Good day and thank you for standing by. Welcome to the Prysmian 9 Months 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 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, Massimo Battaini, CEO. Please go ahead. Good morning everyone and welcome to the earnings call of nine months 2025. I'm very excited today to share with you this fantastic success. Quarter 3 EBITDA 2025 is the best quarter ever. It is over EUR 100 million higher than the same quarter last year, 2024, in spite of the EUR 30 million, almost EUR 30 million adverse impacts. You should rate on a like-for-like EUR 670 million versus EUR 540 million. Remarkable. Also, the EBITDA margin reached the outstanding level of 14.8%, 1 percentage point higher than the nine months comparison to last year. The organic growth in the quarter has been outstanding also, with a 9% increase. That brings the overall nine months growth for 2025 at 6%. We also continue our successful journey towards sustainable targets. 39% has been the CO2 emissions (Scope 1 and 2) reduction versus baseline, and the recycled content of material in our cables has risen to 21%. Let me now enter into each business unit to explain the strengths and the performance of the individual business unit Transmission. First of all, strong backlog, EUR 16 billion. We had it in line with what was in the past, despite additional revenue consumption. On top of this EUR 16 billion backlog, we have been pretty successful in the order intake in quarter three, with EUR 3 billion more worth of projects awarded in this quarter. They will turn and convert into backlog in the coming months as those projects will be awarded the notice to proceed. Amazing has been the growth of Transmission, 40% in the quarter, which confirmed solid growth in the nine months, almost 39%, 40% also for the nine months. Outstanding is the EBITDA that has risen from EUR 19 million last year same period to EUR 150 million. By the way, this EUR 150 million, you know, probably it already is in one quarter what one of our competitors makes in the full year. Extremely rewarding for us is the EBITDA margin achieved in the quarter, almost 18%. You remember that we set goals for 2028 whereby we would need to achieve a range of 18%- 20% EBITDA margin by 2028. We are well ahead of that trajectory. 17.8% is two and a half points higher than same quarter last year, and if you take the nine month view, it is the same. We are 3 percentage points higher than last year thanks to a flawless execution, thanks to better margin in our backlog, and thanks to an entire team, regions, and the Transmission view working hand in hand to maximize the result and maximize the execution of the CapEx and the relevant projects. Let me now move into Power Grid space. The organic has been significantly high, 15%, basically driven by all countries with North America actually outpacing this 15% growth. More than 20% was the growth in the United States. When you look at EBITDA, you see moderate growth in EBITDA. You have to take into account two effects in these EUR 6 million only increase in EBITDA in 2023 in quarter two 2025 or 2024. There is a forex impact of close to EUR 8 million, and there is a Midwest impact driven by tariffs that hit one element, one family of product in our portfolio of business in the U.S., the overhead business. It's a project-driven business where we have a firm price, and we've been hit by projects that landed in quarter one and quarter two where we could not stand a chance to increase and adjust the price to reflect the Midwest Premium impact. You see a temporary blip in the EBITDA margin, 15.2% last year, 14.7% this year. This will be recovered in the coming months as we flush out the old project backlog and we land the new project. The rest of the Power Grid business in the U.S. is immune to Midwest Premium because we have formula in frame agreement to transfer the cost to the market. The organic growth in the nine months has also been pretty successful with a solid 6%. Moving to Electrification, in spite of this moderate growth in I&C Global, you had to see behind this a strong organic growth in the United States. 10% year-over-year growth in quarter three. Remarkable growth in EBITDA in the U.S. in quarter three despite weak start with July still affected by negative tariffs. Thanks to August, September, we had performed a 15% EBITDA increase quarter 3 2025 over quarter 3 2024 in the U.S. in the I&C space, namely more than $30 million in absolute value. Unfortunately, this has been offset by forex and has been offset by some pricing normalization in LATAM where we had the spikes last year in quarter one, quarter two, and quarter three in Argentina, which has normalized over this period of time. The EBITDA margin, we achieved a sustainable 14.5% level. When you look at the nine-month view, you see the upgrade and the accretion of the EBITDA margin attributed to the acquisition of the accretive and profitable perimeter of Encore Wire. Specialty, I cannot say that we are happy. Actually, we are disappointed about this. Nothing that was not foreseen. We are still struggling with the automotive performance. The demand is very weak, price pressure is very high. We are still working on the disposal of few plants and process. Unfortunately, I have to admit it is taking longer than expected. We will resolve this in the next months. We also continue to see some level of softening in the elevator space in the U.S., attributed to the weakness of the residential market in the U.S. Moving to the last business unit, Digital Solutions, we reported a significant organic growth standalone legacy Prysmian 