Good afternoon, this is the Chorus Call conference operator. Welcome, and thank you for joining the ENAV First Half 2024 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Daniele Tutino, Head of Investor Relations. Please go ahead, sir. Good afternoon, everybody, and thank you for joining us today on our First Half 2024 Results Conference Call. I'm Daniele Tutino, Head of Investor Relations. Today, our CEO, Pasqualino Monti, will take you through our progress during the first half of this year, and then our CFO, Luca Colman, will cover in more detail the financial results. We will then welcome your questions. With this, I will now hand over to our CEO, Pasqualino Monti. Thanks, Daniele, and good afternoon, everybody. Thank you for taking the time to join us today. Let's start with the key points about our First Half results and our recent progress. We have delivered a solid performance in the First Half, and we are very pleased with the strong set of results delivered. We have built faster on our good start to the year. The excellent traffic performance is continuing month after month. We are seeing a widespread increase in travel demand, boosting the traffic trend in this first part of the year. We are providing our services with our usual strong commitment, guaranteeing the highest levels of safety and quality. In the first six months of this year, the number of flights managed by ENAV recorded an increase exceeding the double-digit growth from en- route traffic, which was up 10.2% compared to the first half of 2023, and that's +9.3% year-on-year for terminal traffic. This strong performance confirms the role of Italy as a top touristic destination. Benefits have also arisen from the lowering of the limit of the Free Route Airspace across the entire Italian airspace. As you know, ENAV is the only European service provider which has reduced the altitude from 9,000 to 6,500 meters, almost two years, in advance of the deadline set at the European level, December 2025. Thanks to this lower limit, even domestic flights will benefit even more in terms of fuel savings and lower CO2 emissions. This determines benefits for the airlines themselves, optimizing flight times, planning, and operating costs. The strong increase in flights led to a strong growth of service units, with en- route traffic exceeding 5.2 million service units in the first half of 2024, up 10.9% versus the first half of 2023. This result in Italy was higher than the Eurocontrol member states, where the figure at the end of the first half of 2024 was up 8.5% compared to 2023. Also, terminal traffic showed a strong growth, and it was up 11.5%, exceeding 500,000 service units. Let me also provide you some key figures for the first half of 2024. Total revenues were EUR 461.3 million, up 5.7% compared to the first half of 2023, due to the performance of the core business driven by the strong increase in traffic that I have just commented. Profitability increased as well, with EBITDA up 5.5% to EUR 99.9 million, and with a strong margin at 21.6%. Below the line, EBIT stood at EUR 42.7 million, up about 30% year-on-year. We are seeing strong progresses at the bottom line, exceeding a 25% increase compared to the first half of 2023, as net results stood at EUR 23 million compared to the EUR 18.4 million of the first half of 2023. In terms of CapEx, the amount in the first half accounted for EUR 35 million, and it increased by 15% compared to the first six months of 2023. Net debt accounted for EUR 424 million, and the increase versus the end of 2023 is mainly due to the dividend payment in May. We are still confirming a solid leverage, with the ratio net debt/EBITDA at 1.4 times. Free cash flow stood at EUR 28.3 million, with a strong increase versus the first six months of 2023, when it was negative for EUR 3.2 million. Before showing you more in depth all these strong results, let me briefly provide you an update on the latest progress about both regulated and non-regulated business. In terms of regulation, as you know, the current Italian Performance Plan will be valid up to the end of this year, and we are now under negotiations with the regulator for the next regulatory period that will cover 2025-2029. The latest news refers to the publication by the European Commission of the Union-wide performance targets related to the RP4. In particular, the efficiency targets for en- route services for each year from 2025 to 2029 were defined equal to an annual variation of 1.2% minus 1.2% of the determined unit costs. On the back of this target, we are currently working on the Performance Plan, which will be submitted to the European Commission by the beginning of October. After the review, the plan and the main elements of the tariff are expected to be approved by the end of this year or the beginning of 2025. We are working hard also in the non-regulated business, and we have been awarded with significant contracts around the world, in particular in Kosovo, Cambodia, Libya, Kenya, Croatia, Romania, Dominican Republic, Fiji, and Tunisia. A couple of weeks ago, we announced an important contract for Sigonella Military Airport for the supply, installation, and commissioning of a new radar for air traffic surveillance carried out by the Italian Air Force. These latest contracts confirm that the strategy we are pursuing to increase our exposure in the non-regulated market is being fruited, and we are fully reconfirming the double-digit growth expected in 2024 for non-regulated revenues, as set in 2024 outlook already disclosed to the market. With this, I want to hand over to Luca to run through the first half traffic performance. Thank you, Pasqualino, and good afternoon, everybody. It's a pleasure for me to show you the strong progress we had in our traffic during the first six months of this year. Starting from en- route traffic, service units were about 5.2 million, up 10.9% year-on-year, driven by a solid increase in international and overflight traffic, which flew 17.9% and 10.2%, respectively. National traffic recorded an almost stable performance at minus 0.6% year-on-year. In the chart on the left, you can easily recognize the typical seasonality of our business, with the second and third quarter traffic being the highest contributors. This year, en- route second quarter traffic volumes were up 12.5% versus 2023. In terms of mix in the pie chart, you can see as national traffic accounts