Good day, and thank you for standing by. Welcome to the Prysmian Q1 2025 Integrated 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 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, Massimo Battaini, CEO. Please go ahead. Morning. Good morning, and welcome everyone to the earning calls of Q1 2025. We are really off for a great start in 2025 with an EBITDA that hit EUR 527 million, well ahead of last year, even if you consider the EUR 95 million extra perimeter due to the Encore Wire consolidation in Q1 2025. The EBITDA margin, which you see at 13.1%, is reported according to the standard metal prices. Those are the metal prices based on the average of metal, copper, aluminum, and lead prices in the 10 years preceding 2019, which you know very well because they are normally reported in the appendix of the analyst call. The organic growth was fantastic, 5% EBITDA, certainly driven by transmission, but also supported by stability in I&C, in Power Grid, and growth in Digital Solutions. Free cash flow also standing at EUR 1 billion for the last 12 months. ESG performance in line with expectation, - 37% risk of one and two reduction versus the baseline. I remind you that our target for 2025 is to achieve a list of 38%, so well on track to achieve it. Net zero is confirmed, accelerated by the end of 2035. Revenue linked to solution sustainable is high as 43%, and we have a significant improvement in the recycled content of copper, mainly recycled content of material, with this 19% trending basis point up on the average of last year, thanks to a significant availability of copper waste in our U.S. perimeter, which Encore Wire took advantage of. Moving to transmission, I mean, all KPIs are super great, super satisfactory. The organic growth, in particular, is 60%, never been that high. It is certainly driven by some extra activity, not necessarily coming from the extra capacity. We had only additional capacity in terms of one installation method, Monna Lisa, that joined our fleet at the beginning of this year. As far as manufacturing concerns, we are more or less the same as last year. The capacity improvement will happen in a certain part of this 2025. EBITDA-wise, there is a significant surge from EUR 60 million to EUR 124 million. EBITDA margin from 13% - 16.9%. Talking about current metal prices, you see the margin underneath the bar chart. We are at the famous 16.6%, which is already itself ahead of what we committed to achieving in 2025. 16.9% is sustainable? Yes, it's super sustainable. We will end up at the end of this year with a margin slightly ahead of the 17% + for the full year. The important reason for the EBITDA increase to EUR 60 million is, on the one hand, we really had this quarter an impeccable execution during the installation and manufacturing activity. We benefited from projects with better margin than last year. Last year, on the contrary, we had some cost overruns that hit particularly badly Q1 2024. Sequentially, you see, despite this not supposed to be the stronger quarter in the transmission space, Q1 2025, sequentially, we also had both in absolute EBITDA and in margin terms ahead of Q4 2024. The backlog remained pretty high, EUR 17 billion. We count on some additions that we should see this year coming from IPTO Frame Agreement and National Grid, but in Q2, Q3, we see what will happen in this regard. Power Grid, we are pretty flattish, slight decline in organic growth, more related to the tough compensation with Q1 last year. We also had to account for some, I mean, bad weather impact in the famous U.S. footprint in Q1, which also affected the I&C business. There may be some wait-and-see situation within the U.S. space, given the current tariff and dynamic happening in the markets. EBITDA-wise, we are in line with Q1 2024. In terms of EBITDA margin, I think here is a way it is where you can best appreciate the more effective way to read the profitability. If you look inside the bar chart, you see an improvement in EBITDA margin at standard metal prices from 14.8% Q1 2024 to 15.2%. If you look at, on the other hand, at the current metal prices, they will then move from 13.5% to 13.3%. This is the effect of dilution in Q1 2025 due to the incremental value of metal in our revenue. That's why the standard margins are the best to appreciate the real inherent and genuine profitability of the business. Sequentially, we confirm profitability stability, 15.4%, 15.2%, and also stability in EBITDA, absolute value. Industrial construction, also here, pretty flattish in terms of organic growth. The comparison year- over- year is a bit difficult to appreciate because Q1 2024 was without Encore, while the EUR 173 million of Q1 2025 are with Encore. If you normalize Encore and you consider proforma Q1 2024, you should read 114 as 208. We confirm that we are EUR 35 million below Q1 2024 proforma. All of those EUR 35 million belong to January and February U.S. March situation is completely different. The EBITDA margin has significantly improved to the point that maybe we can also anticipate or share with you what April looked like. April margin are well on track, back at the level of 15% +, which what we used to have in Q3 last year, the first quarter of the acquisition. U.S. situation seems to have been resolved. It was a one-off impact due to the bad weather, due to the surge in metal prices, due to the weakness of the market and some pricing behavior of different competitors. March has restored the previous trend in April and set probably one of the best months ever in the Encore Wire perimeter I&C North America. Specialties, sequentially, we show a significant improvement, EUR 59 million Q4 2024 turning into EUR 74 million. EBITDA margin standard metal price growing a couple of points. Year on year, we are still down on the strong Q1 that we had last year. We have also a deep comparison in Q2, where Q2 last year was pretty strong, but the EUR 74 million of Q1 2025 is paving the way for strong growth in Q2 and the coming quarters. Digital Solutions finding a significant improvement. Digital Solutions organic growth posted at 3.4% year- over- year, EUR 32 million turning to 42. EBITDA margin significantly improved from 10.8% - 13.2%. We are still not benefit from pricing recovery in the market, or we have some mild pricing recovery in our backlog. In the order intake of this month or this week, we see significant high level of prices, which we will turn into revenue and EBITDA in Q2, Q3, and onwards. The market is super strong in the United States. So demanding that we are struggling with our local capacity. We are complementing our local output with imports