool, if you will, so that they let us or well, actually, they ask us to manage and to control more flights. So you can see costs here on 2024, but this is a plus considering the increases of margins that we will have right now in this new regulatory period RP. Once again, we are, let’s say, forward looking, okay?

I’m not just thinking of 2025, but I’m thinking of an organization that, of course, has to consider the regulated market flows. But at the same time, we’re thinking of the organization of our company considering the first two years of the regulatory period. You know what happens, those two years’ margins drop. So we do think that those margins will definitely increase also in the first two years of the next RP as compared to our statement. Question number two, Luca.

You have a question again on FCF, and I’m confirming what I just said. So €1,000,000,000 considering the RP, if you consider the balance effect, I do confirm this number. Now when I say full speed, of course, this is exactly what you said, so the last two years, and of course, it will be a little smaller in the first two years. As for the RP5, I’m thinking of 2,030 or 02/1931, well, it’s a long way ahead. And well, we have a slogan here in the company saying that, I mean, we are not sure, I mean, we will all be around the same table in six years anyway.

You have to consider the actual values that we have. You don’t have to consider the planned values. You have to consider efficiencies, the balances and traffic. So the better you perform, the higher the values that you’ve just seen, right? But then you have a reset.

And then during this reset, you lose a little chunk of the pie, right? So just consider the width of the pie that may be something like EUR 70,000,000 to 80,000,000. It may be a little bit more or a little bit less depending on balances, the real I mean actual numbers, okay? Am I missing one of your four questions? Some color please on the growth of the regulated, but also unregulated markets.

Once again, the forecast for 2029, you mean? Okay. Well, this is basically due to traffic or traffic only because well, traffic increase will help, of course, but we also have a tariff issue, if you will, that we have to take into account, which is also a beneficial element

: for us.

Speaker 4: Don’t forget, tariffs include planned costs on planned traffic, so the calculations we do are based on this kind of formula. Well, I know that this may sound a little difficult, but this is the only answer possible. Good afternoon. Alexandra Sarba from Equita. I have four questions, so some follow-up questions on what you already said.

So let me start from the €26 to €29,000,000 EBITDA. Now there’s striking difference, I mean, euros 140,000,000 from 2025 to 2029. So if we make, I mean, the previous comparison 2021, we start with the same EBITDA, but then we reach EUR 300,000,000, three 11. So this means 80,000,000, maybe 90,000,000. Now we have 140,000,000 gap.

So what about this gap, is this due to cost, Because if I consider P and L, I see plus 9% in 2025, then I see plus 1.5% for the other years. So our growth of the P and L costs lower than inflation. So in terms of employee costs, I mean wages, which is the most important slice for you, how can you do this? I mean costs increasing less than inflation, knowing that traffic will go up in the next years or so. So where will you get these efficiencies from?

Question number two. On RAB, so you said EUR824 million. Can you tell us about the is it on road, is it terminal, so Zone 1, Zone 2. RP2 in COVID was around EUR 1,200,000,000.0 total RAB, so EUR 1,000,000,000 on road and the rest terminal. Then some M and A, some CapEx.

So let’s say, we ate €100,000,000 If I set off with Zone 3, this is what I expected. So what is missing? So between the 1,200,000,000.0 and the EUR 800,000,000, which is where we lend it Question number three, on the dividend and the free cash flow beyond 2029. So if you consider what the CEO and the CFO told us, so you want to distribute at least 80% of free cash flow in 2029. This means that the 2,030 dividend would be around EUR 120,000,000, so EUR $0.02 2.

Is this sustainable? Can you please confirm this? Very last question, a technical one. What about or how much incentive you have in 2024? What about the estimates of bonus malas in 2025, ’20 ’20 ’9, please?

Okay. Let me start with the growth of costs of wages below planned inflation. And well, this is what I said before. I mean, this year, you must have seen that margins went down because costs went up. And they went up not only to face the traffic increase we experienced in 2024, but also because in the negotiations we have.