for 17%, international accounts for 41%, and overflight traffic, which is the most profitable for us, accounts for 42%. Here, the performance was driven by an increase of European-Asia connections and inter-European flights. With regard to airlines, in the first half of 2024, flight activity in the low-cost segment remained central to the volume of air traffic produced in Italian airspace, with Ryanair, Wizz Air, and easyJet with significant performances. Among traditional carriers, increases were recorded among Middle Eastern companies such as Qatar Airways and Turkish Airlines. While between the main European companies, Lufthansa and the national carrier, ITA Airways, also posted significant results in terms of volumes produced. This positive traffic trend is progressing with an impressive tenor, as confirmed by the number of flights in July, which is up 7.9% compared to July 2023. Now let's see the performance of terminal traffic. Also, terminal traffic had a very positive performance. Service units grew by 11.5% year-on-year, showing a generally positive trend throughout all three charging zones. More in detail, Zone 1 is up 27.2%, with a strong increase as its recovery in the post-pandemic period was slower than the other two zones. Very good performance in the first half for Zone 2, up 8.6%, and Zone 3 up 6.8%. The traffic growth was continuous and consistent in this quarter, and the second quarter terminal volume was up 12.3% compared to 2023. In terms of destination, the international component representing 67% of the total traffic increased by approximately 16%, while the residual 33% related to the national traffic grew by 3.7%. And now let's move to the first half key group metrics. First of all, let's see the performance of revenues. In the first half of 2024, revenues were up nearly EUR 25 million year-on-year, standing at EUR 461.3 million, with a strong increase of 5.7%. This is driven by a solid performance in traffic volume for both en- route revenues, which are up 5.8% year-on-year, and terminal revenues, up 10.6% year-on-year. We have already discussed about the strong traffic performance of this period, so let's have a look at the other components of the revenues. Moving now to the balance. You can see in the first half of 2024, the balance at negative EUR 25.3 million, slightly below last year, due to the following elements. First of all, the balance accrued in the period of positive EUR 22.6 million, coming from EUR 25.9 million balance related to inflation, which reflects the inflation increase compared to the forecast figure reported in the Performance Plan. EUR 4.2 million balance for Charging Zone 3 related to the Cost Recovery Mechanism. 3.7 million balance due to the Traffic Risk Mechanism having generated in the period a higher level of service units than the forecast figure. Then EUR 3.8 million related to other minor balance components. In the first month of 2024, we also accounted the balance reversal of minus EUR 47.9 million, mainly related to the second tranche of the balance accrued in 2020-2021 and cashed in throughout this year tariffs. Moving to non-regulated revenues, in the right chart of the slide, you can see the evolution of the non-regulated revenues accounting for EUR 15 million in the first half of 2024. The difference with the first half of 2023 is mainly due to the contribution from the activities performed in Qatar related to the performance of air navigation support service in 2023. As I commented by our CEO before, in the previous slide, we are working hard on the not regulated business. We have been awarded with several contracts around the world, and we are now building our backlog. As Pasqualino said before, in the first half of 2024, the not regulated revenues benefited from the contribution of an important contract. Just like the supply of a new air traffic management system in Kosovo and Cambodia, the modernization of installation of a system at Romania, sorry, at the Libyan airport, the control activities of radio assistance systems installed in airports in Kenya, Croatia, and Romania, the transition project to the aeronautical information management for the Dominican Republic, and then various maintenance projects for software products supplied to customers on a global scale. So very a lot of things. And now let's see the cost evolution during the first half of 2024. Total operating costs accounted for EUR 361.4 million and were up 5.7%. As you can imagine, this is mainly due to the increase in personnel costs in response to the high volume of traffic managed in the period. Staff costs, in fact, was up 6.1%, mainly for these reasons. More in detail, the increase in variable remuneration for EUR 6.7 million year-on-year is mostly due to the flexibility and overtime allowance for air traffic operators to manage traffic peaks. Also, the fixed components of the remuneration were up EUR 5.3 million, mainly due to the renewal of the labor contract happening in September 2023, and to the increase of the headcount for 60 average units at the group level, primarily controllers and technicians. The social security contribution, which grew by EUR 3.4 million compared to the first half of 2023, due to the above-mentioned increase. And then the other operating expenses. The line increased by 3.2%, equal to EUR 2.5 million, mainly due to the maintenance costs and professional services that were partially offset by reduction in energy costs. Then the last line, the capitalized internal works related to group personal activities and investment projects are almost stable compared to the first half of 2023. Now let's see the below-the-line items. The comments provided for the top line and the cost evolution led to an EBITDA that stood at EUR 99.9 million in the first half of 2024, reporting a 5.5% increase year-on-year, benefiting from the strong traffic volume reported in the period and only partially offset by the related increase of personal costs. EBIT stood substantially in line year-on-year, while provisions and write-offs decreased by EUR 3.7 million, benefiting from the lower write-off of receivables compared to the first half of 2023. The release of provisions accrued at the end of 2023 due to the closing of some litigations. As a result of this, EBITDA was at EUR 42.7 million, up about EUR 10 million, and with a 30% improvement compared to the first half of 2023. Moving down to net financial