Good afternoon, ladies and gentlemen, and welcome to Eni's first half 2021 results conference call, hosted by Mr. Claudio Descalzi, Chief Executive Officer. For the duration of the call, you will be on listen-only mode. However, at the end of the call, you will have an opportunity to ask questions by pressing star and one on your telephone. I am now handing you over to your host to begin today's conference. Thank you. Good afternoon, and welcome to Eni's first half conference call. In the first part of the year, we witnessed a strong recovery in the energy market. The rebound in global GDP, the growth in oil consumption, and the OPEC+ agreement translated into a steady increase in crude prices. The gas market is similarly recovering, with summer prices at decade highs. While a highly volatile environment persists, oil and gas fundamentals remain positive. Today, we focus on three elements which define our investment case. First, the 2021 shareholder distribution, with the dividend raised to pre-COVID level, confirming our commitment to share part of our excess cash generation with shareholders. Second, the progress achieved on our retail and renewable businesses ahead of market transaction in 2022. During the quarter, we completed the merger between the two entities, and we have been able to accelerate our renewable targets. Finally, our first half results, which are among the strongest in the recent years, with a solid performance and strong cash flow generation. Let's start with the 2021 shareholders remuneration, for which we set a Brent price of $65 /bb l. In order to define our price deck, we took into account the actual price to date, the expected trend, market fundamentals, and potential risks such as the emergence of new variants of COVID that could impact the market recovery. We will distribute a dividend of EUR 0.86 per share, more than doubling the size of our 2020 dividend. In line with our policy, half of the dividend will be paid in September, and the remaining in May 2022. Moreover, we will start in Q3 a buyback of EUR 400 million that we are executing over the six months. A key element of our investment case is to maximize the value of our retail and renewable businesses. During this quarter, we completed the setup of the new entity, incorporating our renewable businesses into Eni gas e luce. The internal process for evaluating the best option to maximize the value for this entity is ongoing, and in the coming months, we will be able to update the market on this respect. This combination presents a material step in reducing Scope 3 emissions, providing decarbonized product to our customers. This new entity has a unique value proposition. It represents an integrated and synergic platform across the green energy value chain, from generation to supply. It benefits from a global presence and well-established businesses, both in terms of size and portfolio diversification. Its solid growth profile is supported by a reliable customer base and a strong organic pipeline of renewable projects, which are already complemented by a selective asset acquisition strategy. Its cash flow is robust and visible, made stronger by the natural hedge between generation and retail sales. It will be financially independent with its own investment-grade rating, drawing full benefit from lower interest rates and higher leverage flexibility. Digital solution will be a further lever to enhance our green offer to our large customer base. Going into more detail on our renewables, we are announcing an increase of our short and medium-term targets. In the period 2023-2025, we are enhancing our installed capacity target by 1 GW, accelerating our plan. Since the beginning of this year, we have defined, expanded, and de-risked our pipeline of renewables project. This now stands at 9 GW, of which 2 GW of installed and in-construction capacity, an additional pipeline of about 7 GW related to assets at different stage of maturity, of which more than 3 GW are secured. Almost 80% of our pipeline is in Italy, Spain, and France, integrated with our retail presence. The acceleration of our growth in the coming years is the first step toward our goal of more than 15 GW of installed equity capacity in 2030. Thanks to the acceleration of our renewable growth, 2024 EBITDA will now be over EUR 1 billion, a 10% increase versus the previous guidance and almost double 2021 levels. Our renewables business will benefit from a large captive customer base, a stabilizing factor for result, as well as contract optionality. The renewable business will be at breakeven already this year and will deliver more than EUR 300 million EBITDA in 2024. Let's move now to our first half result, one of the best in the last 10 years. EBIT of EUR 3.4 billion is more than 3x the same period in 2020, driven by the upstream, retail, and renewables and chemicals, which score a record performance. In upstream, production at 1.65 MMbpd is in line with guidance. Exploration discovered more than 300 MMbbl, almost 2/3 of our yearly target. Main successes were in Norway, Angola, Indonesia, and Ghana, and we are progressing the business combination in Angola with BP. This new company will