Good day, and thank you for standing by. Welcome to the Prysmian Group 9 months 2023 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Valerio Battista, CEO. Please go ahead. Thank you very much, and good afternoon to everyone. Nine months, 2023 for Prysmian Group, the financial results. Let's move to the highlights, the following page. Almost EUR 12 billion sales, with an adjusted EBITDA of EUR 1,286 million, a 10.9% EBITDA margin. Not so bad, hmm? Free cash flow. Free cash flow, pretty good, EUR 729 million. To be noted that, in the first nine months of the year, we completed successfully both Vineyard and Viking. Consequently, two very important project successfully completed, because other than the others that are very important, now what counts is the execution and the real realization of the projects we got. Other than that, we have been awarded of EUR 13 billion projects in the first nine months, 2023. That is not a negligible amount of orders. Do not forget that inside these orders, there are also the frame agreements. Okay, let's flip to the page of the margins in the segments. Now, let's start with projects. EUR 1.438 billion are the sales, significantly higher than the... By 24%, organic growth. The results are better. The EBITDA of this segment, in the nine months 2023, we have been able to reach the EUR 210 million. So you have to have clear that the projects business is going for a ramp, not excessive ramp, but to a ramp of growth in term of sales and margins, that is, steadily consistent. That's what make me comfortable on the future of projects. Energy. Energy, on the other side, in the first nine months, grew by 0.4% organic growth. Looking at it, we have to consider that, the growth of the last quarter has not been brilliant, and that has to be recognized, but not because of us, because of the market. EUR 8.3 billion, sorry, EUR 6.3 billion sales last year, EUR 5.9 billion in the first nine months, 2023. The growth has been sustained by the margins in PD and the overhead lines, whereas the pricing normalization expected and ongoing in North America is there, but is not so strong in term of decline as it was supposed. Let's move to industrial network component. EUR 2.631 billion a year ago, EUR 2.583 billion this year, with an organic growth in the nine months of 3.1%. Here, what has to be noted is the margins. The margins are extremely good, 10.8%, versus the 7.8% of the previous year. Outstanding, I would say. Telecom. Telecom is the black sheep. Black sheep. Because of the crisis that is touching Telecom. Last year, EUR 1.14 billion were the sales. This year, around about EUR 1.2 billion. So with an organic decline of 13.7, the result as a consequence is down from EUR 221 million to EUR 162 million, with an EBITDA margin of 13.6%. The volume slowdown we are seeing today is mostly driven by the U.S. market or better. The U.S. market is the most difficult market today, also because we have to consider that last year, in this season, we were looking for an extremely sound market, especially in the U.S., and today is vice versa, a very low market. Overall, overall, Prysmian has reached almost EUR 12 billion, consequently, sales almost stable compared to the previous year, with a better margin. You can see 10.9% instead of 9.4%. Okay, let's move to the next. Project. The project has a very solid backlog and a very long visibility. The firm backlog, that includes all the projects with the notice to proceed and the advance, related advance payment, represent EUR 10 billion, that with the current speed, represent 5 years of sales. Of course, the speed of the sales will grow because the capacity is going to grow, is growing, and consequently, the duration of the firm backlog, the notice to proceed backlog, is going to be shorter. But in the meantime, we have also other EUR 10 billion, roughly, orders with a solid commitment. What does it mean, solid commitment? Means that we have an advance payment, a significant advance payment, or a contract with penalty in case the customer decide to cancel the project or to postpone over a long stop date, contractually agreed. What we have inside? Eastern Green Link 1 and Eastern Green Link 2, basically with National Grid in U.K., Marinus Link, the second interconnector between Australia and Tasmania, the frame agreement with Amprion in Germany, and the frame agreement with 50Hertz in Germany. Last but not least, the Clean Path New York energy projects. All of them counts for around about EUR 10 billion orders. We have in hand, we have a solid commitment, but we don't have yet the notice to proceed. So overall, we have EUR 20 billion orders with commitment by the customer, solid commitment by the customer. This year, 2023, in the first nine months, we got EUR 13 billion of new orders or preferred bidder award. That is a very significant amount of orders. Next, please. Now, orders are not mobile. Orders are not execution. We have to take care a lot of the execution phase. Vineyard Wind 1. You remember that Vineyard Wind is the first utility-scale offshore wind farm in the U.S. We have been, in the last three years, behind this project, and today, finally, we have completed the execution of our chunk of the project. What does it mean? The connection between the substation, the substation on sea and the substation on land. 154 km of submarine power cable that have to transfer the power from 62 turbines, going to be, going to generate 800 MW. Now, what's the problem we see today? That due to the mess that there is in, the offshore wind farm supply chain, especially in the U.S., the number of turbines already installed in the lease area is limited for the time being. They, the customers are installing the turbines, but they are late. Okay, the line is ready to accept the power delivered by the turbines. The total power of 800 MW will power 400,000 homes in Massachusetts, reducing the CO2 emission of over 1.6 million tons per year. It has to be noted that since the go we received by the customers, we have been able to execute this project in 20 months. That is not a negligible goal. Right. Telecom, the black sheep. But it's not the first time that telecom is harshly slowing down. The last time we have seen it, it was second half, 2019. I go by memory, but I should- That's correct. Very long, mm-hmm. After that event, in beginning 2020, the market, you see the white line on the graph, and the market restarted very hardly, very sharply. And now, second half 2022, downturn again, is the cyclical style of telecom business. It's not the first time, it will not be probably the last. The trend under the up and down of the market is a solid 4% CAGR per year. Not so bad. From the volume