from different places to maintain our share of wallet with the American customers and follow the demand growth in the market. As said before, we have significant improvement in the circular economy KPIs. Climate ambition on track to deliver the 38% target for 2025. The social ambition is well positioned in line with our goals of 2025 and the capital market aim goals. Let me move to Francesco for the financial insight. Thank you, Massimo, and good morning to everybody. The usual recap of our profit and loss. Revenues reached almost EUR 4.8 billion, of course, including the change of perimeter coming from the consolidation of Encore, which was not there in Q1 2024. Organic growth pretty positive, very positive, I would say, at 5%, certainly driven by transmission, but with also a good solid stability in I&C and Power Grid and a growth, actually, in Digital Solutions, as Massimo said, very strong in North America. Good news also from the start of the year on the EBITDA, on the adjusted EBITDA, EUR 527 million. You appreciate, as Massimo commented, the margin expansion. If you look at the percentage on revenues at standard metal prices from 12.4% - 13.1%, there are many good elements in this margin expansion. Certainly, the biggest factor is the strong expansion of margins in transmission, but also margins in the power distribution in the Power Grid space are holding up pretty well. In terms of net income, the landing point group net income is EUR 150 million. It is certainly affected by the growth of the financial charges to EUR 73 million, which are, however, in line with our expectation and fully reflecting the impact of the acquisition. We have a temporary negative effect, which is on this non-monetary item coming from the negative fair value of metal derivatives, which is sometimes a quite usual element in our profit and loss. It is temporary, but it is weighing a bit on our Q1 2025. We can move quickly to the cash flow. You see here, as usual, the bridge from March 2024 to March 2025 of our net debt, which is, of course, resulting in the last 12 months free cash flow. You see the move of net debt from 1.7% before Encore Wire acquisition, of course, to the current 4.8%- 4.9%, affected by the acquisition effect almost entirely Encore Wire, affected positively by the net of the convertible bond conversion, which took place between June and July last year, and the share buyback for a positive net effect of EUR 357 million. You see the pretty powerful free cash flow that we have generated in the last 12 months, which is at the EUR 1 billion level and substantially in line with the full year 2024. Of course, this still benefits a lot from the working capital changes, a drop close to EUR 500 million. We may have some different distribution here throughout the quarters because you appreciate that the cash flows of the transmission business, in particular, are depending on milestones, are depending on down payments. They never distribute equally over the quarters. This is a very good start on track with our EUR 1 billion midpoint of the full year guidance. Thanks a lot, and I give it back to Massimo. Thank you, Francesco. Let me move to the guidance. We are still in the position to be pretty confident about this guidance with a midpoint at EUR 2.3 billion, despite some, as you know, turmoil in the American footprint. The signs, the signal from the market, the customer-wise in the U.S. are pretty strong. They see a market demanding in terms of investment, see the market demand in terms of cables for electrification and for special business, telecom business, as I commented before. We are in a position to confirm the midpoint of the guidance. Of course, we have two effects. One that's in the, we expect to close the deal with Channell towards the beginning of June. It will be before the end of Q2. We will have the full impact of the semester of Channell in our revised guidance that we will probably share with you in July. This is a great positive news and opportunity. On the other hand, we have some headwinds that you can expect in terms of forex, dollars, euro exchange rates. For Q1, we have been pretty much immune, but at the current level, if this current level of exchange rate continues for the remainder of the year, we might see some additional headwinds. We will be in July in the best position to revisit this guidance, including the business trend impact, which is positive from what we see, including the Channell perimeter change and probably including some adverse impact from the forex exchange rate. Free cash flow confirmed at EUR 1 billion for the full year. We are super, super satisfied by the performance of transmission, which is also our important pillar for the capital market day. Our journey from EUR 2.1 billion proforma 2024 to EUR 3 billion + in 2028 relies a lot on transmission. The fact that in Q1, we had expanded the business, we had expanded the margins, we had still a significant backlog that will help us navigate the next four years without resulting in additional order intake to confirm our target, makes us super confident that we achieve the EUR 3 billion level mark for 2028. The cash flow generation is always, as usual, an important strength of this company. It will continue remaining an important strength of this company. Channell position, as I told you, is on track. We look forward to initiating and starting integration from June onwards and making a common ground, creating the common opportunity to turn the telecom business in the United States into a Digital Solutions business with the connectivity and cables. The 2025 look is confirmed. In July, we will have a revised view for the full year. Thank you for your time. I think we can open to your 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 one again. We will now take the first question from the line of Daniela Costa from Goldman Sachs. Please go ahead. Hi, good morning. It's actually Ilaria here on behalf of Daniela. So a couple of questions. First one on Power Grid. If you could provide some color on medium voltage versus HVAC performance, and also if you can comment a bit on what you saw in the U.S. versus Europe. And then on the wait and see you saw in the U.S., was that more on HVAC or on medium voltage? And then the second question is if you have done any pre-buy during the quarter and if you've seen any pre-buy from customers and so what we should expect as a consequence for free cash flow conversion. Thank you. Thank you, Ilaria. Power Grid, some more color. The organic growth is a little bit negative because last year in Q1, we had significant strong demand in volume and price in the