expenses, amounting to EUR 4.5 million in the first half, decreased by 32% due to the higher financial income on deposits and from the balance actualization mechanism that was partially offset by the impact of rising interest rates. Current and deferred taxation overall amounted to EUR 15.3 million due to higher taxable income and impact of deferred taxation. On the bottom line, stood at EUR 23 million, up 25% year-on-year, reflecting the spending performance of this period. Moving on to cash flows. Let me now briefly update you on the liquidity and financial position, which, as you can see, remained very strong. We ended the first half of 2024 with EUR 200 million of cash, with additional undrawn credit line for EUR 199 million, after which 150 are committed, along with a loan commitment of residual EUR 80 million related to the EIB financing signed in October 2023 for an original amount of EUR 160 million. Net financial debt stood at EUR 424 million, increased by about EUR 100 million compared with the net debt at the end of 2023 of EUR 322 million, mainly due to the payment of dividends for EUR 124.4 million in May 2024 and partially offset by the cash generation of the period. Now let's look at the free cash flow that stood at EUR 28.3 million. I remember that it was -EUR 3.3 million in the first quarter of 2023, and it's mainly driven by net cash in from operation of EUR 66.8 million, equal to EUR 29.5 million in the first quarter of 2023, which increased of EUR 37.3 million compared to the first half of 2023. We have a cash out for EUR 38.8 million related to the CapEx. As a result of these changes, net debt on EBITDA ratio stood at 1.4 times, slight increase compared with the ratio at the end of 2023 that was 1.07 times. It remains still solid and strong. Before moving to your questions, let me now conclude that ENAV today is acting in a favorable environment, driven by a solid traffic perspective. Our disciplined approach, coupled with our use of strong commitments, which guarantees the highest level of safety and quality, will continue. On the back of these results achieved in this quarter, we confirm our 2024 outlook. Thanks for your attention. Now let's move to your questions. Thank you. This is the Chorus Call operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Carlos Carbonero of Kepler Cheuvreux. Hi, everyone. Thank you for the presentation and for taking my questions. I just have two quick ones. The first one is related to the non-regulated activities. Considering that H1 revenues stand EUR 3 million below 2023's level, where would you expect to close the year without any further M&A or new contracts? And my second question is on traffic. And I was wondering if you could shed some light on your second half and 2025 expectations. I'll leave it there. Thank you. Excuse me, Carlos. We didn't hear the second question. Can you please repeat just the second question? Yes, sure. On traffic, if you could give us your expectations for the second half of the year and for 2025. Okay. So I will answer first the second question. For what concerns the traffic, right now we are managing a level of traffic that, as you have seen in the presentation, is about 11% in terms of service units. Right now, the traffic is around 8% in July in terms of flight, not in terms of service units. Service unit normally is at least one percentage point more. So still, this value. At the moment, we believe this could be a value that could be reached by the end of this year. We prefer to expect the end of the summer season to be more precise about the traffic, I mean, the final 2024 traffic level. Also, because now we are still recording very high level of traffic coming from the Balkans. They're moving towards us, and this is something that we're managing yesterday with the operative areas. Now, for this reason, we will beat definitely the forecast given to Italy by Eurocontrol. But we prefer, as I said, to wait to the end of the summer season, so wait to September to confirm or increase our 2024 traffic flow. Okay. On the first question, the difference with the first half of 2023 is mainly due to the contribution from the activities performed in Qatar related to the performance of air navigation support services in 2023. Now we are working hard on the non-regulated business. We have been awarded with several contracts around the world, and we are now building the new order backlog. In the first half of 2024, the non-regulated revenues benefited from the contribution of important contracts, just like the supply of a new air traffic management system in Kosovo and Cambodia, the modernization and installation of systems at Libyan airports, the control activities of radio assistance systems installed at airports in Kenya, Croatia, and Romania, the transition project to the AIM, Aeronautical Information Management, for the Dominican Republic, and various maintenance projects for software products supplied to customers on a global scale. These latest contracts confirm that the strategy we are pursuing to increase our exposure in the non-regulated market is bearing fruits. We are fully reconfirming the double-digit growth expected in 2024 for non-regulated revenues. As I said, in 2024, our outlook is already disclosed to the market. Okay. Understood. Thank you. The next question is from John Campbell of Bank of America. Hi. Good afternoon. Thanks for taking my questions. I've got two, if I can. So if I start looking at your tax expense, it almost doubled essentially year-on-year. And I was reading the notes you talk about a deferred tax impact. So perhaps could you give some clarity on sort of why the tax expense has grown in this period so much year-on-year and what's behind that deferred tax? The second question I had related to your employee expenses. So I think the fixed component of labor cost is quite well understood, but there has also been, of course, a growth in variable employee remuneration. How much of that is a case of traffic volumes being higher? And is there any pay increase reflected in those numbers as well? Have you had to give a higher flexibility allowance for your air traffic controllers? Thank you. Okay. Thank you for your questions. Okay. I'll start with the second one. As you can imagine, most of, I mean, all the traffic that we are managing really is a very important volume. If we look at the volume of traffic we are managing now, it's not