breakdown, is not very clear in this chart, I apologize. The most suffering set area is North America, in terms of drawdown. Because North America is traditionally very fast going up and very fast in going down, and this, this is the season of going down. We have to manage, simply that. Next, please. Let's have a look at the profitability across the regions. EMEA, EUR 4.6-4.9 billion last year, EUR 4.7 billion this year, obviously, with a different standard in terms of metal value. Organic growth, 1.1%, modest, but consistent. The EBITDA ramped up by EUR 100 million, from 268 to 350, with a 7.5% of EBITDA margin. Remember that geographically, it's excluded totally the project business. North America. North America went down in terms of organic growth, quite significantly, by 4.4%, with a EUR 3.5 billion turnover, coming from a EUR 3.9 billion turnover. So the decline has been significant in terms of physical volume and sales, but with keeping the margins pretty high. As you can see, 15.6% has been the margins in the first nine months, whereas in the first nine months one year ago, it was 14%. So the improvement coming from PD and the overhead line, transmission line, are offsetting the drop of telecom and the T&I price normalization. Other than EUR 14 million of negative Forex effect. Latin America. Latin America had an organic growth, slightly negative of 1.4%, with an EBITDA that moved up from EUR 95 million to EUR 102 million, with 10.4% EBITDA margins. What we can note there, that the T&I and industrial is improving in terms of margins, whereas the telecom is not, is negatively affected. Of course, the tendency is, in South America, is to be supplied, and the price pressure comes from the Asian players. Asia Pac. Asia Pac went down in terms of organic growth by 3.1%, but the results have been almost stable. You see EUR 68 million, nine months 2022, EUR 66 million, nine months 2023. So Forex didn't help. The contribution by YOC didn't help, but at the end, the result has been almost stable. Let's flip to the outlook. The outlook is confirmed. We gave you in the first six months—at the end, at the conference call of the first six months, a midpoint of EUR 1.625 billion, we can confirm it. Then there is a range, EUR 1.575 billion - EUR 1.675 billion. In that range, we will be, but what we see today is, mostly the midpoint. Differently is on the Free Cash Flow, because thanks to the very big order intake on projects, the Free Cash Flow is higher than the expectations. So we confirm the midpoint, but we see more the Free Cash Flow in the higher part of the guidance. That's it. Thank you very much, and I leave the floor now to Francesco for the financial results. Thank you, Valerio, and good evening to everybody. As usual, let me wrap up the main elements of our profit and loss statement. As Valerio anticipated, organic growth year to date has slowed down a bit to 1.5%, down from the 4.8% in the first half. The main reason for that is certainly the telecom business, in particular in North America. In the T&I, there were some quite unexpected elements, such as some softening of the volumes and the ongoing price normalization in North America. On the very positive side, on the other hand, I would certainly mention the strong growth achieved by the project business, and also the very solid organic trend in power distribution and overhead line and in the industrial business. Adjusted EBITDA is confirming a very strong margin expansion with an EBITDA margin at 10.9%, and this is fully in line with the exceptionally strong result of the first half, which was 11%. It's substantially the same level of margin. As you see in the box, top right, where we are bridging each single quarter with the prior year, the third quarter is, in our opinion, very solid. An adjusted EBITDA of EUR 408 million apparently is slightly lower than last year, but let's take into account that the negative impact of the Forex translation was EUR 23 million. So, considering this, I would comment, despite the very weak telecom business, which is quite evident from the table, this was a EUR 43 million drop of telecom plus EUR 5 million share net income coming from YOC. So despite the very weak telecom business in Q3, and despite the Forex effect, third quarter, which is substantially in line with the prior year. The progression of the project business quarter-on-quarter is very solid and very stable. Progression also in Q3 of EUR 19 million compared to the prior year. And likewise, it's very positive, the results achieved by the energy business above last year by EUR 5 million in Q3. I'm focusing my comments on Q3. Despite the fact that here, the Forex impact was certainly the largest part of the total EUR 23 million negative. Despite this, is EUR 5 million above last year. The reason is that the ongoing price normalization in T&I, mainly in North America, I would say totally in North America, is more than offset by the very strong level of margin expansion achieved in power distribution, in overhead line, and last but not least, also in the industrial businesses across all the applications, in principle. Let me go to the lower part of the profit and loss. A quick comment, maybe, on financial charges, very stable, as you see. That's very positive because it's stable, notwithstanding the very sharp interest rates increase. And this is thanks to our very solid cash generation, which is improving our liquidity, and at these times, liquidity pays off in terms of interest income as well. And also thanks to the fact that our financial debt is 75%-80% at fixed rate. This has been like this for a while. So we are very well protected. We have been very well protected against this rise of interest expenses. Tax rate, 28-point-something%, slightly better than last year, and I expect that this slightly better level of tax rate to stay in place for the full year. And as a result of all this, we are achieving the highest group net income ever at EUR 575 million in nine months, which anticipates a very solid result, net income for the full year, and which is absolutely consistent with the targets that we outlined in Naples related to the progression of the earnings per share as well, which is a very important target for us. I move to the balance sheet. To quickly comment that our very strong cash generation was certainly boosted by a positive dynamic of operating net working capital. As you see, significantly decreasing as compared to September 2022. Even focusing on the cash elements of the working capital, which are the ones driving the cash flow, the working capital reduced, declined, in particular, thanks to the very strong cash generation coming from the project business, thanks