overhead transmission business in the U.S., which has now in Q1, but also in Q3 and Q4 last year, not as strong in price, but also in volume as it was in the past. Medium voltage-wise, the demand is still very strong to the point that you know that we have approved two months ago a significant investment in medium voltage in the U.S. and McKinney to both serve the I&C space and the power distribution space. The wait and see was about the fact that in Q1, we had some negative impact from the usual bad weather. We had a couple of factors that went on stop for two or three days. Customer could not really start installing cables due to the soil condition. The wait and see was about this situation. In March, as soon as the high season, the good season started, we saw this rebound in medium voltage demand. Overhead transmission line, we have kind of full coverage of 2025 in terms of backlog. We are doing pretty well in this space in the United States. As far as you are concerned, demand remains scattered with strong demand in North Europe, strong demand in the U.K., strong demand in Spain, weaker demand in France. A different situation. Overall, we are in this year, we will have the new capacity installed in Europe coming on stream. This line is already fully saturated through the rest of the year. There is a stronger situation across the board. Remember that in this space, also we have a medium, sorry, low voltage cable that remains a weak segment of business across all geographies. On the other hand, in the same space, Power Grid, we have a high voltage business, which is, I'll say, super strong, super demanding to the point that we are not able to catch up with this demand. We are about to decide to make a second investment in Europe for additional capacity. I&C U.S. versus Europe. The U.S., I mean, you know that we were scared by U.S. performance in January and February, but we knew that was something specific, one-off related to a negative combination of many factors: the weather, the low season, the behavior of some competitors in the U.S., and the sharp increase of copper price. The situation has completely changed in March. Behavior of the other players became more reasonable. We placed many price increases in the market in March. They all have been followed suit by all other competitors. In April, we continue along this trend. Europe remains also here a scattered situation. We have a generic demand good in terms of industrial commercial project, some stability with some good spike of demand in the residential market. I mean, we have not seen pre-buying in the U.S., which is where we expect things to be exposed to tariff impact. We have seen customers that are walking away from the usual importers channel and afraid of being hit by tariffs in the future. There has been no additional demand in the market. There have been some of the customers that used to buy from importers shifting their demand towards local players, Prysmian and the others, of course. That's clear. Thank you. Thank you, Ilaria. Thank you. We will now take the next question from the line of Akash Gupta from JP Morgan. Please go ahead. Yes. Hi, good morning, Massimo, Francesco. I have two questions as well, and I'll ask one at a time. The first one is that I see that you are now moving to margin in constant metal price, which I guess makes sense as it removes impact from swinging metal prices. But can you tell us what does the new normalized margin will be in constant metal prices? I mean, previously, you said you target 18%-20% in transmission, 12%-13% in grid. How do they translate into a new margin definition? Where does electrification margins are going to sit on constant metal prices definition? That is the first one. Okay. As far as transmission is concerned, the impact of standard metal prices versus current metal prices is not that much because in transmission, there's a little quantity of metal, and there is much more quantity of other material and installation activity. You've seen this in the Q1 where margin at current was 16.6%, margin at standard was 16.9%. So no big deal. We confirmed that in the mid-long-term target, so the capital market target, when we mentioned to you that we'll be averaging around 18%-20%, you should add probably a few points to these targets to recognize the effect of the standard metal margin in the transmission space. On the contrary, in the I&C space, the differential is pretty higher. I think we should consider a couple of points in incremental, a couple of points, 200 basis points additional if you convert it from current metal prices, current being Q4, Q1 2025 into standard metal price. The level of copper in standard metal price is $5,500. The level of aluminum is $1,500. The level of lead, which is a minor metal, but we still buy it, is $2,000 per ton. You can make the comparison to the current metal prices. I give you an additional hint. The famous Encore Wire 15% EBITDA margin at current, we are really close to 19% as standard. Thank you. My second one is on opportunity of market outperformance in the U.S. in electrification market. I mean, when we were at the Capital Markets Day, you talked about how Encore is complementing your offering and making you a full-line supplier for all the types of cables that are required by distributors. We will be soon approaching the one-year anniversary of close of Encore deal, and I wanted to get your thoughts on, have you started to see any increased traction from distributors that may help you gaining market share given now you can supply literally all type of cables on both copper and aluminum conductor? Any thought on market outperformance that we should see in the remaining part of the year? Thank you. Thank you. Akash, if I understand, the question is about the opportunity to sell more to distributors and the opportunity to leverage the synergies. We are talking about the same stuff. We had already geared up the commercial organization, which basically is what we adopted from the Encore Wire acquisition. The agents who print on Encore Wire is the new commercial organization in the entire I&C space in the United States for Prysmian. We already geared up this commercial organization to sell all products, not just the Encore Wire products, so the copper and aluminum building wire, but also medium voltage cable, industrial cables, portable cords, electronics. Most of the stuff we already either relocated in terms of production in McKinney, or we are at least relocating in terms of service, in terms of distribution center to McKinney. This is helping us deliver from McKinney across the entire I&C portfolio of products the best