So in this kind of stream of dialogue that we have with other service providers, but also with the euro control and network managers, the estimates for the years to come were growing, growing traffic with the CAGR that you have seen before. So well, basically, we have to organize the company. And when you organize the company, well, you have to organize it in the right way, I mean, so that you can really face, if you will, peaks in those cases where you have peaks like 2024 with higher costs on the one side. But on the other side, you have to let new resources in. And maybe you want to strike a balance versus the controllers leaving and by implementing technology that always helps.

The plan is not just costs and incomes, but it is especially an investment plan. This means EUR 500,000,000.0 for the company for the next five years. How can we spend it? Well, we can change or replace our air traffic monitoring system, and we react before other service providers. So we will replace technology earlier.

This means, of course, we will have major savings, but also a better management of traffic and lowering wages. It doesn’t mean we will have less heads. I mean we will have lower costs, thanks to training processes. So we will introduce younger resources and we will reach the cost level that you can see inside the plan. So we don’t have to reduce costs because we have to increase margins.

I mean, of this is based on a serious plan that we have implemented throughout or after a year of hard work with the first lines of the company, with HR and then operations, I mean, all those who contributed to give us those numbers and to, I mean, tell us about the growth rates. For BM, now 2024 was very special. Inefficiencies in the European skies were absolutely dramatic. I mean, we closed with zero point six six minutes delay per flight manager, which is less than 0.07 we had last year. But of course, this has given us the possibility not to pay any penalties or fines.

And please, I’m not just talking about Italy, I’m really talking about the rest of Europe. At the same time, we could get the bonus because our bar is so high and so higher than the others because other countries have an average of one minute, while we have zero point zero seven minutes of delay per managed flight. So this means that overperforming is really, really difficult anyway. We talked to the network manager. We also talked with the Iacopo Prissinotti.

He is Italian and he is the European network manager today. We confirmed the fact that for 2026, we will offer the network manager a new strong space because technology will help us so much. So we invested a lot, I mean, to improve technology. So once again, the network manager will have the possibility to manage that kind of extra traffic that many other countries won’t be able to So this means that once again, the bar is so high on the bonus. And if I’m not mistaken, we have reached 0.14 because now we had to go through the reset.

So we started from yes, in 2024, we had the zero point one four minutes delayed per assisted flight. So we got the 0.066 this year. I’m sure next year, we will get a huge bonus. So the missing pieces, if you will, for 2024 help us for the margin in 2025, ’20 ’20 ’6, especially in the first two years because as we said before, and that reset hasn’t been really understood by the market. And this happened because we couldn’t unveil the numbers of being dealt with the commission when working on the performance

Strategy/Finance Team Member, ENAV: So talking about EBITDA 25.29, we are making reference to Page 31. We have two twenty five planned, two sixty one well, we have planned a higher traffic, EUR 130,000,000. So EUR 130,000,000 return for the traffic effect and tariffs and of all other factors, of course, so the combined effect. Non regulated segment will be increasing by two times, euros 54,000,000 returns more compared to the 2024 period. Euros 34,000,000 for the cost of staff will have an effect of the cost of staff.

But remember that we have many investments for technological projects and ACC approaches. So all these different initiatives will imply EUR 20,000,000 cost. We have less cost for staff because this project will help us having this sort of effect. So during the presentation, we mentioned that, so we should perceive this change also taking into account the optimization of staff costs in different centers. External costs, we have an effect of EUR 14,000,000.

So we get to EUR $361,000,000 as planned. Now talking about RAB, Page 26.

Moderator/Host, ENAV: That’s the

Strategy/Finance Team Member, ENAV: last or the part on the right of the slide. If we take a look at that, how should we read this slide? You know that RAB is regulatory RAB. So the regulator decides what kind of asset base should be included. This is called regulated asset base, RAB.