only higher than last year, but it was even much, much higher than 2019. That was our record before the COVID. So the point is to be able to manage as better as we can in a safety and quality environment all this traffic. So we are having a lot of pressure on the people, our controllers. What our CEO is doing now is pushing productivity, trying to work on the flexibility on the work. And that's what we are in some way registering, even in the cost side. If you look at the variable part of the cost is increasing, that is good when the traffic is very high like now. That means that we have tried to manage the peak with the variable part of the cost while the traffic will cool down a bit or not in the summer season. The level of traffic will be lower. We will be able to reduce the variable part of the cost. So I guess we believe this is a good approach. And that's the reason why, actually, we are doing this performance, EBITDA performance in the first quarter of 2024, just because the relation between the cost, the increase of traffic, sorry, and revenue, and the increase of cost are still positive for us. Say that for what concerns the tax instead. For what concerns the tax, normally our tax rate is around 30%, as you said, as you probably know. What's happened in this semester, I mean, these six months, is related to the fact that we had an increase that was related mainly to two things. The first one is higher taxable income, and that's a good thing, actually. And the second one is related to the deferred taxation. And I would underline two things about this. The first one is the reversal of provision of first half of 2024. This will kind of free up some revenue that were some provisions, sorry, that were taxed, actually. And then with the reversal of the balance actualization, that's another point that increases the tax, yeah, the volume, actually. Did I answer your question? Thank you. Could I just maybe get just a clarification on the first question? So when we think about this variable employee remuneration, and correct me if I'm wrong, but is this the increase in that variable remuneration, is that all from traffic volume, or is there an element of you're paying people more as well? So is it all volume, or is there a mix between volume and pay? Thank you. I would say both of them because to increase the productivity, as I said before, the flexibility of the work, we had to touch the labor contract, introducing this flexibility. That flexibility allowed us to use people out of the normal period of working, anticipating or posticipating their regular time. And this is kind of as a cost. On the other side, most of this is relating to most of the cost is related instead to the extra time that we are paying to manage the traffic. So both of the components are impacting the variable part of the cost. Thank you. Thanks. The next question is from Aleksandra Arsova of Equita. Hi. Good afternoon. Thank you for taking my questions. A couple of my side. The first one is maybe again on the outlook. You mentioned that maybe after the summer season, you will increase the guidance on traffic. So I was wondering if this will also imply and potentially increase in the guidance on EBITDA is the first one. The second one is on regulation. You basically confirmed that you will send the individual Performance Plan during the fall. So since currently we're seeing some airlines downgrading their guidances for the year, and also the macro is worsening. So do you see a change in the negotiations with regulator, making it maybe more difficult for you to negotiate a higher tariff? So maybe some color on this. Thank you. Yeah. I understand what your question is for. Let me see. Yeah. We believe that the negotiation will be not easy, but this doesn't mean that we will not be able to bring home what is within the target that has been given to us to reach the performance that is asked. So from one side, targets have been set. Let me say the only point I would now underline in the negotiation is the pressure that all the European navigation service providers are having in managing more traffic and to connect this with the cost level. This probably would be not the issue, I say, the item of discussion at the European level for the next regulatory period. I don't see in this moment extra pressure from the airline. They always put pressure. This is their job when we do the Performance Plan. But actually, in this moment, we don't foresee any extra pressure on this. For what concerns the guidance, just a second. Okay. On the second. On the first question on the guidance. As you may have seen, we have delivered a solid performance in the first half of 2024, mainly driven by the strong traffic evolution that is continuing month after month. And the summer period will be crucial to better understand the path to the end of the year. So we decided to wait until the next quarter, and then we will decide about it. Okay. Thank you. The next question is from Cristian Nedelcu of UBS. Hi. Thank you very much for taking my questions. The first one, can you give us some color on the Middle East exposure? In the case of further geopolitical escalation there, how do you see the impact on your overflight traffic? And the second question on the Lufthansa-ITA deal. We've seen comments from Lufthansa to significantly increase the number of wide bodies stationed in Rome versus the current levels at ITA. So how do you think, and give us a bit of color, how do you think are the potential implications here for traffic for the next few years? And lastly, just coming back to the staff cost, the personnel cost. I mean, Ryanair talked recently about air traffic control delays intensifying through Europe due to shortages of labor. So just simplistically, how should you think about your Q3 personnel cost growth year-over-year? Is it at similar levels in the first half, or should it increase? You should increase the cost more to reflect the peak season and the pressure on the network. Thank you. For what concerns the Italian Lufthansa deal, we are happy of this, actually, because everything could be a chance to increase our traffic for us is good. So we don't have any at the moment update on this in terms of potential traffic that could increase. But the sound is good, and we definitely believe that could be a good thing. So we will see in the next few months what will happen. But as I said, the feeling