Good afternoon, t his is the Chorus Call conference operator. Welcome, and thank you for joining the Interpump First Quarter 2021 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 Mr. Luca Mirabelli, Head of Investor Relations of Interpump, p lease go ahead, sir. Good afternoon to everyone on the line. Thank you for dialing in and for dedicating your time and attention to Interpump. Today, we are here to briefly comment on the results for Q1 2021. As usual, in the company of Fabio Marasi, executive board member, and with the precious support of our CFO, Carlo Banci. Today's set of numbers is very reassuring, to say the least, with some amazing aspects. Let's start, of course, from the top line. Sales for the quarter registered an organic increase of 11.6% compared to one year ago. If you allow me a bit of approximation, this means that organic business is back to the same level of the beginning of 2019. Foreign exchange, this time, worked against us, shaving off 3.4%. However, this was not a surprise. Lastly, the perimeter extension accounted for 1%, resulting in a reported increase in sales of 9.2% to EUR 375.6 million. Going by division, we are seeing what I would define to be the expected development of the situation already seen in Q4. Hydraulics is in a full recovery phase. First of all, from the slowdown brought about by COVID-19 and related lockdowns. There is some evidence that what we are seeing is more than just pent-up demand. The accelerating trend of orders and the time horizon of the order portfolio both point to a more structural recovery of our destination markets. Sales in hydraulics are up 16.2% organically, with a -3.3% negative effect from currency exchange, and a negligible +0.7% due to acquisitions. The final reported figure is EUR 266.9 million, up 13.6% compared to one year ago. Water jetting is somewhat lagging, with sales in the quarter for EUR 108.7 million, almost in line with one year ago. The underlying organic trend is positive at +1.8%, but it gets reversed by the strong -3.8% currency headwind, and gets to its final reported -0.3% thanks to the addition of Servizi Industriali. The reasons for this different behavior are the same as outlined in our last presentation. First, the comparables were easier in hydraulics, which had experienced an exciting trend as early as Q4 2019. Second, many application sectors of high-pressure pumps, and even more so of flow handling components, kept working as normal throughout the pandemic, which contributed to a better result for the year, but also means no significant contribution or expectation of pent-up demand. Third, and perhaps more important, even those industries which kept their operations going had to postpone some of their most ambitious CapEx projects, which were particularly difficult to coordinate during the pandemic while they were busy enough with their day-by-day activities. There is no doubt that the situation is going towards a normalization, and we are seeing some evidence here and there in the order portfolio. Comparables will be easier from now on. It will take another quarter or so before the flow of sales related to large projects is back to pre-COVID levels. As a reminder, large projects for our customers does not necessarily correspond to large order sizes for us because we are largely a component supplier, we do not provide complete solutions. As we move on to the split of sales by geography and sector, please be advised that during the first three months of the year, the situation developed so fast and so erratically that figures for the entire quarter have even less importance than usual. However, I'm happy to report that Europe is up nearly 10% compared to one year ago. As a reminder, a lot of our plants were affected by lockdowns in the last days of March 2020, especially in Italy, which accordingly is overperforming with a + 17%, while the rest of the continent is expressing a healthy + 6%. North America raised its head after the turn of the year. However, due to the very unfavorable exchange rate, it took until the end of the quarter before we could see a positive sales performance in euro. This is why the reported figure for the entire period is still negative, but the active speed of the quarter tells a different and much better story. Asia Pacific is up 26%. The performance here is driven by China, which is up 40% versus a Q1 that represented its worst quarter on last year. The rest of the world area is showing a somewhat surprising +18%, with India finally back to a very vigorous growth of nearly 50%. Which fully compensates for the drop in last year. Unfortunately, I have to add that the situation in India is still developing, and the government has introduced new lockdown measures. It is fair to expect a bit of a rollercoaster for India for the rest of the year. In terms of sector, outperforming application sector for the quarter is agriculture, with a very positive +33%. Maybe it's useful to add one thing. We always make comparisons at unchanged perimeter, of course, but perhaps we need to point out that this sector, agriculture machinery, nearly doubled its weight in the last three years, also thanks to our acquisition in recent years. Other noteworthy