to the order intake and the very large down payments that we are getting, and which are absolutely expected also for the fourth quarter and also for the coming quarter, I would say. And we are also benefiting from a certain reduction of the metal price, which is deflating compared to last year, our working capital. Thanks to all these, you see that we have been, we have been able to take out approximately EUR 300 million from our debt, going down to EUR 2,073 million. We can move to the net debt bridge and the cash flow. As Valerio anticipated, the last twelve months, the free cash flow has been very strong, I would say even better than expected, EUR 729 million, excluding a EUR 34 million positive impact that you see on this slide, of the sell-to-cover related to the tax payments on the last incentive plan, which will disappear, by the way, in the fourth quarter, but it is already excluded from the EUR 729 million. For the full year, we certainly expect to be in the very high part of the guidance, say EUR 650 million is certainly a reasonable target. We will certainly have a significant amount of CapEx in the fourth quarter. You see that last twelve months and year as of September is EUR 505 million. These CapEx on a full year basis will most likely grow to EUR 580-600 million. And this explains why we believe that it is realistic to anticipate a EUR 650 million free cash flow for the entire year, which is slightly lower than the EUR 729 million last twelve months, September. Some very quick closing remarks. I think that our results here confirm the importance of our complete and balanced portfolio. You have seen some clear points of strength, the project business, the very sharp expansion in margins of the power distribution over the red line, industrial business. Some weaker spots, at least in this quarter, at least in the short term, like the telecom business. The strength is the overall balance of our portfolio, once again, I would say. Project, a very large and solid backlog, completed by very large amount of orders in hand, that, in our opinion, are as solid as the backlog, I would say, because they are backed by very strong capacity fees, reservations, by the down payments. So here, the name of the game is we need to focus on execution, and that's what we are successfully doing. Then the very strong performance in the power grid scope, power distribution, and overhead line, benefiting from solid market trends. And very important, maybe most important in terms of stability, is the capability to generate the cash, especially in this certainly a little bit more difficult financial environment than a few years ago. Thank you very much. I think we can move to the Q&A session. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now take the first question... From the line of Daniela Costa from Goldman Sachs. Please go ahead. Hi, good afternoon. Thank you for taking my questions. Two questions, if possible. The first one, I guess you put out that announcement regarding Shoals yesterday. If you could give us a little bit more detail on sort of what are the points that they're claiming, and also maybe help us size which business that relates to, and so that we have an idea. And then the second question, just more on the environment that is going on on tendering in terms of high voltage at the moment. Do you see any signs from your peers potentially getting more aggressive in terms of the conditions that they're offering, given some of them might have capacity available in 2024, even though the market is still very strong, whether that could have any impact? Not obviously for the business next year, but for tenders that will be executed in the outer years. Thank you. Okay, Daniela, thank you very much for your question. It was expected. Shoals. Shoals, we have had a long meeting yesterday evening with the samples, you know, to understand which, what are they claiming? Now, we have provided them cables. At the end, the PV cable is a pretty simple cable, that are absolutely in line with the specs. Then what they do with the cables, we don't know exactly. We know just because we have seen... We have had the access to one of their solar farm. The same cable we provide to them, we provide to other players, and we have some picture of the problem. I personally, that is my judgment, it is not a shrinking of the installation as they are claiming, but it's a problem that comes from, the tension they execute on the cable, including the connector, that pull out the insulation from the T connector. That is what they are claiming. In our opinion, there is no ground for the claim. Anyway, if they wanted to go to the judge, we are going to go to the judge. Finito. Maybe we can add also, Daniela, that we are talking about a business that has been worth for us $30 million. So the claim is related to three years worth of deliveries, whose total revenue for us, cable-wise, was $30 million. 10 million a year for three years. Then, as Valerio said, our cable is fully compliant, no shrinkage, deviation with respect to the specification, and it has to be added that the cable has been coupled with a connector and then created and assembled in a harness, and then installed in a solar park. All these three remaining activities had not been done in our control, because we didn't have anything to do with the installation or the connectorization of this cable. So we have definitely a solid case. We have already stronger evidence for our solid position is, and then just to put this in perspective, it's limited to a business that we classify in renewables, industrial, for EUR 30 million revenues, sales to Shoals in 2020, 2021 and 2022. Sorry, and what is the sale, the total sales of those type of cables? Wow! It could be as high as EUR 150 million over the same three years. So we sold more to other customers than to Shoals in the same period. Okay. Got it. But we don't see any reason for- Without any claim, sorry. I forgot to mention earlier. We didn't receive any claims from other customers than Shoals, and only 20% of the sites of Shoals were out of the transit sites, where our cable business is stored at Shoals, have reported this claim. So it's a very random issue and limited to a small portion of the sales delivered to Shoals, which are tiny; that is, per se, EUR 30 million only. Got it. Thank you. Environment of high voltage tender, I'll ask Hakan to give you our position or our perceptions. Okay. Thank you, Valerio. Thank you for the question. The high voltage tendering you asked about, some of the competitors have some capacity available. This is very limited to maybe one or two competitors that have capacity available for the short term. And in