is positive. For what concerns the Middle East, at the moment, we don't foresee particular, I mean, problem for us in the term that we don't have actually big exposure on this versus these countries in the regulated and then not the regulated business. So personally, we believe that no big impact. In terms of traffic, as you normally know, when there is a problem with the state, there is a flight and some, I mean, they don't overflight the state to pass next to the state. But this has happened actually far away from us. So probably we don't think that at the moment we could have important impact on if something happened in that area. Let me just check the third question. The cost evolution. The cost evolution for what concerns the. Okay. I leave the floor to Pasqualino for the staff cost evolution. In the first half of 2024, total operating costs accounted for EUR 361.4 million, and we're up 5.7%. As you can imagine, this is mainly due to the increase in personal costs in response to the high volume of traffic managed in this period. Staff cost, in fact, was up 60.1% mainly for this reason. For what concerns personnel costs, yeah, for the rest of the year, we expect a total increase due to the high volume to be managed, but less proportional if compared to the effect of that on the top line. Thank you very much. May I add just a quick follow-up question? If I look at your overflight service units, which I believe are 25% higher versus 2019 levels, so this seems to have increased more than the international flights or domestic service units. Could I just confirm what has been driving this strong growth in overflight versus the rest of the segments, and how do you expect this to evolve over the next couple of years? Thank you. I would say mainly two things. First, the quality of service that we give. I mean, as we said during the call, there's a lot of problem of delay problem, pressure on the delay on the Europe airspace. So we are still, let's say, one of the best performers in Europe, and this is the reason why a lot of traffic, above all during the summer when there are pressure on some other countries next to us, they prefer to pass through us. And this is good from one side, but from the other side, actually, the increased complexity to manage all this volume of traffic. That's the reason why sorry, and there's another reason also. We just lowered the free route from 9,000 meters to 6,500 meters. And this is another important thing that we did, actually the only in Europe at this moment, that makes the overflight pass through Italy easier and much easier than other countries. So if you put these two things together, you can understand why the overflight is increasing so much. I mean, so much. That's mainly the two things. Thank you very much. The next question is from Marco Limite of Barclays. Hi. Good afternoon. Thanks for taking my question. I've got two questions on regulation. So first of all, I appreciate the European Commission has published the cost efficiency targets. But is there any initiative going on at European level in order to, let's say, significantly improve operational efficiency and disruption going forward? This is the first question. Second question. Clearly, the cost efficiency targets have been set, but there are still a number of other key drivers to be discussed. When should we expect in terms of timing, for example, to know a bit more around, for example, around CapEx or cost of capital? The third question is a bit more technical. In Q1, the Balance Reversal was fairly small, while in Q2, now we have booked a pretty sizable amount of Balance Reversal from the pandemic periods. Can you just explain how the accounting of that works? Thank you. Okay. I just answered to the last question. From my point of view, the Balance Reversal of the Q you asked what's the difference between the Balance Reversal of Q sorry, 2023 and 2024, actually, first quarter, right? First half, right? Between Q1 and Q2 of 2024. Yes. Okay. Perfect. I just go straight into this answer. Let me just take my paper somewhere. Too many. Don't prepare for such a long time. Okay. Let me check this. Okay. Because in my mind, I was quite right. The Balance Reversal in 2000, it was actually quite similar. But I remember this because we had EUR 45.7 million Balance Reversal last year last half, and EUR 47.9 million. So the difference is more or less EUR 2 million of difference. So the reversal is more or less the same one because, as I said, the main impact was related to the 2020, 2021 traffic balance. So actually, I don't know if I answered your question. There was something else about the balance, and then we can move to the other question. Is more like my question was in Q1. The Balance Reversal. Yeah. Balance Reversal was very small. Now, yeah, first half is much larger. Yeah. Okay. I guess what's your question? What's happened actually in Q1 other than Q2? The main difference between these two Qs are related to the fact that this year, in 2024, we recorded the inflation started from Q1. Instead, last year, in 2023, Q1 didn't have any inflation balance. The reason was mainly related to the fact that once as the inflation was very low, we usually start to put from the first half ahead the impact of the inflation. Started from, let me say, this year, I would say, yes, this year, as the impact is quite important, we prefer just to bring it directly to the first quarter. That's the reason why you find this difference between Q1 and Q2 in terms of balance inflation. If you look at. Okay. That's it. Then the other one was kind of forgot, sorry, the other two questions. The first one maybe. Balance reversal. Sorry. Can you, Marco, repeat the first and second question because I was on the paper? My first question was quite generic at the industry level, but clearly, there has been a lot of disruption for air traffic control in Europe. So I'm just wondering whether while you are having your discussions for the next Performance Plan, whether there are proper incentives that have been put in place or new incentives to improve operational efficiencies across Europe. Yeah. You got one of the points of the discussion because before setting the target, actually, there was a lot of pressure from the IATA towards the European Commission about how they're going to set this target. One of the reasons, one of the items of discussion was actually exactly what you said, and