performances, trucks are up 23%, earthmoving are up 14%. Food, cosmetics, and pharma have finally turned positive at +3%. Let's now move on to the best surprise of the quarter, profitability, which was positively affected by a combination of favorable circumstances. The first, of course, is the increase in production volumes, but even more importantly, in regularity of operations. As you can imagine, our cost structure at the beginning of the year was very optimized, no fat on the bone. This is especially valid for sales and marketing, as business travel and trade shows with all related expenses like advertising and interim personnel are not back yet. At the same time, thanks to a mix of pricing power and careful stocking policies, we are well protected from the negative effects of inflation in raw materials, which, of course, we are seeing like anyone else. This time, what we can call the cost of flexibility of our production capacity, I'm referring to overtime, extra shifts, and interim personnel, has just begun to reappear, but it's still very limited. We have been totally transparent throughout last year about the buffer provided by the welfare systems, mainly abroad. I think it is very important to underline that there is no meaningful contribution for this quarter. This means that all our plants are back to regular operation, and hopefully, this is the last time that we will need to comment about this. In terms of divisions, both divisions performed well in terms of profitability. Water jetting registered a very satisfactory 28.2% EBITDA margin. I'm happy to point out that this is the highest margin ever for a Q1 in water jetting, corresponding to EUR 31 million. It is hydraulics that really shows the positive effects of the current situation. For the first time ever, EBITDA margin in hydraulics broke the barrier of 22% to jump into 22.6%, equivalent to more than EUR 60 million in just one quarter. Putting the two divisions together, EBITDA for the quarter amounts to EUR 91.5 million or 24.4% of sales, an amount and a margin which were never seen before at the consolidated level. Net income for the quarter came to a very encouraging EUR 63.8 million, with a tax rate of 26%. Cash flow from operations was EUR 84.9 billion. After shrinking for the entire past year, net working capital finally started to increase, as typical of a first quarter and even more typical in the presence of organic growth. Net working capital absorbed EUR 27.8 million, which is quite moderate compared to what we've seen in some quarters in the past. I truly believe that by now everyone knows that the increase of net working capital at this amount is a sign of good health. CapEx for the quarter amounted to EUR 14.7 million, roughly 5% on sales, beginning the year at the highest end of our capital range. Free cash flow amounted to EUR 40.8 million, slowing down, if we may say so, from the excess speed of 2020, but still very healthy considering it already incorporates an investment in working capital. No further shares were purchased this quarter due to the appreciation shown by the market, which brought the price above the authorized maximum. Expense for acquisitions was EUR 5.3 million, almost entirely related to I.M.M. Hydraulics [guess]. All this brought our net financial position at the end of the quarter to EUR 229.8 million, the lowest seen in a long time. Additional commitments for the purchase of subsidiaries stand almost unchanged compared to the beginning of the year at EUR 62 million. This was really the last number I had to tell you for our quarter results. I am sure that you are much more interested in knowing what's coming up. There is one thing that is impossible to notice when looking at simply as quarter results, but it's incredibly evident to anyone working inside one of our companies. I'm talking about the monthly trend. We showed an acceleration going from a slow January to a fair February to an outstanding month of March. This applies more or less to every aspect of our activity, sales, order income, backlog size, even margins. Well, margins are admittedly benefiting from the fact that we are passing an inflection point. In other words, we are benefiting from the recovery that is not yet experiencing part of its costs. Therefore, I wouldn't encourage a naive and simple linear projection that would incorrectly assume that this golden combination of favorable factors could last for the entire year. However, our statement that there is no reason why 2021 could not reach the same record profitability of 2019 still stands, and its credibility is certainly reinforced by today's results. As to all the other KPIs, the month of April was, to put it in short, as exciting as March. I'm not even commenting about the ridiculous percentile growth versus the tragic April 2020, but also in terms of the absolute figure, those figures bode well for a very satisfactory performance in the second quarter. As I said earlier, those companies in the water jetting sector which suffered from a weak order intake are picking up pace, and even the currency headwinds are expected to come down as the year progresses. A final note about M&A. As usual, we are not allowed to comment on the stakes or the timing