That’s why it’s called that way. Regulator decided that up until now, could be included into the calculation of RAB. From RP4 onwards, we can’t do that anymore. So using this balance or balance mechanism in order to cover costs was considered sufficient and important by the regulator in order not to increase the RAB with interest. So they basically we basically said that these are RAB as or forecast RAB.

This is defined at the beginning of the regulatory period in 2024. It was defined for 2024, it was defined in 2021 during the COVID period. And this twenty twenty five one was defined in 2023. So we have forecast. So for 2024, there were the projections of the balance as included in RP3, but according to 2021 values.

Of course, the actual number is very different, but this is not reset in the tariff. Please remember that our regulatory system wants RAB to be defined with values that change the WACC part, which is related to the cost of debt and debt part. That value is actually updated year on year on real values and near real costs of the company. So in order to summarize, we have included this value and this is the RAB that we’ve included in the tariff. And so the numbers and some figures may vary, but this €300,000,000 delta, the $3.00 €5,000,000 RAB is the forecast.

Please take into consideration that the net impact on the cost of capital, the average ROI and cost and the average cost of debt, which is a value, but we should it’s a value that we should always take into account that we should update that. We have an average WACC at 6.7, which is a value that entirely compensates the variation in the number of the RAB. So 2025 compared to 2024, we had an effect debt an effect a net effect of 2,200,000.0 So let’s start from this assumption. I should have answered all the questions, if I’m not mistaken. Dividend beyond 2029 of zero two two euros Yes.

So we’re talking about dividends in 02/1930. So for EUR $0.03 1 for EUR $0.03 0, we’ve said that we could maintain that level of dividends beyond 2029. We did that because this is a five year strategic plan and we want to, say, transfer the capability that we have right now to future leaders so that we will be able to continue on the same path that we’ve started. I have four or three questions rather. First one is the ideas of inflation included by the regulator and the range of inflation in which we can generate balance.

The second question is related to the bonuses should be included in 2025. And the third question on the levels that you the leverage level potential that you would consider optimal. What were your valuation? And if there are some model business models in which we can deviate from the reference points that you’ve included in your slide. Evaluations on the leverage potential of the company and maybe considering different business models if there’s some leeway in that.

Inflation. Inflation. As per regulation, we had to well, not only Italy, course, all member countries. We use the last available data whenever you draft the performance plan, the last available data of the International Monetary Fund for the reference country. So the reference number is the number or the figure of the International Monetary Fund for Italy.

That was, I think, October and November. When does balance trigger? So whenever there’s different value. With the cost base in tariffs, not the actual value, but the cost that we’re actually negotiated and included in the tariff. That is the reference.

For 2025 bonus, the answer is yes. We are confident that we will be able to get to the objective, that service provider companies are impacted by strikes in Europe. You know that. It’s better to be transparent and clear about this. So we have very high levels and very high rates of strikes.

In 2023, we didn’t have general strikes in ANAVA. I think this is a pretty positive factor. In reconstructing industrial policy and also of our industrial relationships go into that direction. So in order we want to

Pasqualino Monti, CEO, ENAV: ensure our

Strategy/Finance Team Member, ENAV: partners the recognition that they deserve in terms of bonuses. So the reconstruction of policies in relation to trade unions went to that direction. So on one hand, this allowed us to have a lower number of strikes. So having the possibility of telling to the market and telling to our investors that, listen, we won’t have strikes until the end of the year. And on the other hand, we were able to say that thanks to the constant dialogue that we have with the trade unions that we have solid agreements, solid deals, and we are sure that we will get to bonus values without any doubt.

So of course, there are some there’s still some uncertainty, and we can’t be 100% sure. But I believe that this is the direction that we’re going towards. And I think this is very much appreciated by the people that work in traffic control and this is also appreciated by companies and our clients, our main partner main clients. Second part about debt. Well, if I came here with three M and A operations presented to the Board of Directors, I would have had maybe an answer to the question.