was related to the fact that there was a capacity target. There was a lot of pressure on delays, as you said. And so there was a very strong discussion to push the Commission to ask for a better balance between cost efficiency and capacity. And that is one of the reasons why actually the target, when it was set at 1.2%, some states were not so happy about this and still are not. I cannot say anything more about other countries about this item, but this is actually one item, one point. In the same decision, when the European Commission set in July the cost efficiency, they have set also the guidelines for the capacity that at the European level they want to reach. Now, this capacity target is in some way bracketed down to each country. But this is something that the single national authority is doing directly with the service provider. But the target has been set in the same moment that the cost efficiency target at the European level was set at the same time that it was set the cost efficiency target. For what concerns the other two areas, the safety is paramount. There is a target, but there's not any performance on any bonus or malus on this. And the other one is the environment. The KPI that was set is considered by most of the states not mature. And so the European Commission, as it was the first time they set actually a real target, but there are still some problems to be applied. It's very technical. Then if you want in a direct call, we can actually go through this point. But in general, the point is the state, most of the states prefer not to have a bonus malus target on this environment target. So the target will be given. It's given. But actually, each state can decide, every national authority can decide to put a bonus or malus on this target or not. For what concerns us, at the moment, we are not going to do this. Did I answer your question? Sure. Can I just clarify? Sorry for taking too much of the time, but just to confirm, there is no new bonus malus mechanism in order to incentivize quality? Or, for example, is there an incentive on getting to the capacity target, or has that not been defined yet? Thank you. Okay. No. For what concerns, the capacity target is one that where exactly as it was in the other RP. So target will be set, bonus and malus, and the mechanism of bonus malus that will be set by each state and agreed with the national authority and with the European Commission at a level that could be very close to RP3 mechanism, very close mechanism, similar mechanism. So you should think that a bonus malus on a capacity or quality, as you want to call it, will be set. But this is the really national one, not as a cost efficiency that the cost efficiency is common for European countries. The quality, so the delay, the capacity target will be set by each state directly with the national authority according with the European Commission. But this is a process that is ongoing now. It will be set in the Performance Plan that will be submitted in October, yes, early October. Thank you very much. You're welcome. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Luca Bacoccoli in Intesa Sanpaolo. Hi. Good afternoon, everybody. Two questions from my side. The first one regards the cash flow generation, which is almost doubling in the first semester versus last year. So I was wondering if it should be expected similar trend in the second half or we are going to be some, let's say, and also changes, for example, on CapEx, which were very low in the first part of the year, maybe deterring the strong trends seen so far. And the second question is on the efficiency targets. You mentioned that some countries were not happy on those targets. So I was wondering if you, let's say, were expecting less strict efficiency target or you are okay with it. Thank you. For what concerns the second question, it goes straight to the point. I guess I don't know what the other countries are going to do. I mean, I can imagine, but it's something that I guess is their point. For what concerns us, we are very focused to meet the target that was given to us according with this huge amount of traffic that we are managing. In this moment, this is our approach. For what concerns inside the cash, in general, we are generating a lot of cash, more cash than last year. If you look at the half, so this second quarter, end of this second quarter, we have generated more than EUR 28 million versus the last semester, sorry, half 2023, that was negative, was minus EUR 3 million. So in general, we are generating more cash, and this is definitely positive. Most of the impact of the cash we expect now in Q3 because, as you know, the billing cycle foreseeing that the traffic of one month is cashed in two months later. And that's the reason why all the important traffic, important volume traffic that we are managing now, even the last part of the second Q, will be cashed in now and the next month. So our cash generation will, in general, increase pushed by this increase of traffic that is actually billed and cashed in. Is that okay, the answer, or was it something else? No, that's okay. Thank you. Okay. The next question is from Nicola Pessina of Mediobanca. Hi. Good afternoon. I didn't really understand what are the changes under discussion to the bonus malus system. So can you please repeat the explanation? Sorry. Are you talking about the capacity target or some other targets, Nicola? Well, as far as I know, today, there is a bonus malus system applied to the quality of service measured in terms of the delay per flight. So I didn't really understand what is going to change potentially with the next regulatory period. No, the change is definitely the only okay. I understand what you said. The Commission said there's a lot of pressure on capacity, actually. So they allowed the service provider to manage better the bonus and malus mechanism. More or less, it's exactly the same. So it's just more flexibility on setting the target and, let me see, the scale, the mechanism where the bonus and malus is provided. So in general, you should think RP4 is more or less the same mechanism of RP3 and RP2. In general, the European Commission, as the general performance in Europe in terms of capacity, and so delay is not so good, is more pushing the state to perform well. That's the reason it's more focused to set the target for each state that are achievable but also challenging. That is