of our next acquisitions, although I can certainly report in an appropriately tired and solemn voice that our M&A meetings are frequent, longer, and bustling with activity at an even higher level than usual. At this time, we are quite confident that 2021, on top of the expected healthy organic recovery, will bring new additions to our family. Now, this would be the proper time to do our best to answer any questions that you might have for us. Operator, please open the lines for the Q&A session. The first question is from Matteo Bonizzoni of Kepler Cheuvreux, p lease go ahead. Thank you, I have two questions. The first one regards the margin trend, which was really strong, increased 24.4% EBITDA margin in the quarter. This is not only higher than 2021, but also higher than Q1 2019, which was, I looked in my notes, 22.9%. From 22.9%- 24.4%, y ou have just said, l, that you are confident to repeat the same margin of the full year 2019, which means that there could be some room to yield that margin, which in full year was 20%-22%. Can you comment a little bit on the fact that this margin of Q1 could be containing some less positive factors, like the lack of commercial spending or any costly data which could affect as the year progresses? The second last question regards your acquisition pipeline, which really remains, it's obvious, an hot topic for the case. I had the feeling that over the last months that your M&A strategy, and you also commented that actually in the full year 2020 conference call, several of your M&A deals reflect larger than usual acquisition opportunities. Can you provide any comment which could be useful for us regards the evolution of your M&A pipeline and acquisitions? Thanks. Okay, t hank you for the question. I will take the first one, while Fabio will probably want to say something about M&A, which is occupying most of his life. In terms of margin expectations, we chose to be prudent in our comment of Q1 because clearly Q1 margin is uncharted territory, especially for some of our subsidiaries. We want to be a little bit cautious before we assume that this performance might go on. Indeed, we do have a couple of indications that some extra expenses are going to appear as the year goes by. Mainly you named the travel and the financial expenses. I would also add all those extra costs that are usually associated with our additional production in times of growth. We have gone through this many times. In our model, there is no advanced preparation for growth in terms of setting up additional capacity. In the first quarters of growth, and we've seen this in 2018 and many other cases in the past, we resort to borrowed or stretched or extended production capacity, which tends to come at a cost which is higher than the regular production capacity. Clearly, being at the inflection point, Q1 was the perfect situation where we were already benefiting from growth, but we are still working to increase a little bit some of the associated costs. This is the main reason why we are sounding more prudent than your own. Expectations might bring you. Certainly, exceeding the margin of 2019 is a possibility, and we are definitely not ruling out that possibility. However, it also depends on a number of factors that are, I would say, beyond our control. They are related to the trends in the market, they are related to what is going to happen in India, for example, which is still a developing situation, and so on. This is why, and I would say as often happens, we tend to be a little bit more cautious than what someone in the outside estimates. Time will tell who is right. Moving to M&A, I absolutely can confirm that M&A remains a major focus for Interpump in these days, in these weeks. I can also confirm that we are seeing a significant rebound of M&A activity after a more difficult year in 2020, because of two main factors. One is the recovery of the activities or the business in many of the industries that will make it possible to bet on a better set of numbers for the full year 2021 for many of the companies that we are discussing with. As a consequence, it will make it in a way easier and more appropriate to be closer or to match the expectation of the sellers of these companies. This is the first aspect. The second aspect is, of course, the logistics, because now it's in a way easier to organize meetings to visit companies and to restart the discussion that were already in discussion but put on hold in the last year. The first part of your question, Matteo, regarding the size, I can confirm what, and the comment that during the last conference call regarding the size and the availability of Interpump to discuss and to look at a bigger transaction or bigger acquisition. Bigger doesn't mean transformational, but bigger in comparison with what we have done historically as average size and in terms of turnover in particular. We have many deals on the table, we are progressing, and I'm very confident that we will deliver some very positive news during the course of the year. If I may add just a comment, something that Fabio, of course, takes for granted. This does not mean that we are neglecting our more frequent and more usual targets. Of course, we don't want to be