I would say that we could use a part of debt in some other ways, but actually that’s not the case. We will be performing debt M and A because in the following five years, we’ll have a positive net position. So some debt is needed, but that doesn’t mean creating debt. It just mean having operations that are able to create and generate value for our shareholders. And over time and with the effort and commitment of our company, we will be working with those operations.

So debt is generated within the group. And since it’s a group debt, after the separation that we’ve done between regulated market and non regulated market, we’ll be putting a lot of care that debt is used in operation that are able to generate value for our shareholders.

Amol Patel, Analyst, UBS: You for allowing me the follow-up. I’m Al Patel from UBS again. So two further questions from my side. Union negotiations, when do they start? And and I guess, what is the risk that the union will ask for a very high wage inflation?

And then a second follow-up, if I may. There were some articles a while back speculating that the Italian government may be looking to sell down their stake. Has there been any commentary on this since? And can you provide any color further color here? Thank you.

Strategy/Finance Team Member, ENAV: Negotiations with trade unions on agreements for wages increases is discussed in the framework of trade union relations. So we do that constantly. The company is structured and organized in order to monitor these sort of activities constantly. And this ensures that, on one hand, we are able to have a direct connection between the headquarters and controllers so they don’t feel abandoned. They don’t feel alone and they’re aware that they are part of a team that works in order to strike deals that will help us have better performance compared to the past and that ensures the correct bonuses and remuneration for them.

Our structure and headquarters and also I deal with that directly, this is of course this makes us proud. So not having strikes and having an adjustment to salaries, having a whole mechanism that is able to strike agreements that are not related to abstract considerations but productivity values. So real values, this means that the higher their productivity, the higher the productivity for the company, the higher the marginality. There are some contracts renegotiations. We’ve taken that into account.

And in drafting our plan, we’ve taken into account the experience and the dialogues that we have undergoing with trade unions in Industrial Relations. So we are well aware that the numbers are reflected in the trend of costs for the following five years. We have put a lot of care in this because recently, we’ve had processes in which costs have fluctuated a lot. So reorganizing our company entailed this operation. So right now, operations and HR are in constant dialogue.

They’re able to find solutions. And in their relationships with trade unions, we are able to get to excellent results. This actually, I don’t know. We should ask our majority shareholder, our government. I don’t know if they’ll be interested in selling out their participation to the company.

But whether that’s the case, I’m sure they’ll tell us. So I don’t really know what to answer here. I have a question related to cost. In the past, there was slide about cost for RP. We have closed 2024 with EUR $689,000,000 in determined cost nominally.

What is the starting point for 2025? And where we’ll be going towards 2029? And then a second question, you were talking about leverage. You were talking about €350,000,000 for potential M and A. So if we won’t have that total M and A, will this value be distributable as dividend?

Okay. It’s true that we didn’t provide that detail. Just I’m answering the first question. So we’re talking about figures for twenty five, twenty twenty nine. Historically, we would give visibility only to determined cost, but we didn’t give visibility to our industrial plan.

This is the first plan that together with Pasqualein, we decided to present industrial plan with some details on figures differently from what happened in the past. We preferred giving you the data related to result instead of some intermediate results that wouldn’t help you get to the final number that you’d need. The commission still needs to approve the whole thing and we’ll maybe give you some more details in the future.

Moderator/Host, ENAV: UNIDENTIFIED

Strategy/Finance Team Member, ENAV: The second question, well, we have structured the dividend policy that is very clear. The pillars are well defined. So creating more debt in order to distribute more dividend, this is not something that we want to do. This is not a policy of the company. We want to create to generate debt to have more marginality to upgrade our results so that we can maybe improve the dividend that we’ve established.

Of course, if things fare better, we might think about that, but not with that, not with the unspent part of debt. I have a few questions. One about the European Commission. Is it possible the European Commission won’t approve the plan? And the second question on traffic being funneled into our countries in the view of the inability of neighboring countries to manage volumes.