actually the discussion at the moment. But I think. Yeah. The system would be actually the same. Definitely, I mean, as we know, the mechanism will more or less continue to be the same. All right. I understand now. I will also have another couple of questions. The first one is on the potential expansion into the airport business. You talked about this in the business plan presentation back in March. I wonder if you have done any additional thought about this and if anything is moving in this direction. A second question on a new agreement with the labor unions that the unions announced last week. I would like to understand a little bit more about what it refers to. Okay. For what concerns, the first question, I guess you said the part related to the non-regulated business and M&A opportunity was related. Okay. In this moment, we are in a phase of studying, looking at some opportunities. We have some small, medium companies that we are looking at at the moment. Nothing ready to start, to analyze, but there's always some targets that are related to our core business, I mean, activities that we in some way can complete our business, our core business, and also help us to be more proactive and push and non- regulated business. So nothing related to airport if this was a question or something like this, but it's more small target, very, very close to our business. Within the guideline we give in terms of technology areas related to us and software and cybersecurity, that's still what we are looking at. For what concerns the second question, yes, it was related to the agreement with unions. You know that on 30 July 2024, we signed an agreement with the unions. And this agreement will refer to the renewal of the normative part of the contract, as you know, the financial part was already updated in 2022. We have, I mean, and over some time, we can split these two parts. The financial part was agreed in 2022. And then if there are some updates to do on the normative part, we do after that. That was done, and it was closed on 30 July 2024. Let me say, the two things that touched, the first one, we actually also talked about our call, and it was related to the productivity. So we're aiming to incentivize the presence. In terms of cost, this doesn't really have a significant overall impact, very, I would say, little in terms of variable components of the remuneration. In some way, in the other question, we kind of introduced this item of the productivity. And the second point is the welfare, better rulings, the smart working. We have to define better the rules and put in the contract. And some other items in the area of welfare for the staff, very small thing, not big impact. Okay. So if I understand correctly, there is a new agreement on productivity impacting the variable component of staff cost. So should we expect an increase of this component becoming more relevant going forward and driving to an additional growth of staff cost going ahead? Yeah. The idea was to work more on flexibility and productivity. And we used this agreement also to, I mean, above all, to work on this side. As we said before in another question, we believe this is the right way to manage the correct way to manage the increase of traffic. And this will help to manage the peak of traffic during the summer and the situation. Then if the traffic will increase by 20%, actually, you definitely need to increase also the, I mean, to hire more and more people. But that's something that at the moment we are managing in this way. It's a mix between new people coming in, and this is something that's happening, actually, and above all, manage with the flexibility, the peak of the traffic. Sure. Very clear. Thanks a lot. You're welcome. The next question is a follow-up from Aleksandra Arsova, Equita. Hi. A short question on free cash flow. Just to be crystal clear, if I remember correctly, during the strategic plan presentation in March, you mentioned that free cash flow for 2024 should be at least in the region of 2023 free cash flow, which was about EUR 140 million. Do you confirm the fact that in 2024, we will see at least EUR 140 million or above? Thank you. At the moment, as we confirm the guidelines, the outlook, so the guidance, we actually confirm also the level of free cash flow generation as long as okay. No, no. We say no, no. What we have said. Sorry, just an internal check. But we said that in the meeting, we said that more or less the generation 2024 will be more or less 2023 generation. That is what we said, actually. In the moment, we confirm this thing. Then after the summer season, if the traffic will still continue to be very, very high, we may review also this point and see if we give another guidance or whatever, together with the other guidance that we will give. Okay. Brilliant. Okay. Thank you. The next question is a follow-up from Marco Limite, Barclays. Please go ahead. Hi. Thanks for taking my follow-up question. I've got just one left. So when we think about the CMD for next year when you're, yeah, going to explain the plan around the regulated business, I remember in the past, you were quite vocal about cost savings coming from ACC consolidations and the number of other cost savings that, yeah, ENAV is implementing. Just wondering whether you're going to, let's say, clarify and specify or quantify the amount of cost savings also that you expect to achieve in your next regulatory plan and whether, yeah, that basically comes on top of the unit cost target set by the European Commission. So it's all cost savings that you can keep for yourself. Thank you. Okay. Okay. What we can do, what we can say now, while the process is ongoing with the negotiation with the regulatory, we confirm what we said in the Investor Day in March when we said we need to finish, we need to close negotiation. We have the target set by the end of this year, at the beginning of the next year, because actually, when the European Commission will approve the Performance Plan, it's something that doesn't really depend from us. We believe we foreseen that more or less the process should be closed within the end of this year, the beginning, the first months of 2025. Right after that, we will deliver our—well, yes, we will deliver our business plan. And together with this, we will give some more flavor on what you are asking now with more detailed information that will be provided to all of you. But