left without any possibility in case the large ones do not reach the expected outcome. We are playing on both tables. Next question. Thank you. The next question is from Alessandro Tortora of Mediobanca. Please go ahead. Yes, s orry. Just some three queries. I have three questions; t he first one is related to CapEx. If you can confirm that Q1, the indication you gave during the Q1 conference call that the company at least is going to invest EUR 80 million this year because of, let's say, a low amount of CapEx in the first quarter. The second question is just a clarification on what you mentioned before, Luca, on the profitability progression over the next quarter. Basically, you are telling us that this was a very good, outstanding result of the company profitability in the first quarter, but we should see a normalization, considering also the return of some normal cost in your P&L. The third question is on again on M&A. Clearly, you are telling us the company is going to target bigger size deal. First of all, considering the deal size, which is EUR 50 million-EUR 60 million, maximum EUR 100 million. When you say bigger, you mean, I don't know, EUR 200 million, EUR 250 million of sales company target for you? Does the approach to integrate this company, this approach will change in the sense that from integration will be, how can I say, considering the size will be a little more complex or challenging? What's your view on this point? Thanks. Okay, I can take the first point regarding CapEx and M&A, the last one. Regarding CapEx, I can confirm the expectation of stay in the 4%-5% range and going in to something around EUR 80 million. In the meantime, the first quarter, we have not increased so much in comparison with first quarter of last year, the level of CapEx. It's important for you to take note and to take in the comment that the positive CapEx are for paid investments, and of course, we are paying now or we are paying in the first quarter investments made in the second part of last year. With all the problems related to pandemic, we were not a regime. We can expect a stronger increase in the next two quarters of the year, confirming the targets of our strategic plan. Regarding your last question, about M&A and about the size, and what I mean a bigger size, it is true that we have historically acquired companies that on average had the size of EUR 60 million or up to EUR 100 million, and I can say yes, that is true, that bigger means, let's say, EUR 200 million. What is important to note is that we maintain our opportunistic approach to M&A. We are maintaining our opportunistic approach without giving to ourselves specific targets of size, of profitability or market position and so on. What we are seeing now is that we have on our table, on our pipeline, dossiers and opportunities that are really interesting to us that are bigger in comparison with what we have seen in the past. We comment, and we remind that we will have a higher degree of possibility to close transactions that will be larger in size than in the past. Regarding your concern and your comment about the potential difficulties integrating these companies, I'm not completely in a position to agree, because I believe that it depends on the characteristics of this company. Even if we acquire larger companies, we will always go ahead in maintaining and preserving the independence of these companies. We may face the case in which these companies will be even more autonomous than the smaller companies that we are usually acquiring, because a larger company is normally more structured than the smaller one in terms of management, in terms of IT systems, controls of the numbers, and so on. I would not be worried so much about the possibility to integrate this company in a successful way. Fabio, just to make a follow-up on this. Can you confirm to us that from an evaluation standpoint, I am aware you mentioned in the past some inflation in terms of transaction multiple, but Interpump, let's say, will not pay a multiple or the multiple will still stay in a single digit, let's say, space? I would not define inflation. I would say that as commented in previous meetings, that we are ready to pay slightly more than in the past. Slightly means one point in terms of multiple or something like that. We are not prepared to pay 10x EBITDA or double-digit EBITDA multiples. Okay, y es. In terms of expectations for the rest of the year, well, indeed, in terms of EBITDA margin, I don't know exactly what I should add compared to what I said before. I think I said everything that I had to comment about the fact that taking a linear projection of the active speed of the quarter. Remember my initial comment that the active speed of the quarter was higher than the average of everything. The EBITDA margin of March was higher than the 24% that you see in the results. Clearly projecting that margin for the rest of the year would be impractical for a number of reasons, including that I have no idea of what might happen in the world, and if that was the case. However, projecting the margin for the first quarter, for the average margin for the first quarter, which already incorporates a mix of better and worse months, would only be