the short term, we are not playing in the short term market currently, because as Valerio was stating, we are already booked for a decent time more than five years. And for the long term, I think we are equal, and from that perspective, we do not see, let me say, extreme competition in terms of pricing. However, definitely, the risks in the very long term are different, and therefore, the prices cannot go down in the very long term because of the inflation expectations and the risk perception. Currently, we don't see extreme pressures, as you state. Daniela, we have to distinguish two tracks. The first one is the short term. In the short term, we have already booked our capacity till 2030, roughly. So we don't... And all the capacity booking is covered by advance payment or capacity reservation fees. That is not the margin, but is a significant part of it. So if customers are gonna change their mind, we will be entitled to the, to grasp the- Retain. To retain the advanced payments. What about the future? The future means for us, over three years. Now, with the the projects we have been awarded, there is not a lot of thing to be done because the market is closed. What can generate some doubt is the speed of the future projects. If the future projects will continue with a similar speed of the actual one, because No, no, no, no. Contract. The contract- For frame- We have signed. The frame contracts have booked the capacity for quite a long time. There's no way. In the future, we have to see if there will be sufficient projects to continue to have a full saturation of the growing capacity. That's the tricky point of the business today. But just to add, next year, we are seeing still, a big, let me say, request. And, this request is significant, as Valerio said, but the capacity, is relatively, let me say, booked, and therefore, some projects may slip, but the tendering activity is still very vivid and very strong. And next year, we are still expecting a very strong tendering activity. Clear. Thank you. Thank you, Daniela. Thank you. We will now take the next question from the line of George Featherstone from Bank of America. Please go ahead. Hi, everyone, good afternoon. Thanks for taking the questions. First one would just be on the EBITDA guidance, which appreciate you confirming around the midpoint, but that would ultimately imply essentially, your weakest quarter since the beginning of 2022. So just wanted to understand what's driving that. Is it just telecom weakness into the fourth quarter? Hi, George, Francesco speaking. In principle, it's embedding a fourth quarter, which is in line with last year. You are right in on that point. And in principle, the reason why we are not exceeding last year is the prolonged weakness of the telecom business in North America. Simple as this. The midpoint is—was already our idea in as the most realistic outcome in terms of adjusted EBITDA. On the negative side, we had in the second half, certainly the telecom business, but on the positive side, compensating this, we certainly had the margin expansion in the energy businesses, such as the PD, power distribution, and the industrial business. We had also, Valerio mentioned, this, a price normalization in G&I North America, which in a way is happening, is ongoing, but at a pace which is slightly lower than we anticipated a few months ago. And this is, in this quarter, compensating the telecom weakness and is delivering the same midpoint that we had already in our mind. Okay. So it sounds like just from that, you're effectively saying telecom's worse than you expected, but the T&I normalization better. Is that the right way to read it? And also some other elements. Also the projects, I believe, is slightly better than expected. Already strong, was already strong, but even better than expected this year. And also the margin level, which is holding up, for instance, in the industrial business rather than in the power distribution business, is even slightly better than we expected. So we have a few elements on the positive side, and then I think it's fair to say that the short-term drop of the telecom business was sharper than expected. Okay, thank you. Next one would just be on the power grids development. Just if you could help us just with an update on, on what you're seeing by region, Europe versus U.S. George, Massimo speaking. We see a start from the U.S., a stronger, strong demand that we are coming out in terms of additional capacity to satisfy. This strong demand is continuing through 2024 and through 2025, to the point that we decided also to further expand the capacity for a second wave of investment. Price is now holding up nicely, because in the end, in 2022, we had been spending much time, many efforts to renegotiate a firm price agreement contract with new cost price adjustment clauses. So profitability, so the margin per kilo, per ton, whatever, has increased. And so now in North America, we see a nice process of a high price, high margin, and consistent volume growth. Also backed, as we said, sometimes by customer down payment, so solid commitment of customer to underpin the need of buying these cables while the capacity will be upstream, up and running. In Europe, we have a scattered situation. We have a strong demand in many countries like North Europe, like Central Europe, and Spain, with some areas or some pockets of weakness in the market, definitely France and also Italy. U.K. is holding up nicely. So we have a mixed situation, but all in all, also in Europe, we see volume growth and price consolidation. Thanks again to the renegotiation that we concluded over the last 18 months. You will see this, visible at the end of this year, in the full year result of 2023, once we have isolated with the new segmentation, the power distribution business from CNI and the other businesses. All right. Thank you very much. Thank you. Thank you. I didn't mention, George, the other area, but LATAM and Asia Pac continue with a solid and stable demand. We will now take the next question from the line of Akash Gupta from J.P. Morgan. Please go ahead. Yes, hi, good afternoon, everybody, and thanks for your time. I have a few as well. The first one is on telecom destocking, and, if I understood correctly, it was ahead of your expectations, and which is why we are at the midpoint and not towards the upper end of the range. The question I have is that, given that we have a much, faster pace of destocking than anybody was expecting, does that change the timing of recovery? i.e., can we see your telecom coming back to growth earlier than what you were previously communicating? So that's the question number one. Hi, Akash, Valerio speaking. Let me try