this still needs to wait the end of the process before adding some more detail. This moment is not something that we could disclose. We can disclose. I understand. Thank you. Okay. The next question is a follow-up from Cristian Nedelcu, UBS. Hi. Thank you for allowing me to follow up. Could I please follow up on the Qatar contract in the non-regulated business? So just to clarify this, if you exclude this contract, what was the revenue growth year-over-year in your non-regulated revenues? And then just to make sure I understand correctly, for the second half of the year, this Qatar contract revenues, what happens to revenues year-over-year? They are up, they are down, or just to confirm? And sorry, just another small one. Regarding the traffic in the next regulatory period, is this already decided, or can it still be subject to change? So the traffic for the midterm will be decided at the end of this year or beginning of next year, or if you could kindly clarify. Thank you. Okay. Thank you for your question. The first one is just a different distribution. So the point, if we compare the non-regulated revenue in this half versus 2023, it is a different distribution in the year. And that's the reason why we have EUR 2.8 million less than last year. But just because we had the Qatar project, that was very important last year. And this quarter is not, sorry, in this half, it's not, I mean, so important in terms of revenue. But this doesn't mean that we will not reach target and the outlook and the guidance that we had given. We definitely confirm it. That was in line. I mean, the growth of not-regulated business is at the moment in line with what was our planning, our budget. So we knew that we are going not to push to have a so great performance this part of the year because contracts are coming in now. So we have to, before adding the contract, eventually develop it. So the second part of the year was planned, and we confirm it, planned an increase of revenues coming from not-regulated business to let us reach the target in terms of growth that we have given, double-digit growth, as we said in our outlook. For what concern, instead, the second question, that was related - sorry, I'm a little bit tired and I - Yeah. I can quickly repeat it. The traffic. Yeah. Yeah. The traffic. The traffic. No, that's a good question because the point is now Eurocontrol gave the last forecast, the public, I mean, the one everybody knows. This forecast at the moment for the future year is not so—for what concern, at least the base scenario is already in some way—actually, old, actually. Yes. We can say old. At least for what concern, the base scenario for 2025, 2026. Actually, we are reaching now the level forecast Eurocontrol in 2025 for Italy, actually. So that's the reason why we are thinking about using a mix between the—always using the scenario, but not using the base scenario. Am I using, for example, part of the high scenario? You know that in the forecast, there is a high, base, and low scenario. Normally, we suggest to use the base scenario, or we can easily use another scenario or a mix between two scenarios. This is something we are thinking about now for RP4 because, as I said before, 2024, sorry, 2024 traffic result that we're aiming now is very, very important and is kind of getting beat to the 2025 base scenario of Eurocontrol. So that's the reason why we should expect probably in the first couple of years, more or less, a difference between the base scenario of Eurocontrol. And then at the end of the RP4, probably we will meet it in terms of growth, percentage growth. But you should still await our decision on this. This is just a flavor that I'm giving to you. We are thinking these days how to work on this item. And that's one reason we are waiting for the summer season to July and August are our two most important months of the year. That's the important reason, and that's the reason why we are really focused to manage well the traffic, to increase the traffic, and to see the impact of the traffic than having a very strong forecast in RP4. Thank you very much. You're welcome. The next question is a follow-up from John Campbell of Bank of America. Please go ahead. Hi. Yeah. Thanks again for taking my question. I wanted to follow up on this RP4 traffic forecast. So can you clarify if you will use February 2024 Eurocontrol updates, or should we expect you to use an October 2024 update? That is when Eurocontrol typically updates all of their forecasts. And any other details you can give on that would be helpful. I realize you were talking about the mixture of low and high and medium scenarios. But mainly, I'm interested in are you going to use February, or are you more likely to use October if and when it comes out? Thank you. At the moment, there aren't any public forecasts given by Eurocontrol. I mean, they are not going to foresee—I mean, they are not going to publish, at least for what I know, any update on traffic before closing the—sorry, the planning for RP4. So even if they publish in October new traffic, but the Performance Plan has to be delivered within the end of September, beginning of October, we will not be able to use. So each country uses the latest Eurocontrol forecast, and they are thinking how to plan their traffic using that traffic. Using also internal forecasts, internal study, we have our studies inside. We have analysis. Actually, we put on the top of the Eurocontrol forecast, we put these analyses that we have, and we try to find the best forecast for us. I cannot say anything else, actually, because we haven't decided. So I cannot give you any other, let's say, information about this other than the flavor and the way we are acting now. But it's really something that is not easy. There's not any Eurocontrol update. This doesn't really help us to be more precise in answering to, but in general, in the forecast. So we probably use the latest forecast, as I said before. And on these, we will do our analysis and our decision. Thank you for that. Thank you. Everybody works. Thank you. Gentlemen, there are no more questions registered at this time. I'll turn the call back to you for any closing remarks. Yes. Thanks a lot for attending this conference call. Obviously, the Investor Relations will be available for further follow-ups you need. Thanks again. Have a good evening. Bye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.