nearer to organic expectations. Then, of course, there is the caution that needs to come with any statement that we might make regarding the expectations for EBITDA. EBITDA is something that we always fight for, but the actual outcome in terms of the decimal numbers is something that we find out at the end of the quarter, just slightly earlier than you do, but not in a very different way. I don't know if you have any more specific question about what we expect for the rest of the year, but I believe that most aspects have already been covered. No, look, Let's say it's okay, thanks. Okay. The next question is from Domenico Ghilotti of Equita SIM. Go ahead. Good afternoon, I have a few follow-up comments, first on the margin. I'm starting from raw materials. Clearly, I saw that in Q1 you had even declining impact on the increment of raw material on sales, and I would expect to see, let's say, a situation probably from the next quarter in which the price increases are fully matching or partially matching the increase in raw materials. I'm trying to understand if this is an area where you see some potential reason for your more cautious approach on the margins. The second, still on the margin side, in particular on water jetting, they had a very strong start, and particularly remarkable considering that the top line was basically flattish compared to Q1 2020 and also 2019. I also saw the EUR 3 million capital gain. I'm trying to understand if this is an area where these capital gains were contributing to the boost in profitability that is not reasonable to project also for the following quarters. That's okay for the margin. On top of that, just to know if you have any issue to mention about supply chain disruptions, something like that could prevent to exploiting further demand. My last question is on your comments regarding the pent-up demand. You commented that in your view, from the signals that you have, it's not just pent-up demand that is boosting the first quarter. I wanted to have some more color on what is behind your reasoning and your comments on this. Okay, f irst, the raw materials. Clearly, we do not have a crystal ball that will tell us what to expect from raw materials. Clearly, time doesn't work in anyone's favor. The longer this stretch of increases goes on, and clearly, the less effective our stocks made in the past will be. On top of this, in times of a very strong growth, our lead time, of course, increases, and this creates, even more delays before any price increases can actually show their benefit on our accounts. There is no alarming situation, t here is nothing that we think we cannot handle, but maybe not with the outstanding results on the same level on the first quarter. However, I would classify this under the file of general caution, without any more specific observation. In terms of water jetting, you correctly mentioned EUR 3 million of capital gains that were referring mostly to the sale of equipment previously used for rental. This is something that we have already seen a while ago, and especially has to do with NLB, our U.S. subsidiary, working with high-pressure pump systems. They have quite, I would say, significant, certainly more significant than other subsidiaries in the group, rental business. This means that now and then they are asked to sell the equipment, which is being rented out, and this results, if the equipment is older than six months, results in a capital gain. The increase seen in Q1 is significant. You spotted it very correctly. We know that at least in part, this is related to an increase in rental activities, which have been reported by NLB. This is not expected to be a one-off. It's not a capital gain that we got on, I don't know, on real estate or on something that we only have one piece of. This is at least in part, connected to a small change in the business model, which saw the share of rentals increasing. It is fair to expect certainly for the next quarter, and possibly throughout the rest of the year, that we will see more continuation of this apparently abnormal or apparently one-off item. In terms of disruption in supply chain, and I would also add transportation, I would say I'm happy to work at a company which is not registering any major disruption from this. Clearly, there might be an increase in cost here and there, which, of course, fall under the category of inflation in raw materials, so they would be passed on to customers. However, due to our business model, we manufacture from scratch from the raw materials or from general purpose components, which are very unlikely to be in short supply. Also, due to our local for local, generally speaking, business model, which requires much less shipping around the world than some of our competitors, I would say that we feel quite protected, quite out of these dynamics that have influenced very heavily the account and the expectations of some other players. Your last question in terms of pent-up demand, I know it's a designation that I use very sparingly, and now you just told me why I should not use it. However, in my view, a pent-up demand is a rapid fire, which might happen after a time of crisis or a stop of the market, basically presenting the cash after of