service level. What we notice is that customers have recognized even recently that despite some, let's say, contingent difficulties in the first two or three months in terms of maintaining the same service level, in the last four months, our service level has been impeccable. They all appreciated the 24-hour delivery. Most of the month revenue is from stock. Most means 70% are from stock with 24 hours. This advantage that used to be applied only to copper and aluminum building wire now is applied basically to the entire portfolio, almost to the entire portfolio of products that we deliver to the I&C space. This is the rationale, this is what we are going to leverage to achieve the cross-selling opportunity and the pricing improvement associated to the integration of the two perimeter. I hope I answered the question, Akash. Thank you, Massimo. Thank you. Thank you. We will now take the next question from the line of Chris Leonard from UBS. Please go ahead. Yeah. Hi, there. If I could just ask a first question to clarify the electrification business and Encore Wire saying that you've already achieved sort of 15% margins in April. I'm just wondering if that's also true. Have we seen an improvement in the legacy I&C margins as well, excluding Encore? And if so, has that been driven by higher demand for copper wire or aluminum wire, or is that actually also from better pricing behavior that you commented on for competitors? Thanks. March and April benefit from all those factors, Chris. There is additional volume in the market given the start of the high season is quarter March and quarter two certainly set the start of the high season. More volume in the market, more demand. As I said before, there is some customer already shifting their supply chain from imports to local players. This is also determining and impacting the additional demand. We had better prices, no doubts. We had better prices because on the one end, copper and aluminum have stabilized a little bit in terms of level of price increase. We could, with a price improvement set in the market, fully offset their cost, which this was not the case in January and February for copper and aluminum building wire, and actually go beyond setting their cost. This level of profitability is now back to the level we had before. It is not just Encore, to answer your question. It is also the rest of the I&C perimeter, which tends to be less visible, less, how to say, it is more difficult to carve it out because most, so the entire copper production legacy Prysmian has been moved to Encore. Most of the aluminum building wire that we used to, we still produce in our site, legacy Prysmian, we are delivering to customer through Encore. The two perimeters are fully becoming very blended. The overall margin is in line with what I told you about the Encore Wire margin. Okay. Thank you. That's very clear. Maybe a second question tying into electrification, but also maybe on Power Grid. What are you seeing for early indications of higher pricing on aluminum? Is that being able to be absorbed across the market? If you can maybe update us as well on the sort of percentages exposure for aluminum on the new I&C divisional structure with Encore included and equally on Power Grid, just to give us a flavor of that shift to more local players and how that will impact revenue growth. Thanks. Yeah. I will address first Power Grid where the Midwest premium, so the extra cost represented by tariffs, is part of the formula in the existing frame agreement contract with the customer. This is a simple pass-through. As far as the aluminum impact into the electrification, so I&C space, we've seen the Midwest premium reflecting the impact of tariff even before tariff being put in place. From end of January onwards, we had seen Midwest premium increasing. We have been able to pass it on to the market because this is a common situation across all competitors. Southwire, ourselves, we all needed to source aluminum from production plants that are located outside of the U.S., and Tariff has become a normal part of the cost. Of course, this will create more inflation in the cable space, in the activities where cables are required for investment in expansion of the grid, for investment in connection of building and so on to the grid. However, so far, we do not see, we did not notice any slowdown of market demand due to the incremental cost associated to metal increase due to tariffs. Okay. That's great. Thanks for all the color, super clear. Thank you. You're welcome. We will now take the next question from Xin Wang from Barclays. Please go ahead. Hi, there. Thank you for taking my question. I missed it. Sorry about the noise. My first question is on Power Grid. I'm not sure if it's asked already, but we've seen very resilient margin compared with some concerns on margin softness discussed in the U.S. market last quarter. Do you still view the 12%-13% as the right margin range, please? We've seen resilience, yes. Maybe it was too negative last time when I mentioned a range of stabilization of margin in Power Grid between 12% and 13%. I think in standard terms, so in standard metal prices, we see this level of between 14.5%-15.5%, so 15% midpoint stable over the coming quarters because the drivers are the same drivers. In Power Grid, not necessarily this year, but very significantly next. Very significantly next year, we will see an uptake in margin represented by the additional HVAC volume delivered to the market from our additional capacity. So 15% level is what we expect to see in the coming quarters. Okay. Great. If I can just follow up on the Power Grid, my next question is, was there any frame agreements due for renewal in the quarter? If so, was there any change on the price and duration of the agreements or any terms and conditions made? There are frame agreements and renewal every quarter in the U.S. as well as outside the U.S. As we all understand, even if they went out for tender, it is very difficult for a customer to shift from supplier A to supplier B, especially if supplier A has been excellent in terms of service level, in terms of reliability of delivery, in terms of quality, in terms of technological capabilities. In the current frame agreement, they've been renewed in quarter one. What we see for quarter two, we haven't seen a particular price pressure from the market. It is true that capacity coming on stream from all players, but it's equally important to know that once you gain an important leadership position in terms of share of wallet with a customer, there is a lot of resilience from this customer to shift from a different supplier from