to give you a preemptive answer, mm? I personally see telecom, because I've seen at least five cycles, negative and positive, of telecom in my career, that this slowdown has been stronger than the past, faster than the past. Why? Because this time has touched harshly U.S. And as we know, U.S. is very quick in going up and then going down. Does this change the timing of recovery? I prefer to leave the floor to Philippe about this matter. Hi, Akash. I think the first thing is, of course, we confirm that the trend mid long term will be there. Second, the destocking. The destocking is still, is ongoing, and is ongoing at the pace of the installation capacities that we have in the US. What we have seen, certainly is that the government incentives are going to come from mid-next year to early 2025 and play a role during this period of time. And so these two elements, the destocking ongoing and the incentives, makes me think that we have to be careful for the first half of next year, and we can expect the market to rebound from the mid, from mid-next year onwards. There is another element which is important. It is, of course, the interest rates in general. If the interest rates release a little bit of pressure sooner, it will have a positive effect. If they remain high, longer time, it will have a slowdown effect. That's what I can say today. I think we have to be careful in the first half of next year, and then the market should come back. I just want to add, Philippe, that, Akash, that, all these three elements are important: the destocking, the delay in the, federal funds for subsidizing the projects, and the increased cost of capital and cost of projects, for the time, the fiber domain in the United States. We had anticipated this trend to happen. We anticipated these three elements to come and affect the long term. So that's in the capital market, that is those three elements being considered for the trajectory of the telecom business from 2023 onwards, from 2024 onwards. So we're not taken by surprise, but of course, the recovery per se, of the telecom business will take, not maybe the usual time, a little bit longer. Until the second half of next year, we will not see the funds released by the government come into play, so they will not have an effect in the project starter. Only after second half this year, we'll see this happening then. Absolutely. Let me just add one last thing, is that during this period of time, of course, what we are doing is to work on our cost base and to make ourselves more efficient, to get fitter and ready for when the business will come back, which is what we always do. We take that opportunity now to do it with a lot of focus in order to be completely ready when the business will come, will come. I see next year, second half, the possibility for the telecom market to revamp sharply as did two years ago. Thank you. The second one I have is on the timing of share buyback, as you announced that you will be looking to do share buyback as part of the medium-term financial plan. Clearly, you will be generating a lot of cash flow in Q4, towards the upper end of the range. Can you tell us about when you may start share buyback? Thank you. Better not to tell when we will start, I would say, but in general, I'm quite confident that we will start next year in 2024. The current share buyback program, by the way, in April next year, the EGM will hopefully approve, as always done in the past, and as usual, an 18-month buyback program, and then it's up to the board to decide when to launch the individual buybacks. But I would say that, if everything is confirmed in terms of results and cash generation, as we expect, we will, the board- Thank you. And final- Yeah, go ahead. Final one is on housekeeping on IFRS 16. I see in your bridge that it is now EUR 143 million on rolling 12 months basis, and it used to be much smaller number from my memory. So maybe if you can tell us what is going on in here, and what shall we expect for 2024 and 2025? Thank you. No, I think this year we have a particularly high variation. You are right in noticing that. It's specifically due to one basic decision that we have taken, relating to the extension of the lease agreement on a installation vessel, that it is not owned by us. It's a third-party installation vessel, but that for us is a very efficient and effective asset. So we had the commercial opportunity to extend the duration of that lease agreement, and we took that opportunity, and of course, this is bringing a benefit in terms of results, but is also increasing a bit the debt. Specifically, I think to remember that the impact of this specific item on the IFRS was like EUR 80 million. Yeah, EUR 70-80 million. You should expect this addition of debt in the next years to decrease from the current level. Certainly to decrease. Thank you. Thank you. We will now take the next question from the line of Sean McLoughlin from HSBC. Please go ahead. Thank you. Good afternoon. A couple of questions from me. Firstly, just coming back to offshore wind, it's clear that you told us at the capital markets day, overall, exposure to offshore wind. I mean, clearly the situation, and particularly in the U.S., looks to have deteriorated. I wonder if there's any, you know, how you're thinking today about Brayton Point, and about your CapEx expansion in the U.S. And secondly, if I understood correctly, you're talking about price consolidation in power distribution. Just to understand a little bit more, what that means. Does that mean that prices are continuing to increase? Thank you. Hakan is going to give you the answer on offshore wind. Okay. Sean, thank you for the question. The offshore wind in the U.S. is, let me say, definitely in a situation where everything is redefined. Let me explain you this, why? Because of the inflation. Inflation has increased significantly, and therefore, the PPAs that was agreed before the inflation are no longer justifying the offshore wind investments. So therefore, the offshore wind developers are renegotiating their PPAs. And, you know, to legalize these renegotiations, the best is to re-tender the, let me say, the PPAs, the agreement. So therefore, this is happening. It is not that these projects are not viable, that these projects are going to be canceled, but these projects are maybe going to be owned by different developers and are going to be supplied by different developers in a different time frame. So, the good news that has happened, maybe it was you were able to see, especially after the New York bid, the price that came out of the New York bid is justifying offshore projects in the U.S. They are beyond $140. This is official numbers that you can see