represent a fully autonomous operating and financial vehicle. It will allow further growth in the country while capturing synergies between two of the largest local operators. We are aiming to replicate our success in a country where we foresee major exploration and development potential. With regard to Energy Evolution, Versalis, our chemical company, fully captured the positive market upside. Retail and renewables is delivering a steady growth. In the oil downstream, marketing result were robust, driven by the gradual recovery in demand, while refining was impacted by negative margins. Our net profit at around EUR 1.2 billion has recovered to pre-COVID levels, driven by the EUR 0.9 billion of the second quarter and a tax rate of 55% in the semester. Free cash flow generation in the first half was strong, with cash flow from operation before working capital at almost EUR 4.8 billion, plus 41% versus half 2020 and CapEx at EUR 2 billion, with no change versus last year. At the end of the semester, our balance sheet is stronger, and the leverage pre-IFRS has decreased to 25%. Turning to natural resources, upstream EBIT in the first half was at over EUR 3.2 billion, an increase of EUR 3 billion compared to 2020, thanks to lower cost and improved scenario despite the lower production. Also, cash flow from operation was robust at EUR 4.6 billion, almost double versus 2020. We expect production to recover in the second half of the year, confirming our 2021 guidance of around 1.7 MMbpd. In the third quarter, its expectation at 1.68 MMbpd. In second half, production increase will sustain by recovery from planned turnarounds, ramp up in Indonesia, and the Emirate of Sharjah. Contribution from fast time to market exploration. In this respect, we confirm that the Cuica field in Angola, discovered in March, close to our existing FPSOs in Block 15/06, will be connected to the production in these days, just four months after the discovery. Let me spend some more words also on Egypt, which is improving the success of our integrated gas model. In the first half of the year, Damietta Plant successfully loaded 17 LNG cargoes, which contributed to our asset gas production in Egypt, reaching a record level of nearly 4 Bcf /d. Nearly 30 additional cargoes are expected in the second half of the year. Finally, GGP, our Global Gas and Energy portfolio business, was at EBIT breakeven in the first half. For the full year, we confirm an EBIT at breakeven, while free cash flow will be positive at EUR 0.2 billion. Moving to energy evolution. In the first half, Eni gas e luce and Renewable EBITDA was at around EUR 350 million. Retail EBITDA contribution in the period was 40% higher than last year, thanks to high-value services that contributed for 15% of the EBITDA. A 3% growth in the customer base compared to the end of 2020, resulting from organic development and the closing of Aldro Energía acquisition in Spain. Retail and Renewable is expected to reach an EBITDA of more than EUR 600 million in 2021, better than our original guidance. In R&M, in line with the improving trend on a quarterly basis, we expect a positive second half result, driven by a recovery in demand, bio-refining margin improvement, and optimization initiatives. Versalis performance was mainly driven by a recovery in demand, coupled with a shortage in supply. Margin for polyethylene and styrenics rose to the record levels. We were able to capture the positive scenario thanks to the high availability of our plant. In the second half, we expect rebalancing across the industry supply demand that will drive a downtick in prices. However, we expect margins to remain higher than the corresponding period of last year. In 2021, the overall EBITDA adjusted pro forma for downstream is confirmed in the range of EUR 400 million, mainly related to chemicals. Turning now to our cash generation. Free cash flow in the first half was strong at EUR 1.9 billion. For the full year, assuming a Brent price of $65/bbl and a slightly negative refining margin, free cash flow generation is expected at EUR 4 billion, growing to EUR 5 billion at $70 /bbl, thanks to production growth and capital discipline. Our CapEx is confirmed at EUR 6 billion. Our 2021 performance combined will allow us to maintain the leverage below 30%. In conclusion, today we remarked our commitment to prioritize our shareholders with an increased distribution, our progress in maximizing value in energy transition, and our first half result and full year guidance for a strong 2021. Now with Eni top management, we are ready to answer your question. Thank you. We will now begin the question- and- answer session. Anyone who has a question may press star and one on their touch-tone telephone. To remove your question, press star and two. The first question is from Mehdi Ennebati of Bank of America. Go ahead. Hi. Good afternoon all, and congratulations for those very strong results. I will ask two questions, please. First one, on your upstream tax rate, which came at a relatively low level, even if I compare with the previous year. Has it been temporarily impacted by some one-offs, which led to particularly low tax rates this quarter? Or should we