you to a different supplier. We haven't seen pricing deterioration in the new frame agreement. On the contrary, our ability to keep adding stuff to the cables, like the monitoring devices, like the accessories, like the partial discharge measures. There are a lot of stuff that you're adding to cables to make our offer kind of unique. This is helping us when the market is weak, stem the possible pricing pressure. When the market is strong as it is, to further build additional volume opportunity. That's very clear. Thank you very much. I'll go back to the queue. Thank you. Thank you. We will now take the next question from the line of Monica Bosio from Intesa Sanpaolo. Please go ahead. Good morning all, and thanks for taking my questions. I have three. The first is still on Power Grid, sorry. The start to the year was with a -2% organic decrease due to the tough comparison base. Should we expect the organic growth could turn positive from second half when the new capacity will come in force? If I'm not wrong, within the Power Grid segment, the weight of the low voltages is quite low, 20%-25%, if I'm not wrong. Low voltages are weak. When should we expect recovery also in low voltages within the Power Grid segments? This is the first question. The second one is on transmission. The +50% organic growth in first quarter was materially above the market expectation. Should we expect similar progress also in the next quarters? You guided for a 17% margin. I'm just wondering what could be the incremental adjusted EBITDA in absolute term by year-end for transmission. The very last is on the competitive environment in industrial and construction. Now pricing is quite, you increase the pricing, the volumes are up, but any color on the competitive environment and the pricing discipline within the segment would be useful. Thank you. Thank you, Monica. Tough question, comprehensive question. Well done. Let me try to answer one at a time. Power Grid, organic growth negative by 2%. The growth, as you said, is a tough comparison due to the overhead transmission business, particularly stronger in some projects in the U.S. in quarter one, 2024. We see organic growth in the coming quarters in the wake of the additional capacity, but also the addition of the strong season ahead of us. It will not be a 10% organic growth. It will be in the range of a mid-single-digit organic growth increase. Bear in mind that in quarter four last year, we had significant growth in Power Grid. Whether we will be able also in quarter four this year to maintain additional growth year-on-year over quarter four, we will see. Quarter two, quarter three, you will see organic growth turn into positive. The voltage has been very weak since ever. The reason is not that simple for us to understand, to clarify. Certainly, the demand of electricity driven by all the use cases that you are very aware of is affecting much more high voltage AC space and medium voltage space than it is with low voltage. It's not that the demand is declining. It's not just growing. While the demand for medium voltage and HVAC is stronger in order to transmit more power, more quantity of energy to feed electricity to the different users. I don't expect recovery in the low voltage space. Transmission, yes, super fantastic. We are super satisfied. 60% was not conceivable a few quarters ago, but we did very well in terms of execution and in terms of benefiting from the high-margin projects and the additional installation capability thanks to the new vessel. This confirmed that our strategy to invest both in manufacturing capacity and installation is really paying dividends differently from what many competitors, actually all other competitors, have decided to do. To focus only on manufacturing. Installation, an important part of the margin increase, an important factor that drives organic growth increase. The full year EBITDA, we know it. It is well-defined because we are the backlog in the end. Last year, we delivered EUR 360 million. I did not mention on the capital market day what the EBITDA target is for 2028, but I gave you many indications to allow you to figure this out. We have to exceed the $100 million target by 2028. Our journey from $360 million in 2024 through $100 million+ in 2028 goes through a significant increase in 2025 in the region of $180 million-$170 million. Driven by the same factor that you've seen in quarter one: execution, capacity increase across the board, so manufacturing and installation, and better margin of portfolio. Perfect. I'll do my math. Thank you. On the Power Grid. No, no, right. Sorry. I wanted to. So you want me to answer the third question, or you want to go back to Power Grid? Yes. Yes, sure. Massimo. Sorry. Okay. The third question was about the competitive environment in I&C. Yeah, we had some undisciplined behavior, let me say, in January and February, which were fully recovered in March and April. The whole market became more disciplined. As said, the pricing increases that we set in March were three. All three stuck into the market. We had maintained the price increase set every single time, and competitors followed them. This also is recognizing our power in the market in terms of leadership in pricing and also recognizing our large position versus our partner channels, distributors. Also recognizing that some of the smaller distributors that used to buy products from imports are shifting demand to the local suppliers. This is an indirect benefit of the possible threat represented by tariffs, which are not yet in place anyway. Yes, agreed. Thank you very much, Massimo. Thank you. You're welcome, Monica. Thank you. We will now take the next question from the line of Uma Samlin from Bank of America. Please go ahead. Hi, good morning, everyone. Thank you so much for taking my question. My first one is a follow-up on the electrification margins. Massimo, you mentioned that the behaviors in March and April have returned back to what you saw last year. Does that mean that your electrification margin is likely to return to a similar level of last year, something around 9.5%-10.5% of margin profile? Another one is on Encore. Do you see any scope for the Encore margin to return to the previous 20% if you see any pickups in U.S. construction? My second question is on the funding of the Channell acquisition. Would you be able to give us an update on the plans in terms of the mix of treasury shares and sale of the shares of the YOFC? That would be great. Thank you very much. Thank you, Uma. Let me comment to the Encore margin. March and April is in line with last year. When I mean last year, if you take, I mean, the