the business for what was missed during the closures. This kind of dynamics would not come with an extension in the time horizon of orders. They would be all orders for yesterday, not the planned orders for the entire rest of the year. The timing and the order income, the quality of the order income, is showing that this is more than just customers or retailers trying to rebuild their inventories. It actually represents an increase in activity with expectations for this increase in activity, at least as far as our customers are expressing in their orders, expected to go on until well within the rest of the year. This is what I meant by saying this is not just pent-up demand by a structural recovery. Feel free to interpret that, or replace my wording with your favorite one if you don't believe that my description of pent-up demand is correct, t hat's the topic. Okay, fine, j ust trying to understand what would be driving your feeling. It's basically the timing, the order timing. When orders are placed with a longer timing, it means that our customer is a signal to us that our customers are expecting growth to last for an extended period of time, not to be a momentary situation as the catch-up for a lot of business. Maybe just to follow up on the profitability in particular. Have you seen, say, profitability growing across the board in the different companies or is it more a matter of different mix in terms of sales mix, let's say? I would say that actually, of course, I'm talking very generally here. Fabio may want to integrate with some specific observations, a lot of companies had their margins, let's say, disrupted by the irregularity of work in field during the pandemic. As the operations resumed normally with no interruptions, no surprises, even a little bit of planning, I'm referring to weekly planning or maybe monthly planning, that was possible again, most of them showed significant improvement for the same. This time, I don't expect the mix factor to be playing a major role. No, I would add to that, confirming what Luca just said, that the rebound in profitability is really well spread between the different companies and the different sectors and segments. That is really comforting and reassuring. Okay, thank you. Thank you. The next question is from Michele Baldelli of BNP Paribas, p lease go ahead. Good afternoon, everybody. I have a curiosity about the trends in Q1 in North America, in the sense that if we strip out the effects in the oil division, I didn't see that much growth. Also, I was wondering why, given that the underlying market should have been pretty strong. Well, we might wonder the same. It is not necessarily an answer to everything we might ask ourselves. You know that we basically follow the market and pay a lot of attention in listening to customers, and we certainly cannot force them to order. Arguably, the usual stop and go, which is connected to the election this time around, was longer than in the past. We saw that clearly in the monthly sequence of reports. I don't know, i t may be related, and again, this is a big hypothetical sentence. It may be related to the transition between the two administrations that was a little bit less smooth than usual. Apart from that, there is no particular indication that I might be able to offer. I don't know if Fabio, the U.S. subsidiary of the company manager, has received any hints about other reasons that might justify, let's say, less than expected, worse than expected performance of North American Q1. Again, I would like to reiterate that the Q1 average number doesn't do justice to the exit speed of March, which is of course what might drive the expectations for the quarter to come. Fabio, you have anything to add? No, nothing more to mention. Okay, thank you very much. Thank you. The next question is a follow-up from Alessandro Tortora of Mediobanca, p lease go ahead. Yes, t he follow-up is related to the question made before on the proceds from the disposal of these tangible assets. What is the reason why we should consider this a one-off in the sense that I can understand that availability of product could, let's say, shift a leading to a sale in this pillar, but why we should consider this trend may be visible also in the next few quarters as a recurring trend? Thanks. Well, we took a look at the sizes involved, and especially we spoke to the management, and they refer that they are actually actively increasing this share of their business, which means that the EUR 3 million that we see for Q1 does not represent the exhausting of an inventory of machinery that was used for rental and is disappearing. It is just an increase in their regular activity. As we speak, new machines are being built and manufactured for future rentals. This is an ongoing thing. It's not a one-off thing in terms that it is actually the result of action from management. Can you still hear me? I hear a beep on the line. Yes, Luca, I hear a beep, but it's not line beep, o kay. Ladies and gentlemen, please hold the line. The conference will begin shortly, t hank you. Please go ahead, t he line of the speakers are on. Okay, thank you for holding. Sorry about this technical inconvenience. Clearly, we spend too little on