consider that with the development of some projects that you started recently, and in a $70 Brent environment, your upstream tax rate, sorry, in the future should stay below 50%, let's say between 40%-50%? Second question is on your realized gas price, which slightly improved quarter-on-quarter, but remains below $5 [down here]. I understand that for some of your gas production, your selling price is linked to the oil price with a delay. Should we then expect that your realized gas price will strongly increase in the coming quarter, thanks, not only to the increase in the spot gas price, but also thanks to the increase in the oil price that we have seen those last months, which is going to impact your gas price during the second half of this year? If I may, last small one question. Your refining margin indicator, so it remains negative in the second quarter. Can you tell us about the current level, please? Are you benefiting from the increase in margin that some of your peers have been highlighting since beginning of July? Thank you. Okay, thank you. Now, Francesco, our CFO, will answer the first two questions, and Pino Ricci will answer the third one about refining margin. It's combined with the E&P and other margins. I think it's Francesco and Pino together will answer. Yes. Thank you. About the tax rate, clearly what you have seen this year is a more normalized tax rate. Once you compare with previous year, you were comparing a mix of contribution of our portfolio that were, let say not reasonable in terms of performance. We are today seeing that all the components of our portfolio, upstream and downstream, are more balanced, and in the upstream, the countries that have a lower tax rate, for example, certain OECD countries, U.K., U.S., Italy, could benefit of certain results that will reduce the average tax rate. The answer is substantially that we are expecting that in a $65 world will be in the range of this 55%, that is actually what we have so far achieved. Is in line with the 60% guidance that we gave at the beginning of the year in a $60 world. Once the price of oil is going up, there is, let's say, this rebalance between the various components. In terms of additional information, you can see that upstream tax rate is in the range of 45% due to the explanation that I gave, so the different contribution of countries. In terms of gas, it is important that what you mentioned, it is true that there are part of our volumes that are related to oil-linked. Generally, oil-linked formulas have a delay or an average related to nine months, so three quarters of results, and therefore, the gas price will follow the trend with a certain, let's say, delay. The spot clearly is weighting 20%, and the oil-linked instead is weighting 25%. The remaining 55% are volume sold to a fixed price or contractual price that are less relevant. Yes. Thank you. Now I leave to Ricci the answer for the last question. Thank you, Francesco. About the refining margin, we are seeing in July a little improvement in the margin. They still remain very, very weak. What we expect is a further improvement in the second half, depending to the evolution also of the COVID, because the different increase in the COVID measures could affect the increase of the market. What we could see is that our sensitivity that we have done in case of margin that continues to be negative in the second half, in the overall energy evolution, we are able to maintain the result of the budget. Thanks very much, all of you. The next question is from Irene Himona of Société Générale. Please go ahead, madam. Thank you. Good afternoon. My first question concerns the EUR 934 million special item, in the second quarter. It appears to be in refining and chemicals. I wonder if you can say what it relates to. Secondly, Claudio, as you mentioned, you're expanding the renewables portfolio and upgrading the target. You recently added capacity in Spain and France. Can you give us some indication, please, either of the multiples you paid to enter those projects, or indeed some sense of the economics you would anticipate, such as equity IRR, for example? Thank you. Thank you. Francesco will answer the first question and then I talk about the second one. Thank you. Yes. [Non-English content], Irene. Yes, you have seen it's correct that we have this write-off. Actually, the write-off are completely related to the refining segment. We have updated our evaluation on the basis of new scenario on the lower the margin and very weak margin this year and the coming years. Therefore, we have substantially written off entirely our downstream, our refineries. This EUR 900 million are related to that. About the expansion in renewables, it's true we accelerated our renewable acquisition and also the organic growth, but that mainly in the last four months, we talk about inorganic growth. We participate to tender, and we won, or we acquire directly. We can say that we in four, five months, we achieve what we promised to achieve in four years. We accelerate drastically also in the view of the consolidation of the new companies, of the new business combination between renewables and retail. That's the reason we