in the market. And this is good news for the industry that you know the utilities are seeing the necessity to go forward with the renewable energy project, and they are willing to pay higher values due to the inflation situation that we are facing. So I think the delay is there, so there is no question about it. But I am seeing in the market many concerns that this is going to have a significant impact on the future of offshore wind in the U.S., which is not correct. I don't see that as of today that this will happen, especially with the justification of the New York bid. Now, coming to the other question, is a question that is a little bit more that we have to evaluate internally in order to give a concrete answer. Of course, the prices and the costs are increasing, and we are under the evaluation in this matter. I don't know if Massimo would like to- Can I take the point? Of course. Okay. Please. Just in case, today, I informed the board that the cost of Brayton Point, due to inflation and the cost increase, has risen. But we want to proceed. We will resubmit the proposal to the board with the new cost and the new margins of the project sooner, very soon, in order to get the approval for the new amount. But Brayton Point is not under discussion. Brayton Point is a firm pillar of the strategy of the group. That's it. In fact, also, this increased cost, shown, was already factored in the EUR 2.7 billion of CapEx for the next five-year plan, as we disclosed at the Capital Markets Day. So nothing new, nothing new. No changes to our program, and there is a slight heat up in the American market, but the reason why we do our investment there go beyond the prospects of the American market. So we will continue with our plan. That's it. Second point, the price consolidation. Yes, probably, yeah, that is for me, probably. Consolidation, I meant that after we re-negotiated price agreement with all the frame agreements in 2022 across all utilities custom in North America and, and, Europe, we consider the level of prices, kind of stabilizing in the market. And now, eventually, to cope, to cope with the further inflation, we have clauses in those contracts. So I consider more the price consolidation, the right term is a margin consolidation. So the level of margin that PD has achieved in 2023 is, in our view, solid and stable through the next few years. Very clear. Thank you. Thank you. Yes. Thank you. Thank you, Charles. We will now take the next question... From the line of Miguel Borrega from BNP Paribas Exane. Please go ahead. Thanks for taking my questions. The first one, just on ENI. So sales were down about 8% in Q3. Can you share how much of that was volume and pricing? Last quarter, I think you talked about pricing in North America was down 5%-10%. Can you update us on that? And maybe give us some color on the expectations for Q4. Do you see distributors still destocking? And then looking into 2024, do you think pricing will continue to fall? That's my first question. I think we answered to this question at the Capital Markets Day, Miguel. We said that we will see $100 million this year of price normalization in the USA, and this $100 million will also happen next year. So the overall net reduction will be $20 million over two years. We've seen some slight moderate slowdown in the price normalization in the last few months, but in the end, there is a subtle balance between price and volume. So if you hold that price too much, we lose volume and the other way around. So maybe I don't know the answer about how much of the 8% is due to price, due to mix and volume. Most of it is price, anyway. So this, 5%-10% price normalization that we mentioned a few months ago, has continued along the trajectory that we mentioned, which will drive EUR 100 million over two years in terms of margin reduction. We assume, Miguel, we have lost, we are going to lose EUR 100 million margins on ENI this year, and we are going to lose another EUR 100 million margins next year. Maybe the comforting element is that in the end, we don't expect at the end of next year to be back at the level of prices we had prior to this surge in profitability. So we will retain a good portion. Don't tell you now what this portion is, but we will retain a good portion of the marginal side that we gained in, we earned, more than gained, in 2022. And then secondly, on projects, can you give us some color on that EUR 20 billion backlog? How much of that, within that, the EUR 10 billion, the firm backlog, how much of that will hit your P&L before 2026? I just wanted to understand if until 2026, everything you will produce is already in the backlog, or do you still have some spare capacity, among the existing capacity? How much of that EUR 20 billion backlog will come after 2026? Miguel, I will tell the answer, so give me a kind of second, just to be consistent with what we told in the past few weeks. Out of EUR 20 billion, we will consume, consume EUR 13 billion to satisfy our revenue from now, 2023 through 2027. So there will be EUR 7 billion worth of orders left at the end of 2027, which will mature in 2028 to 2029, 2032. Then talking about the spare capacity, we still have some limited room or capacity, mainly in 2026 to 2027, according to the current phasing of this project. So we can still accommodate some projects, not many. But also the market of 2024 and 2025 is gonna go and award that project, whose execution is gonna go well beyond 2028 and 2029. For the obvious reason that all of us, not necessarily Prysmian, Nexans and NKT, also the other players, are fully booked through the same period of time, with some little exception for a competitor, which I cannot name, all the others are fully booked. Not on the existing capacity, but also on the planned capacity that all of us have decided to unlock in the next three to four years. Did I answer, Miguel? Thank you. And then the new plan, Brayton Point, is there a risk that utilization is gonna be lower than you expect, or is it still all according to plan, once it ramps up, you're gonna be fully booked on that plan? No, no. Miguel, the utilization of submarine plant is what we care the most, because the factory, the submarine plant not saturated is a big deal of a problem. So, we have such a level of order in hand and such a strength in the market that we will not suffer at all, or saturation of this plant. At least for the next five years. Can I- Yeah. I would like to add, Miguel, that currently we are still discussing, of course, the commitment you have heard from the management about the Brayton Point. And we are also parallel to that, you know, discussing future sales through that plan. I cannot say that this is firm orders or firm, let me say, order entries, but I can say there is a significant potential that is coming up beyond the projection that we have done. However, of course, we are also watching carefully the U.S. market, and we are also watching, you know, the inflation effect and all this. But I don't think at all that the utilization is going to be low. Thank you. That, that's helpful. And then last question, on telecom, I've seen the bridge on slide 11, the delta in EBITDA was EUR 43 million from Q3 to last year. Can you share the impact specifically coming out of a weaker market in the U.S.? And then maybe something we haven't talked about in a while, how is pricing in Europe post the anti-dumping case against the Chinese players? Has it recovered, anything? Thank you very much. Philippe? I'm not sure I understand your first question, Alice. 