first six months were not known to you because we did not consolidate Encore until July. Q3 last year, the EBITDA margin of Encore or I&C North America were more or less the same at 15%. When you mentioned this 20%, I do not recognize it. The margin of Encore were even higher in 20%, but we are talking about 2022- 2023, when also our I&C margin were pretty high, driven by the significant scarcity of products due to the disruption of supply chain, scarcity of raw material that we added due to the inflation that U.S. was exposed to in late 2021 and the whole of 2022. From that moment onwards, EBITDA margin at Encore Wire and Prysmian perimeter had stabilized at 15%, let me say, from first, second half 2023 onwards. We had this dip in margin in November, December, January, February, November, December 2024, and January, February 2025. March and April has restored the level of 15%. We are back to where we were thanks to the strong demand, thanks to the behavior of competitors, and also thanks probably to some indirect tariff benefits. The 15% current margin means the 19% standard metal margin that I mentioned before. I do not want you to get confused now from now onwards. We will report standard margin, so margin of standard metals. The original 15% of Encore Wire's based on current margin will turn into 19%. The 19% is the level that we confirm from now onwards. Funding of Channell acquisition. I'd like to hand over to Francesco for more detailed explanation. Thank you, Massimo. As we said, as Massimo, by the way, anticipated, we certainly add to the closing of Channell in the first half, end of May, beginning of June, we will see. It will be a balanced mix of debt and equity or equity-like. The important thing to register is that it will be absolutely consistent with our investment grade. Okay? That is the important point. Of course, there is a timeline. It is not that we have to do this entirely at closing time. It is important to keep this financial position balanced throughout the year. We mentioned the instruments we will resort to, certainly the hybrid bonds, the subordinated bonds, which is currently pretty strong in terms of market after some, let me say, weaknesses that we saw in the market, I mean, a few weeks ago. I think that now the market is back and pretty much in good shape. You saw, by the way, that we have activated some, let me call them equity-like, such as, for instance, we decided to go for a placement of our YOFC stake. This is also a way to finance the transaction, which is, as a matter of fact, equivalent to equity in principle. Of course, this is also an instrument I want to do that. What I can assure you is that we will certainly minimize the dilutive instruments. This does not mean that they will be zero, of course, but we will certainly minimize any dilution for shareholders, keeping our financial structure totally in line and consistent with the investment grade. Thank you. Thank you, Francesco. That's very helpful. Thank you very much. Thank you. We will now take the next question from the line of Miguel Borrega from BNP Paribas. Please go ahead. Hi, good morning, everyone. Thanks for taking my questions. I've got a few. First on transmission, I was wondering if you could give us more detail on the margin performance of Q1. You mentioned execution and better mix. Is it because of some specific project that started to kick in, or is it because you're delivering ahead of your initial budget? How much visibility do you really have ahead of the quarter? I ask because these projects usually have an estimated margin, and one quarter ago, you were guiding to 16% or slightly above 16% for the full year, and now you're saying 17%. Thank you, Miguel. When we plan, when we provide your focus, we tend to be conservative because we want to make sure to beat it. That is probably the reason why we plan for sustained and we deliver 17%. Being specific on quarter one, yes, we had an execution in line with the expectation, in line with the margins of the project. We have some better margin projects in our back, like Tyrrhenian Link and some others. Let me not be specific because, I mean, our customers also listen to the questions. We have great visibility of this transmission business because the EUR 17 billion backlog provides us these benefits, not only for the coming quarter, but for the remainder of the year through 2028. That's why I can easily confirm that if we continue with this current pace, which I don't think will be difficult to do, we will achieve a 17%+ EBITDA margin for the full year. Thank you. Big picture, you saw yesterday Ørsted canceling Hornsea 4, complaining about higher costs, etc. I know you've been involved with Hornsea 2 and 3. The political environment is also a little bit different in Europe. How likely are we to see further cancellations in the European pipeline, not yours specifically, but more generally? Can you give us some thoughts about the size and number of awards going forward? Would we see your backlog, for example, growing again, or do you think it has peaked? We have seen what you mentioned. There is certainly some pressure on some offshore business, more than anything else. It's a business that is not relevant to us, but you're right. In terms of project pipelines, the inflation might cause some readjustment of the timeline or the permitting of some of these projects. So far, we still see a significant long and reliable list of pipeline of projects ahead of us. We are confirming we still confirm the market size for EUR 25 billion, the region of EUR 15 billion +. There are many awards. There is the IPTO Greek player playing the frame agreement. There is RTH. There is National Grid with Eagle 3, Eagle 4. We are meant to improve our backlog, slightly improve it, because we do not want to exaggerate, as we probably did in the past, too big of a backlog does not allow us to play the proper role across all the customers for the new projects. Undoubtedly, given the current EUR 15 billion intake that we see for the market in 2025, and given that we will consume probably EUR 2.5 billion-EUR 3 billion of our current backlog for the execution of the revenues in the coming quarters, you will see at the end of this year an increase, a marginal increase to our overall backlog. Okay. Thank you very much. Thank you. Thank you, Miguel. We will now take the next question from the line of Lucas Ferhani from Jefferies. Please go ahead. Good morning. Thanks for the question. Could I ask about the trends you're seeing for electrification, especially I&C in April so far? Are you still confident about kind of the improvement you've seen in