wanted to progress faster. When the company will be there, will be capable, to have a debt, to invest in renewables to grow further without impacting our balance sheet and our leverage. Talking about what we paid. It is a mix of capacity in production, under construction, and future pipeline. As you know, we have about 9 GW now, so an additional 4 GW or 3 GW with respect to what we said, if I'm not wrong, what we said in February. We have 2 GW this year, so instead of 1 GW by the end of 2021, we have 2 GW in production and in construction as well. We have additional 3 GW that are secure, it means they are in development, and the rest are, we can say, like in exploration, in P3 or reserves. That mean that is in our own, we have acreages, so it's very easy to get permit because at least two of them are organic. They are land that are in Italy, and so it's quite secure. We put it in the medium term. The multiple for what we acquired, this new quantity of renewables are in the range between 9x and 10x. More 9x than 10x. It's very good. I can say that to acquire about 600 MW in production for about EUR 660 million. Is correct, Francesco? Yes. Correct. The 9x-10x is a multiple towards the EBITDA. Yes, the 9x-10x is a multiple EBITDA. Yes, clear. That is more or less what we invested. Now we continue working on the new company to, in the future, growing more, faster, and be more efficient and give more value to all our company. Thank you very much. Thank you. The next question is from Biraj Borkhataria of RBC. Please go ahead. Hi. Thanks for taking my questions. The first one's on the gas business. You mentioned that contract renegotiations were a contributor to your results in the second quarter. Can you quantify that? Also let us know if you're expecting any further renegotiations to be agreed later this year. The second question is just on your CapEx program in the upstream. You've typically had a higher weighting than some of your peers towards short cycle, tieback-led projects. These obviously are quite high return, and they're pretty quick to come online, and I think you mentioned one earlier. Given where commodity prices are you looking to mobilize any additional upstream CapEx in the second half of this year or in 2022? I'm just wondering how much incremental CapEx you could put to work on these types of projects. Thank you. Thank you. The first answer about gas will be given by Cristian Signoretto, and the second one by Alessandro Puliti. Hello, everybody. As we said, during the three months ago, we have started a round of renegotiation linked to the fact that the spread between PSV and TTF in Italy has deteriorated substantially. What we have achieved in the second quarter was actually a first, let's say, round of renegotiation of some of the contract. There are still some ongoing, which we expect, let's say, to settle in the course of this year in order basically to allow us to rebalance our level of portfolio towards the new reality of the Italian market. Okay. Regarding CapEx upstream, we do not foresee any CapEx increase. We will continue with our policy to sustain production through production optimization activity and near-field exploration tieback, as you mentioned. This will not require any extra CapEx for what we have already stated. Okay. Understood. Thank you. The next question is from Martijn Rats of Morgan Stanley. Please go ahead. Yeah. Hi. Hello. I've two, if I may. First of all, I wanted to ask about the reference oil price of $65/bbl that you said. On your website, there is a schedule that goes to $66/bbl. If you'd set it at the top end of the range, it would simply be the top end of the range. It's a dollar lower, and this may sound like a bit of a nitpicky question, and I don't want to be it like that, but the dividend is very important for the Eni share price, so we spend a lot of time trying to forecast the dividend, given the schedule that you set that seemed to become a matter of mostly forecasting oil prices, and then the dividend would flow out. Now it looks like you're building in margins of safety relative to what, say, consensus forecasts are for the oil price or what the forward curve says for the oil price. At the moment, that discount between, say, the forward curve or consensus forecast for oil prices and the $65/bbl you set is a rather large margin of safety. I know this is all a new schedule, and we're trying to sort of find our way through this, but of course, the situation would change a little bit If going forward relative to oil price expectations that prevail in the market, you'd start to set rather large margins of safeties, large discounts to that when effectively setting your dividend policy. I was wondering if you could talk a bit about why you set $65/bbl rather than simply the top end of the schedule, and also what levels of margins of safety you would like in this reference oil price going forward. That would be one thing. The second thing I wanted to ask you is about refining and the EU's Fit for 55 package. Look, in the Fit for 55 package, refining is still treated relatively benignly, but the way things are going, it could well be that either there could be decarbonization