telecommunication budgets, and this is part of the reason for our outstanding performance. Let me finish what I was saying. This EUR 3 million apparently are not a one-off, but they refer to an affirmative action from management, which, let's say, turns the wheel a little bit more towards rental as opposed to sales. This is sometimes a management-driven operation, sometimes it's a market-driven operation, it's not entirely under our control. Here we see the confirmation by management of NLB that this is not over with the EUR 3 million that you see here. At least in part, we're pretty there. This is what I meant when I say not a one-off. It's not like we sold a piece of real estate. It's part of the regular activity. Okay, t hanks. Thank you. The next question is a follow-up from Matteo Bonizzoni of Kepler Cheuvreux, p lease go ahead. Yes, j ust a quick follow-up on this issue of the capital gain. I was looking at your press release. Do you confirm that the only way to detect this is to look at the cash flow statement in page 27 of your Q1 accounts, which in the free cash flow, there is EUR 3 million capital gain, because I do not see a mention about that in the text, but maybe I'm wrong. This is the first question. Regarding also the potential size of this capital gain going forward, I was looking that also in the free cash flow of 2020, 2019, there were capital gains respectively EUR 2.3 million in 2020 and EUR 2.7 million in 2019. Are also these capital gains related to the same kind of activity? Can you provide a rough indication on what could be the amount going forward, for example, for the full year? Thanks. Well, just to put things in perspective, if you go back one more year, they were higher than that. This tends to change from year to year according to the demand and even perhaps the financial health of customers. From our point of view, please don't be fooled optically by the fact that part of our earnings is reported as a capital gain, because to NLB, it is actually a very similar thing. If they sell a pump or if they rent a pump and it's sold during the rental, there are two dynamics which are very similar from a marketing point of view. They come up differently in the accounts. In the first case, you will just simply see the income from sales. In this other case, if the sale happens not more than six months after the beginning of the rental, it gets registered as a capital gain. It's the same amount that is jumping from one item to the other. It's not something that would increase or decrease the margins. As a matter of fact, this kind of compound dynamics of rental plus sale is actually a bit more favorable in terms of total net impact on EBITDA, because it comes with a higher margin. This is something that we have already seen. I think it was the end of 2016. Anyway, we've seen it in the past. The top line might look a little bit less exciting because the revenues are spread over a longer time. The total profit that we get from that particular pump are higher than compared with a normal sale. However, it's not a matter of that kind of contribution being there or missing. It's more like that contribution being there or being in revenue from sales, if you see what I mean. I wouldn't be overly obsessed with trying to preview, to forecast the future, how much they are going to increase. What I saw, and I confirmed that the relevant items were the ones that you mentioned in our statements. I would also see, I think I saw also an increase in investment into new equipment due for rental purposes, which should be the line after the one you checked. Maybe it would be worth to keep an eye on that line as well. I'm playing by memory. It went from EUR 2 million- EUR 2.9 million or so. I'm referring to the investments into systems that are planned to be rented. Okay, a ny indication for the full year after this premium or it's impossible? No, I believe that it would really be throwing a dice, because I have not a lot of visibility on what our customers preferences would be. Maybe we will have other talks with the managers of NOV and maybe they can provide a more visibility. Again, for the sake of financial modeling, those are revenues that may be registered as capital gain or registered as proper revenues from sales. This is not going to make a world of a difference. Is that okay? The next question is from Bruno Permutti of Intesa Sanpaolo, p lease go ahead. Yes, good afternoon. I have a few questions, t he first one relates to India. If you can update us of what's going on there in terms of your activity, give us a feeling. We know that India accounts for a little bit impact on your accounts. I would like to understand exactly what you see there, and also in relation to supply chain. The second one relates to net working capital. I would like to understand if the increase we are seeing in the first quarter is something that will continue in the next few months in relation to the pickup of the activity. In relation also to this, if you can give us a sense of what is going on in India at present. If you continue to see a potential increase in your monthly revenues, can you give us some color on this? Okay, I think I missed your very last question, i f you could please