March? Yes. Yes. When I commented March, I also commented April because April is for us now a month that we already closed. The margins progression was strong in March over January and February. In April, it was even stronger than March. April has confirmed that the disciplined behavior of competitors, the sustained demand for the market, the high season has reestablished a very high level of margin in the United States. In current terms, current metal terms at 15%, in standard metal terms, close to the 19% that is the level that used to have in the quarter three last year when we first consolidated Encore Wire in our perimeter. April is reassuring, comforting, and setting the scene hopefully for a good Q2. Thank you. Generally, when we look at the full year, given the start you had, I remember, I think in Q4, when talking about I&C margin into 2025, in current terms, you were talking about maybe 10.5%, 11%, or maybe even above 11% possible. Where do you think kind of you end up now for the full year, given the information and the visibility you have now on margins? Yeah. I think we have to distinguish where you talk current to you talk standard. In standard metal, standard metal costs, standard metal prices, sorry, the level of 13% for the total group margin is what we can think of achieving. If you take quarter one, it's 11.6%. There is definitely a good one and a half to two percentage points increase for the full year. For the remainder of the year, then the full year average, we will see. The coming quarters two and three and four are suggesting in line with what we've seen in April that we can achieve the level of 13.7%, 13.5%, 13.5% for the full year. Thank you. A quick follow-up just on offshore wind. Obviously, we have seen the stop order on Empire Wind. Obviously, you are working on Coastal Virginia. There has not been any announcement there yet. Can you give us an idea of how much left you have to do on that project? Is the cable manufacturing now done? Is it just installation? And roughly in kind of EUR 100 million, what would that be in terms of revenues? There's not much of what is left to be done. We had completed the production. We have finalized installation. There's a few tens of millions what is left to be done in terms of value. Perfect. Thank you. Thank you. Thank you. We will now take the next question from the line of Xin Wang from Barclays. Please go ahead. Hi. Thank you again. My next question is on the financial item. Net income is lower this quarter, and part of the reason was this EUR 55 million loss on commodity derivatives. Can you maybe elaborate on this, please? Was there a change in how you do hedges in Q1? Or maybe there is some level of speculation on metal prices. How should we think about this line item going forward? Thanks for the question. It's quite the contrary. We are fully hedging. For this reason, we don't manage for some technical accounting reasons to achieve a hedge accounting treatment. Exactly for this reason, we have some metal, some significant metal derivatives, which has always been the case in the past, which fluctuates on our profit and loss in terms of fair value of these derivatives change. This is a temporary impact on our profit and loss, by the way, non-cash impact on our profit and loss, and it will basically stabilize or disappear throughout the year. No concern on that. No speculation at all, just to be very clear, the contrary. Okay. Excellent. Thank you very much for confirming. You're welcome. My second question is on the high-voltage demand. In April, Texas approved $10 billion spending on 675 kV transmission lines. Given Texas is basically your home base in the U.S., I assume Prysmian is very well positioned to address this demand when it comes through. I think it's still early stage, but do you have thoughts already? Would you need to build new capacity? How fast can you get your facilities qualified for 675 kV? We have qualification for the level of technology, of course, in the U.S. and also elsewhere. We see the U.S. committed to investing more in the grid. HV is one important piece of the grid. When we talk about HV in the U.S., it's both underground cable and overhead transmission. We are pretty positive about the opportunity that we'll see in this space. Also consider that part of this market is served by Koreans. Should the tariff be one day implemented, all this market, most of this market will be restricted and limited and confined to local players. That would be an additional opportunity to take advantage of our local presence in the U.S. and local technological capabilities in the U.S. That's very good to know. Thank you for that. My last question, if I may. Power blackouts, these were very rare in direct markets in the past, but are happening more often recently. What can Prysmian do to enhance grid resilience? What are the commercial opportunities out there for Prysmian? What we can do is very simple. We can offer more cables because what is actually missing is utilities investing more in connecting the local grid, the country grid with the adjacent neighbor country grids. This was a weakness. We knew that it was a weakness in the energy footprint of Spain. It's more reliant on local generation than it is on the integration, the interconnection with the adjacent countries. This is a completely peculiar situation of Spain, different from many other countries in Europe, which have at least 30% of their energy demand connected and supplied by other countries. The opportunity for us is important because there will be more interconnectors if they wanted to resolve the problem in a structural way. There will be more cable interconnecting Spain with other countries, either via land, so underground cables, or submarine cables. It's a new opportunity for additional stream of revenues. Thanks very much. The one thing we did not probably touch on is Digital Solutionss. Can you maybe update us on the demand and price insurance in Europe and U.S. markets? Has the first four months progressed as you expected? How should we think about coming quarters? Yeah. Thank you, Xin. The demand in the U.S. is very strong. So strong that it has taken us by surprise. We haven't realized that there was a significant surge in demand. We struggle to respond with the local capacity, and we are using other factories, European factories, basically to supply and top up the local production in the U.S. The demand remains strong because it has been very weak over the last two years due to the stock in more that the U.S. customer entered into after the big buying that happened in 2022. Coming quarter, we'll see this demand remaining pretty solid. Hopefully, we will see pricing improving because the demand overweighs the available capacity. There will be tightness in the supply chain. Europe is, on the contrary, not as strong. It's stable. Most of the countries in Europe are more advanced in terms of fabric-to-dome rollout. We do not have yet in Europe an additional stream of activity coming from the data center expansion. There are data center implementations in Europe, not to the level of what we see in the United States. Stability in Europe, pricing also stability in Europe, volume opportunity in the U.S. with pricing opportunity in the U.S.. Really good to hear. Thank you so much. Thank you. 