targets for refining at a Scope 1 or 2 level. Before you know it, you start to think about, well, that will require quite a bit of CapEx, and refining margins are already quite low. Incurring more CapEx is not easy for the European refining system to absorb. When you start to put those things together, you wonder what the true long-term viability of this business is, and it's already been challenging for some time. In the context of Fit for 55 decarbonization, potentially more CapEx, what do you think the long-term prospects are for the refineries that you still own? Okay. Thank you, Martijn. I'll try to answer to both questions, my colleague can intervene if there is some additional points. First of all, your point about $65 /bbl clearly has been discussed among us. It was a very critical point because on that, we base our dividend and also the buyback. Why $65/bbl? $65/bbl is not safe for us, it's not margin for us. We made a calculation, as I said during the presentation, based on what is the price now, what is our view, clearly talk about the forward curves, our view about where we are, our countries, and our business. Also the uncertainties that we are still living. We are not in a clear situation. We still have some uncertainty. We don't know exactly what is going to happen in September, October, what is going to happen for the fourth waves of the variant of COVID. Clearly, we have some uncertainty. The $65/bbl really is in the upside of what was our evaluation. We find an agreement because we want to really to recognize to our shareholders after the 2020, a clear focus. A clear priority. We also said that the buyback of EUR 400 million will happen in six months, not in 12 or 18 months. We accelerate, and we start immediately the EUR 400 million. We anticipate, and we say clearly. That is a quite interesting point because we don't spread over a long period of time, but we put all together. That are the reasons. Clearly we'll see in February, March, when we present our strategy, and maybe we can say something additional on our policy, as we did in the first quarter when we change our and we reduce the floor to increase the share of the free cash flow for our shareholders. For refining, clearly refining in Europe is under pressure, is not now. COVID clearly creates additional pressure and additional fragility emerge, and the negative margin that we have in the last three, four quarter are clearly the result, not just demand, but also refineries that sometimes are not, I talk in generally, but it's clearly is true also for us, are not closely linked to upstream, are not closely linked to chemicals. We have additional cost respect to other geographies. In Europe, we had another stuff that is the cost for the taxation for CO2. The ETS, we have a carbon pricing that before was very low, now is more than double in the last six months. We are close to EUR 50/ ton, the forecast is to increase. It is in a very fragile situation. For that reason, we started already, we closed two refineries. We transformed these refinery in biorefineries. Our plan that we really started is to have a right sizing of at least three of our refineries, clearly to reduce the capacity, to reduce the cost. That is the first step. Thank you, Martijn. I don't know if there is other point from our colleagues. I don't think so. Okay. Thank you. Thank you. The next question is from Massimo Bonisoli of Equita. Please go ahead, sir. Good afternoon. Three questions. One on retail and renewables. Your guidance of EUR 350 million EBIT implies only EUR 40 million in second half 2021, versus almost EUR 200 million in second half last year. If you can shed some light on the second half in retail and renewable. The second is on chemical. The average plant utilization rate was only 65% in second quarter. Considering the very good margin, why the utilization was so low, should we expect some operating leverage maybe in second half? Also an indication for margins in petrochemical in July would be helpful. Third question on the shareholder remuneration. Given your current share price, would you consider maybe next year a different mix in shareholder remuneration? I mean more buyback than dividend. Thank you. Okay, thank you for the question. Alberto Chiarini will answer the third question about the EBITDA. Yes. Okay. For the retail, as you correctly mentioned, in the first semester, we had a very strong semester with almost EUR 80 million more than last year, and we are now in EUR 262 million EBIT. If we look at the forecast, we still are better than last year, but we are reducing the gap, and we are forecasting EUR 382 million. Part of this is the seasonality, so we have anticipated some of the margins that we were expecting during the year, we have anticipated in the first half. Part of that is also the strong contribution of extra commodity that we experienced in the first half because of the Superbonus and the incentivization that we have taken into consideration in the second half with a bit of contingency because of the uncertainty of the legislation. Overall, the forecast in 2021 is still EUR 20 million better than last year. Chemicals. Adriano, if you can answer about