32 million less than Q3? We have EUR 32 million lower in charging- Yes, for sure. How much of it is U.S.? Two third. Yes, uh- Two-thirds is U.S. Two-thirds are U.S. Yes. Of course, this, this is clearly, clearly the answer. Then on the anti-dumping. On the anti-dumping against, let's say again, Chinese. The Chinese cables, on the Chinese cables, that was recently doubled, as you probably have seen, from 40% to 80%, because they were convening. We have seen the quantity of imported cables from China into Europe stabilizing. The mar- the market share of the Chinese players in the U.S. have stabilized. Meaning it, On EU. Oh, sorry, I said US, sorry, on the EU, has stabilized and, leaving more room to the local players, obviously. Some of them also have invested in European plants, creating European jobs as a consequence of that. So, there is an impact for sure, of the anti-dumping. Is that answering your question, Miguel? If pricing continues to come down, Yes. On prices in Europe, the anti-dumping didn't stop the price pressure, I have to say, that we have in Europe. Especially because inside an optical cable, there is an optical fiber, which is a big chunk of the cost of the cable. The optical fibers coming from Asia are at low prices, and they have an impact on the price pressure in Europe. But we are used to this. It's not new at all, and it's already factored in all our action plans. So nothing new here, I would say. Thank you very much. You're welcome. Thank you. We will now take the next question. From the line of Alessandro Tortora from Mediobanca, please go ahead. Yes, hi. Good evening, good afternoon to everybody. I have three, two questions, if I may. The first one is related to the clearly we discussed, let's say, before the pipeline on wind offshore in the U.S. Can you comment a little bit on the interconnection side, clearly the you mentioned before Clean Path, but for instance, can you give us also an update on a project like SOO Green, that clearly we saw in the past? So just understand what's going on on let's say the pipeline, excluding the wind offshore in the U.S. That's the first question. Thanks. Okay. Hi, Alessandro. Good afternoon, good evening, actually. The interconnect in the U.S. definitely are an area which is, as of today, very much tied to the renewable energy, and- Mm-hmm. Renewable energy onshore and renewable energy offshore. So the renewable energy offshore, you know, all these delays is affecting automatically also the interconnects of the offshore part. However, when we are talking about specific projects like Clean Path, Clean Path is not only a interconnect or a transmission project, but it has also generation behind. So therefore, you have to put this into the context of the full generation. And I can say that these projects are very solid projects. The discussion here is that, you know, the same, the PPAs that has to be reformed, and this is what is happening currently. It is very difficult, as of today, to tell you for certain these projects timing, but there will be some delays. But I don't see this happening affecting our, let me say, capacity utilization as of today. This is what I can say. On the other hand, this will definitely form within time, and we will see this. So green, on the other hand, is more based on the land onshore developments, and the long land onshore developments are relatively more mature. The only difficulty here is that, you know, the overloads of the authorities of these connections, and how these projects are affecting the overall loads on the system in the U.S. This is the one question, which is evaluated by the local authorities like PJM. The second is, of course, they have to make the financing because these are development projects, and this is also supported by the government and also by private investors. Therefore, I can say that interconnectors in the U.S. are not like the interconnectors in Europe, which are driven by the majority by the TSOs, but are driven more majority by the- Mm-hmm ... developers. And these bring some certain difficulty, but I do not see these projects as a risk. I see that sooner or later, these projects are going to happen. The time is the matter. But if we talk about the interconnect in Europe, they are very solid. There is no question. Okay, thanks. Then the second question is on industrial cables. Clearly, you commented before very good profitability of this business. Can you help us to understand the underlying drivers behind this this profitability? Because clearly we spent a lot of time on, let's say, P&I, price normalization. But how do you see going forward the profitability of this division, which clearly has a degree of diversification, which is much bigger than, for instance, DGNI. Thanks. Actually, inside this, industrial space, there is, renewable, which is, driven by the same drivers of the energy transition. So there is solar, there is, wind offshore. So there is one element of this, infrastructure investment on, on, on new equipment. There is a rolling stock, railways, cables. So, you know, many, countries are investing in, infrastructure, centering. There is, EV, EV charges, there is a piece of data, data center. So there is a lot of, electrification in mining, mainly, which is another driver of, growth, associated to the energy transition. So now, you need to be aware that there's a specific segment where solution are bespoke for customer, where we design cable for specific application. So price is not normally a big deal or an issue because we have to serve customer with bespoke products and with short lead time. So there is less reluctance from customer to accept price increase in this space. Okay. Okay. Sorry, Alessandro. We can say that, due to the inflation we have seen in the last two years- ... we have been able, especially for the industrial, to adapt the prices to