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 morning to everybody. I have three questions, okay, if I may. The first one is if you can come back a little bit on Channell, if you can comment also on, let's say, about the triggers behind the earn-out mechanism. I recall a very high profitability of Channell, almost 40% EBITDA margin. So if you can help us to understand if, let's say, the payment of the earn-out is more linked to top-line acceleration you see for the current year. So that's the first question. Let's say the second question, please, if you want to go ahead, please, thanks. Channel's earn-out mechanism is, as you see, based on a base project, baseline price of $150 million plus a range of up to $200 million. All this is related to the EBITDA performed in 2025 for the full year performance of 2025. Based on a range of EBITDA, the $150 million can grow as high as $1,150 billion. They are doing well. They did well in quarter one. They are, let's say, well positioned to benefit from the market rebound also in the connectivity space. We anticipate a good quarter two also. We will see what quarter three and quarter four will look like. At that point, we will have them embedded in our perimeter. That is the mechanism of the earn-out. I do not know whether that's enough, Alessandro. Okay, thanks. Sorry, the line was not fantastic. You said in terms of EBITDA, up to EUR 150 million, sorry. No, the price mechanism is based on a EUR 150 million minimum price, on top of which there are EUR 200 million of price increase if they achieve certain thresholds, certain targets of EBITDA. The earn-out price is based on the EBITDA achieved at the end of 2025. For the time being, the EBITDA is doing better than last year. Q2 is expected to be also positive. We will see what happens in the second half of this year. Okay. Okay. Thanks. Then the second question, okay, I think I'll answer the second and third one. If you can give us a full year indication for D&A for the full year, considering the EUR 150 million level in Q1, and also on financial charges for the full year, thanks. The D&A is quite simple, I think. If you make 4x, it's a pretty good projection because we have now the full impact also of the amortization related to the price allocation of Encore. It should be quite linear. For the financial charges, the indication that I can give is for a total of EUR 260 million-EUR 270 million for the full year. Not very different from a times four also in this case, a bit lower in this case. Okay. Okay. Thanks. Your're welcome, Alessandro. [Foreign language] Thank you. We will now take the last question from the line of Luigi De Bellis from Equita SIM. Please go ahead. Hi, good morning. I have three questions, if I may. The first one related to the transmission business. Could you elaborate on the potential pipeline of a new project? How has visibility evolved compared to three months ago on your target market, so mainly TSO and Europe? The second question, the new tariff introduced by the U.S. administration is creating and will create significant distraction that could lead to a shift in global manufacturing flow. Do you see any risk of increased competition from Asian players in Europe or in specific segments of your business? On the other side, could you elaborate on the trend you mentioned of shift of your customer in the U.S. as positive indirect impact from tariff? The last question regarding data center, how is demanding evolving looking to your side? Have you observed any changes in the trend based on your current visibility? Thank you. Thank you, Luigi. Transmission pipeline is, yeah, we have the usual visibility. We have at least three and a half years' worth of projects in the pipelines with names, surnames, with definition of the routes and all the rest. We see through 2028. Of course, important to understand when those projects will become tenders and they will become order intake. We have great visibility of 2025 in terms of tendering activity because it is actually acting and happening as we speak. We also have visibility of some tenders that will be released into the market in 2026. As far as the tariffs concern, yes, there is a little bit of uncertainty as to what is going to happen at the end of these 90 days. You know that those 90 days commenced on the 10th of April. Through the 10th of July, there is this suspension of the tariffs, and then we'll see what happens next. What we notice is a behavioral change in local customers, as I mentioned before, trying to shift away from the current supply chain, offshore supply chain, so shifting to local producer. I did not see any increase in aggressiveness in Europe coming from those players redirecting their supply to European customers. I have not seen any changes, any indication coming from the market. As far as data center demand, we see still no changes. Demand is pretty strong. We are gaining position in this space because now we leverage the portfolio, the synergistic portfolio, especially in the U.S.. In Europe, we are weaker than we were led to be, that we should be more effective. We are working more close with potential contractors because while in the U.S., the data center market is traded through distribution, and we have a strong position there, in Europe, it's traded through contractors. We are gaining position. We are gaining share in this space thanks to our new relationship with these contractors. In terms of overall demand, we don't see changes. Thank you very much. Thank you. You're welcome. Thank you. There are no further questions at this time. I would like to turn the conference back to Massimo Battaini for closing remarks. Thank you for your time. I hope we appreciated together this satisfactory quarter one performance and look forward to talking to you at the end of quarter two with similar outstanding performance. Thank you very much. This concludes today's conference call. Thank you for participating. You may now disconnect.