Versalis, please. Sure. Thanks for the question. Let me explain. In the second quarter, we have been facing some plant turnaround, particularly in Brindisi, where we have the biggest cracking and the polyethylene business that were supposed to go in a turnaround between end of Q1 and beginning of Q2. In order to catch the highest margin that we have seen at the end of the Q1 in April, we have postponed, but we have not been able to postpone later than May. The asset utilization is a result of the turnaround in Brindisi, and turnaround in Brindisi was in cracking aromatics and polyethylene. In addition to that, we had also plant turnaround in Mantova for styrenics business. It's a big site. The $65/bbl take in consideration these two big turnaround. If you go to the second question about the margin, definitely in the first half of the year, we have seen incredible margin relate to the shortage of product, and especially on the polyethylene that we have seen record elastomer, that have seen very high margin, and styrenics as well. In June, we have seen margin start to declining, mainly as a consequence of increase of raw material cost, but also stabilization of supply and particularly increase of import again from other region like North America. Going to the specific question, in July, we've seen a further reduction in margin. We expect that this margin will stabilize in the third quarter, but overall, the margin will remain in the second half higher than in the same period of last year. For the last question, as you know, we have already a dividend policy that consider a floor and a variable part that is a portion of the free cash flow, and the buyback. Clearly, we already in the situation where we pay the dividend and the buyback following a price. It's not the time now to talk about a new policy, clearly. I think that if there is any update, we'll communicate any update in February, March, when we perform the strategy presentation. At the moment, that is the policy, and that is already considered in the policy. Thank you. Thank you very much. Very clear. The next question is from Alastair Syme of Citi. Please go ahead. Hi, everyone. Two questions. Firstly, I was intrigued by your comment about that Eni gas e luce will have its own independent credit rating. One of the problems with your own credit rating is the rating agencies have insisted on keeping it pretty close to the Italian sovereign. I wondered how you avoid that problem with Eni gas e luce. Given that you're only going to list 10% of the business. Secondly, I wonder if you could update on plans you've had, or you've previously talked about to replicate the Vår Energi model in other regions of the world, such as Angola and the Far East. Thank you. Okay. Yes, Francesco will answer the first question. Clearly about the new entity, Eni gas e luce and renewables, we will start clearly the valuation from agency. Clearly it will benefit of the combination of the stable and growing cash flow coming from retail and from the high growth potential of renewables. What you mentioned about the difference spread, the maximum notch that are required by the credit agency cannot be avoided. Clearly, there are reference. What will be important that I would expect the company will be investment-grade. I don't think this will be a problem for raising a quite material amount of capital. The second question is for Alessandro, please. Okay. About creating other business opportunity like the Vår Energi model that we created in Norway. We can confirm that we are progressing in Angola with BP. That's, let's say, ongoing activity, and we are also actively looking for other kind of these opportunities around the world, since we believe that they could bring both operational and capital allocation synergies. They are very beneficial to the upstream business owing the current general situation. Sir, has your question been answered? Yes. Thank you very much. Okay. Thank you. The next question is from Roberto Ranieri of Intesa Sanpaolo. Please go ahead. Yes. Thank you. Good afternoon, everyone, and thank you for the presentation. Just going back to the renewable business, I have a specific question on regulation in Spain. You mentioned Spain and France as few of the areas important for your renewable capacity development. My question is if you can give us an update on the regulatory risk related to the CO2 extra margin cap under discussion from the Spanish government at the moment, and basically if you have any news on that. On renewable business, after the acquisition you had in the offshore wind, my question is specific and also, I would say strategic. The question is if you are still committed to invest in the offshore wind. Basically if you think that this kind of a business is economically viable and seeing that because some of the traditional offshore wind operators are exiting from the offshore wind. My third question is on chemicals. Very specific on figures, if you can give us a split of the EUR 0.4 billion EBIT guidance between refining and biochemicals and oil-based chemicals. My last question is still on the chemicals. It's about a long-term view. My question is, do you see any