What would be the upside in that case? And that’s it. Thank you very much. On the first question,

Pasqualino Monti, CEO, ENAV: we

Strategy/Finance Team Member, ENAV: are going to wait for the European Commission to take stock with all the member countries. Having an official approval on the plan is, of course, a very positive element, and it makes us proud. Not because all the member countries are still struggling, but because our plan is well structured and the European Commission didn’t have any objection over on our plan. The regulator is the people with the person interacting with the commission on the approval of performance plan. The second question, I’m sorry.

Yes, the second question. Well, the dialogue that we had with the network manager goes into this direction. We work with technology. So we have worked in Roma, Milan in 2024. We have worked on technology and we have improved the capability of our skies.

So together with Spain and Greece, because, of course, alone, we can’t do much. Together with these countries, we ensure a level of capability that is able to allow the network manager to shift traffic when in summer, as expected, maybe other countries will be struggling. We’ll not be happy, of course, if other countries will be struggling because we the direction probably in the future will be having a common airspace in the European Union. So we want all the member countries to be aligned to the performance of our company. That said, we are ready to receive from the network manager this year, next year and in 2027, a higher level of traffic because we were good enough as to improve the capabilities of our Sky and our Space.

Thank you. We just have time for one more question. You have provided a very clear guidance for dividends between 2529%. You’ve also said that there might be an upside from non regulated growth, M and A. The upside on free cash flow and EBITDA, could it become an upside on dividend?

Or will it be stable on the figures mentioned in the plan? Well, again, since we want to have great balance between our figures, of course, as I’ve said earlier, and as we all hope, if this upgrade will produce higher marginalities, we might want to review dividends on the upside. Higher values compared to what we have mentioned, but I’ve already said that to your colleague. Very good. Thank you.

This will be the end of the Q and A session. We’ve also received some questions from the webcast. We have received them. Some of them are addressed to Felice, and they all focus on the Digital Academy. Some questions ask about more details about the initiative and what are the priorities and the positive effects that we are expecting.

Good afternoon to everybody. Well, the Digital Academy was created as a project related to the Academy in Forli. This is an excellent center for training in which air and traffic controllers are trained and other professionals that are critical in the management of air and space. The objectives of the Academy are two: Firstly, improving cost efficiency in training. This is good news in terms of cost efficiency.

Again, the other objective of the digital academy is that of transforming the real academy into e platform that we can export abroad. We have identified some foreign countries, India, Saudi, The Emirates and Brazil and South Africa, in which we want to explore this platform for specific reasons because these countries, an infrastructural standpoint are growing in triple digit. So just to give you some figures, we are expecting €300,000,000,000 in investments in India for the construction of new airports. This is related to the need of tapping the potential of these countries. And our academy and the digital academy specifically is aimed at tapping this potential, and we want to scale it up in order to take it to a foreign market.

There are also African countries that are particularly receptive on this topic. So the human capital is at the very center of our policies, as our CEO was saying, because air traffic control are critical. They cannot be replaced. And we believe that innovation policies and the introduction of artificial intelligence elements or agents might provide added value and the platform is the result of this journey that we’ve just started. And we will be having a presentation of the platform of the Digital Academy.

There is great international interest for this. As Felicia was saying, we’re very happy about this product. We will be introducing the project, and we will be providing you with every detail very soon because we are sure that this will provide added value on the non regulated market. In Qatar, we have trained air traffic controllers a few years ago. We have done that into our academy in Farley.

This is an excellence center of excellence recognized all over the world, not only in Europe. So enlarging our offer, widening our offer in terms of training is for us real plus in terms of increasing marginality for our group.

Moderator/Host, ENAV: Okay. I’ll switch back to English just to say thank you to all of the people connected to the webcast. Thank you of course to the people here to the press which is following. Thanks for the presentation to the management, CEO, CFO and the Director of Strategy. The IR team is obviously available to you for any follow-up you might need questions.

And again, thank you. Thank you again.

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