the new costs of the materials. We have been able to keep the additional margins related. That's the substance of the profitability of the division. Okay. So it is fair to say that, let's say, clearly we cannot totally rule out the scenario of, let's say, some, some price normalization, but clearly, it is a completely different situation compared, let's say, to 2029. No, we don't see any price normalization at all in this space. If you look at it, I mean, you can look at the trend of the last three years, so there's been a constant growth. Mm-hmm. Okay, okay. And then the last question is, sorry, on financial charges, net financial charges, actually. Let's say, well below. If you can give us an idea of, for the full year, a certain level of financial charges for the full year. Thanks. For the full year, I would say total financial charges in the EUR 100 million- Mm-hmm. 105, and if you take the line of the net interest expenses, between EUR 80 million and EUR 85 million. Okay, thanks. Thanks to you. Thanks, Alessandro. Thank you. We will now take the next question from the line of Monica from Intesa Sanpaolo. Yes, good evening. Can you hear me? Yeah. Yes, we can. Go ahead. Yeah, good evening, everyone, and thanks for taking my question. Most of us have been already answered, but I have two. In the projects business, I remind during the last call, the first half, that you were indicating a roughly 12% margin for the business for the current year, if I'm not wrong. So do you confirm this level, or there could be some upside on this previous indication? And my second question is on the Forex impact on the adjusted EBITDA for the full year, if we can expect a further impact in the fourth quarter. And for the net working capital, the free cash flow is usually benefiting from the advanced payments on the orders you have. I was wondering, how do you see the net working capital trend beyond 2023, given that you have already cashed in a lot of advanced payments? Thank you very much. Thank you very much, Monica. Let me try to give you an answer, but under the control of Hakan and Massimo. 12% margins is confirmed. We strongly believe that the 12% is a proper level of margins with the market of today. Can there be an upside? Maybe, but I wouldn't, I wouldn't put on the table right now, mm? Mm-hmm. Forex. Forex, we set up, set it up. Our expectations for the Forex at 1.07. Yeah, so let me take this one, Valerio. For the remainder of the year, we set a range from 1.25-1.10, so I think that you are totally correct. And for the fourth quarter, we should expect another negative impact, because at the end of 2022, the dollar was slightly stronger than now. Mm-hmm. And, so I would assume another impact, another impact, EUR 10 million, say. EUR 10 million. Okay. And for the net working capital- Yes, very, very clear. Let me say that beyond 2023, we keep being very confident on the pipeline of new projects and new orders, the resulting down payments. So certainly for 2024, certainly for 2025. Then, of course, and this I was commenting also in Naples, in the maybe in the last two years of our plan, we will see a more balanced ratio between the down payments and the growing working capital related to the acceleration of the execution. Execution of projects will accelerate even before, of course, even earlier, already, already now, already in 2024. But maybe prudently, we were factoring in the very last part of our five-year plan period, a certain level of decline of down payments, because, of course, with such a long- Yeah, for sure. It is difficult to... And this was bringing the net working capital profile of projects more in equilibrium and more, more, more in balance. Okay. But, we are certainly very confident for the next two years in terms of, down payment. ... Thank you, Francesco. It was just to check on what you said on Naples, but just, just to be sure. Thank you very much. Thank you very much. Thank you. We will now take the next question. From the line of Gabriele Gambarova from Banca Akros, please go ahead. Yes, thank you and good evening. My first question regards Telecom. The organic slowdown for, let's say, in Q3, was very, very strong, -29%. So I was wondering if we should assume a similar intensity in Q4 and possibly in the first half of 2024, or there will be an easing of this, let's say, fall? And the second question is on CapEx. If I understood well, you said you are going to invest EUR 580-600 million in 2023. So I was wondering if there was any specific, let's say, investing initiative on which you accelerated? Thank you. Mm-hmm. Okay. Okay. First question, the organic slowdown has been very sharp in Q3, and that's clear. We see, I personally see a similar intensity in Q4, but- Because it's, it's a comparison over the last quarter, quarter three. The last quarter of 2022 was pretty good. Consequently, the slowdown or the decrease is expected to be on a similar shape. On a sequential basis, no. In the sense that quarter one, quarter three. In quarter one, next year, we expect to have a definitely better comparison. Yeah. Maybe, yes. Yes and no, because the point is, if you're concerned, Gabriele, is that with this business, we continue to slow down quarter after quarter. No, we see there's a kind of bottom, because quarter four level of activity is similar to quarter three. Then, of course, when you compare quarter four 2023 to quarter four 2022, you have this big organic decline. And also, when you compare quarter one 2024 with quarter one 2022 and quarter one 2023, sorry, we still had some stronger- Yes. -results. So, but the bottom, we think we reached. Then the comparison, it depends on what you're comparing it to. Yeah. Let's say that the organic growth will start to improve in the second half of 2024. Because, of course, we will compare with a very low already Q3 and Q4 of 2023, and we'll bring an improvement. This is correct. This is correct. Yeah. Then, with regard to CapEx, what we are thinking of accelerating our investment in projects. We cannot be more specific, because we still have to, I mean, complete and conclude some negotiation, but we are accelerating CapEx for supporting the capacity, manufacturing, installation, expansion in projects. Okay. Thank you very much. Thank you, Gabriele. Thank you. There are no further questions at this time. I would now like to turn the conference back to Valerio Battista for closing remarks. Thank you very much, and thank you very much to everyone who has participated to this conference call, and next time it will be the fourth quarter results on the full year. Thank you all. Bye bye. This concludes today's conference call. Thank you for participating. You may now disconnect.