room, still room for oil-based chemicals in the long term? We talked about the margins on aromatics and polyolefins right before, which were pretty good. I'm wondering if you want to invest downstream on this value chain of the traditional and oil-based chemicals, or the oil investment will be devoted to the biochemicals and green chemicals. Thank you very much. I give the floor to Alberto and also Alessandro Dal Raso for the first two questions. In terms of the legislation, the regulatory risk in Spain, of course, I will not enter into the details. It's under discussion, for what I understood is probably more hitting retail than renewables. Currently, the whole environment in Spain is in an incentivizing mood for renewables. We see a very dynamic market for renewables in Spain. In terms of the offshore wind, of course, we will continue to invest. Dogger Bank for us was kind of entry point in this technology, and we will build up on the experience of Dogger Bank. We are participating now in Scotland to some auctions. We believe that we need a mix of photovoltaic, onshore wind, and offshore wind in the future. Okay. Adriano, can you take the floor to answer all the chemicals on question, please. Sure. As Claudio mentioned at the beginning, the EUR 400 million that we expect for 2021 are mainly driven by the chemical sector. I would say roughly 75%-25% between chemical and renewable. In terms of guidance or in terms of what we expect for the other stream of business, in addition to polyethylene and aromatics, we clearly have a big participation also in the styrenics market and in elastomer. These are smaller than the polyethylene business, where we play today. We see margin in elastomer and styrenics stable for the remaining part of 2021. We expect that also for the next 12 months, the margin will remain pretty much at this level, mainly driven by recovering demand in the construction and durables. Mainly for styrenics, in automotive, especially in special application for automotive industry, for elastomer. We have some special product for new tire performance, a new compounding performance of elastomer business for automotive sector. Also because the driver, as you know, in the automotive sector, are completely changing from square cars. Hello? Can you hear me? Yes, sir, your line is open. Okay, good. I heard some Okay. Especially because the driver for automotive sector are completely changing, and the type of product that are in specialization for automotive products are changing, and we are trying to go in this direction. What about downstream business? That is the third part of your question. Definitely something that we are looking very carefully. As you know, we already made an acquisition to go downstream in compounding and in molding, more related to the polyethylene business. Although it open opportunity also for elastomer. That is the 40% of acquisition of Finproject. Today, if you want to capture higher margin in chemistry, in the chemical sector, you need to specialize. The specialization is coming either from product or going down in the value chains, offering solutions to customers. These are the two direction that we are moving as a Versalis. Specialization of the portfolio in terms of product and moving downstream in the value chain. Thank you very much. Very clear. The next question is from Giacomo Romeo of Jefferies. Please go ahead. Good afternoon. Thank you for taking my question. The first one is about your retail and renewable business. I'm looking at the incremental details you provided, particularly regarding the customer growth expected from 10 million to 15 million. Obviously, at the moment, you are making a very good margin on this business. I would like to understand what's your thinking behind the potential effects on margins, driven by a liberalization of the market in Italy, whether this could bring a margin erosion. The second question is really getting your thoughts on the Fit for 55 legislation around biofuels, what you thought about the biofuels targets, particularly regarding sustainable aviation. Some of your peers have expressed concern about the cap on animal fat feedstock, whether it would be good to hear your view on that as well. Thank you. Alberto, please. Okay. Floor. Yes. On the margins, of course, you are right. Liberalization is an ongoing process. Far a bit slow in Italy, I have to say. Certainly, the result will drive the margins to become smaller than they are now. However, we have this very clear. We have incorporated that in our four-year plan, and the reason why we will still grow in terms of results is because we will be growing in all the high-value services. We are already providing around 20% of our EBIT with extra commodity services, and we believe that in the future, this will be very more and more important. We are somehow replacing the reduced margin per customer with extra services that we can provide to our customers. Thank you. Now, Pino Ricci will take the floor to answer for Fit for 55 versus biofuel, Biojet, and the European legislation and regulation. Pino, please. Yes. Thank you, Claudio. Thanks for the question. Fit for 55 increased the ambition of Europe in term