repeat it. Yes, it was related to the potential increase in the top line you saw in the first three months, i f it's continuing right now? Okay, w ell, first of all, maybe Fabio wants to comment about the net working capital. Yes, I was trying to keep secret the sensitivity numbers. In reality, the net working capital increase in percentage is not really different from what we have seen last year. What's important to note is that 2020, we have seen this crisis, how solid and how fresh is our net working capital. That means that we are able to reduce whenever some major change happens to the market, like 2020. Now it's normalizing back, considering the strong recovery in turnover. It's also important to maintain on our mind and on our actions this kind of flexibility. Also, in order to be able to catch the competitiveness of the market in terms of prices of raw materials in a moment in which raw materials prices are increasing, and in order to be sure to be able to answer to the rising demand in a moment in which for some raw material, there are scarcity or delivery issues. We always maintain this industrial approach, not looking at squeezing the last percentage point in net working capital, but maintaining our strategy flexible and adaptable to what's happening to the market and what are our expectations. In this period, we are seeing a strong increase in raw material prices in some of the raw materials that we use. To combine with the increase in business activities and turnover that we are seeing, that will continue also for the next quarters. We are not absolutely worried to put some extra million more on our inventory because of this. Okay. In terms of India, the situation, as I said before, is developing as we speak. The government, I'm referring especially to the state of Karnataka, it issues new regulations and changes on almost a daily basis regarding what is allowed and not allowed to do. I'm not aware whether today our plants are working. Last thing I saw, I heard, is that they were still working, had an obligation to close from the next day. Of course, as you can imagine, we were quite busy preparing the information pack for the results presentation, and I was not able to have a daily update. I expect really daily developments. What counts more for us is that India has shown that it was still in good shape and is able to jump up again as soon as the situation allows for it, and this was seen quite clearly in the Q1 numbers. That's the most important, and reassuring part. In terms of what to expect, well, this is a bit up in the air. I don't think that India will make the same mistakes that brought to the current new wave of contagion. Hopefully, the current lockdown, which was scheduled to last for two weeks, will be reasonably the last one or the last major one. I'm no expert, of course, in India matters, and so we'd actually wait and see what happens. What we know and what we can assure you of is that the state of health of our production facilities, and for what we know of our closest suppliers, is good enough to restart immediately without wasting time, as soon as the external circumstances allow for it. Okay, thank you. The last one, just was on the sequential monthly increase that you saw in the first quarter. If you are continuing to see it in that trend? What we can see, remember that at this point in the calendar, we do not see the monthly EBITDA margin for April, so I'm not aware of that. Every other indicator shows that April was a very, very good month, just like pretty much on the same level as March. I believe that by the time we publish our Q2 results, we will need, or you will need to probably catch up a little bit your estimate for the year. However, I wouldn't have any hard numbers to spend at this precise time, also because April is just 1/3 of the quarter, and we'll still have to see how May and June will develop. However, the quarterly numbers were quite good per se, but are even more exciting considering that they were all on an increasing trend from January to March. Sorry, I would get killed if I tried to attach any numbers to this statement. Thank you. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is a follow-up from Domenico Ghilotti of Equita, p lease go ahead. Yeah, just to be clear on, so when you refer to acceleration, you mean month-on-month. Month after month, you see that the top line is picking up and is growing, so it's not really something compared to 2020, to easy, or to 2019 is a sequential growth? Correct. Okay, thanks. Sequential growth, has to do with absolute figures because this is the year when relative comparison compared to one year ago are not going to make much sense either way. Okay, thanks. Thank you. Once again, if you wish to ask a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Mr. Mirabelli, there are no more questions registered at this time. Okay, thanks for attending. Our next results presentation is scheduled for August the sixth with the half-year results. We wish you a nice rest of the day and an even nicer weekend, and thanks again for attending, and take care, b ye-bye. Ladies and gentlemen, thank you for joining. The conference is now over, y ou may disconnect your telephones, t hank you.