of transition, accelerating the target. This is a very good opportunity for biofuels because it's impossible to reach this target only with electrification. That it means that all the target will increase in biofuel for transportation, road transportation, Also aviation and marine transport. That it means that who has advantages in technology and the plant for production of good biofuels, both biomethane and biodiesel or biojet, has a competitive advantage. About the biojet, we are seeing a very good accelerations. We know that all the airplane companies, all airport companies, are thinking in which way they could anticipate the regulations, Also considering what is expected in European ambition. That it means 2% of biofuel in Biojet within 2025. At least 6% within 2030. That it means a lot of million tons of biofuels. For this reason, we have planned to convert part of Gela Biorefinery to produce 150 kilotons per year of Biojet, before 2024. Probably we try to anticipate something. About the animal sector, we have no particular concern about animal sector because our strategy is to diversify the feedstock and increase the number and the typology of feedstock that we have to supply on the market. Our strategy is to enlarge the supply by trading and commercialization, but also to develop internally feedstock. For this reason, we are growing in the production of feedstock, both from low ILUC agriculture, especially in a marginal and rotation field in different countries in the world, and the collection of cooked oil and looking at for other different feedstocks. We are pursuing also the vertical integration in order to be empowered in all the supply chain. Just to add something because it is better to remember that, first of all, we can diversify our feedstock because we build, we construct the technology. It is our own technology coming from our R&D. We expanded the feedstock. Now we can treat more than 150 different kind of feedstock, and that allow us to have a different spectrum. Secondly, that everybody knows, but it is better to remember that by 2023, we stop using palm oil. We continue with a primary but different kind of, as Pino said, kind of feedstock that is not competition with food, and can give more breadth and more also positively impact agriculture in Italy and in the country where we are. That is very important because the diversification respect to the oil and gas. It is one of the UN SDGs that is part of our philosophy and our approach. We help the biorefinery, we help Europe, but we help also the country where we work. Thank you. Very clear. Thank you. Okay, thanks. Jon Rigby of UBS. Please go ahead. Yes. Hi. Thanks a lot. Two questions. Firstly, since we have spoken about tax, I thought I'd come back to that. Can you just explain or maybe just shine a light on whether there's any value or opportunity now that you're beginning to identify earning streams around biorefining, the renewables and circular bits of the chemicals, obviously. We lost. We can't hear anymore. Hello? Next question is from Bertrand Hodée of Kepler Cheuvreux. Please go ahead. Thank you for taking my question. I have two. The first one is on renewables, and especially in Italy. Do you see progress on the permitting process, which was very slow due to administrative constraint? Is the Italian government has come up with, I would say, with a simplified procedure to accelerate renewable permitting? That is the first question. Then I have a bit of a housekeeping question on Q2 upstream performance. In the press release, it is noted that clean EBIT benefited from retroactive contractual revision. Can you quantify the positive impact on Q2 upstream EBIT from those retroactive contractual revision and give some color on that? Yes, thank you. Alberto, you answer on the renewable, and Francesco on the- Yes. There is clearly a strong commitment of the government to simplify the procedures for authorization of renewable projects. This is the so-called simplification decree, [Non-English content]. At the moment, it's a bit too early to evaluate the impact. It will be positive, but it's difficult to say how positive will be, because it requires to put in place some committees at government level to manage this authorization. The idea is to bring this authorization from the regions, the communes, and to try to centralize a bit. Of course, you don't know how quick will be the process, even though centralized. We'll see. Okay, about the one-off effect on E&P in the quarter, it's just above EUR 100 million, and it is mainly related to certain renegotiation in countries in Africa that were covering previous quarters, so that is this cumulative effect. Additional variation or improvement related to infrastructure cost and funds. That is the reasoning of the one-off. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to ask a question, please press star and one on your telephone. Mr. Descalzi, there are no more questions registered at this time. Thank you very much. Thank you for listening us. In any case, as you know, for any other question in the future, we are available every time to answer your question. Thank you. Have a good day. Thank you. Bye-bye.