13% in the quarter and you see the EBITDA left from EUR 45 million to EUR 88 million, thanks also to the perimeter change. There is the inclusion of more or less $40 million coming from the Channell integration. This is the first quarter where we have the full consolidation in the three months of the Channell perimeter. Amazing is the EBITDA margin. We never had better than 14% EBITDA margin in the business in the past. Now we raise this level of margin sustainable in the future to 20% with additional scope, with additional connectivity in the U.S. space. Before I hand over to Francesco for more financial insight, let me draw your attention to maybe one only of these KPIs in the first one on the top right-hand side of the page, revenues linked to sustainable solution. We raised this level from 43% last year to 44%, 45%. I read it 12 months. We will show another improvement over this level. We have a target of 55% by 2028 as per our Capital Market Day. This is our important way. Was an important way is an important KPI to read our ability to innovate to drive EBITDA margin improvement. The 14.8% EBITDA margin achieved in quarter three is a real reflection of the efforts that commercial, R&D, operation, and research team has put in innovating our portfolio. Innovating our solution to increase share of wallet on the one hand and improve profitability. Now Francesco. Thank you, Massimo and good morning to everybody. As usual, let me recap our profit and loss and summarize some messages that Massimo has already passed. An outstanding quarter is a three quarter starting from the revenues EUR 14.7 billion with an organic growth in the third quarter. Very robust over 9% which was driven by an outstanding growth in Transmission and a very strong improvement in the growth of Power Grid by the way across the board. As Massimo said, both in North America but also pretty strong in Europe. The highest quarter ever in terms of EBITDA. You see the bridge on the right of this page. Quarter by quarter I would focus on quarter three EUR 644 million, an increase of over EUR 100 million versus Q3 2024 in spite of a pretty significant and adverse forex effect of EUR 27 million which is mainly the Power Grid and the Electrification business, but also the Digital Solutions business. In terms of margin, I don't have much to add to what Massimo said. At constant metal in the quarter we grew 1 percentage point from Q3 2024, mainly driven by the growth of the margin but also the revenues in Transmission, which is obviously changing the mix in the positive sense was driven definitely the increase of margin by the full inclusion of Channell in our third quarter results. I would add also a pretty robust Q3 in I&C in North America in particular. On the lower part on profit and loss, you see a group net income which is almost doubling compared to the first nine months of 2024. Over EUR 1 billion, EUR 1.022 billion. Of course this was heavily impacted, positively impacted by the disposal of our 23.5% stake in YOFC which generated the gains in the region of EUR 350 million. Let me say that even taking out this obviously one-off effect on our net income, the net income was very robust and I like to confirm what I did already in the first half of the year that in terms of growth of our EPS we are definitely above the level that the CAGR. You remember the midpoint of this CAGR was 17% for the period 2024-2028 that we were setting last March in New York as a target. I would say we are more in the region in the first year of a 25% EPS growth for the full year versus 2024. Okay, I flip quickly to the cash flow generation. That's the usual bridge of our net financial debt from September 2024 to September 2025. It's a strong deleverage which was obviously fueled by the cash proceeds coming from the YOFC disposal. You read the number on the right of this page, EUR 566 million, which were definitely much higher than we expected thanks to the incredibly strong share performance of the company specifically in the months of July and even more August. In terms of last 12 months free cash flow, we are a bit below the level that we saw in the last few quarters, you remember that we were last 12 months half one slightly below EUR 1 billion let me say and this is not very concerning in my opinion because is almost entirely attributable to a different distribution of cash flows in our Transmission business. To be more specific, last year specifically in the first nine months Transmission was generating very strong cash flows because it was benefiting of a very very large down payments and milestones that this year are more skewed on the fourth quarter. No concern, I think that we will come back and we will regain our nice level of EUR 1 billion+. By the way, in line with the guidance that Massimo will comment in a while. Also in terms of net debt, the boost of other than our strong cash flow, the boost of the transactions like YOFC will generate a faster deleverage than we originally expected. I anticipate a net debt by year end in the region of EUR 3 billion which is definitely much lower than the thanks also to YOFC of course back to Massimo for the outlook and the final conclusion. Thank you, Francesco. Let me walk you through the upgrade of the guidance. On the right-hand side chart, you see the evolution of our guidance for the EBITDA. We started the year with a EUR 2.3 billion midpoint. For full-year guidance, we raised it to EUR 2.340 billion in light of the perimeter change, which was particularly set by the forex. The EUR 40 million additional is the organic growth of the EBITDA of the legacy Prysmian perimeter, excluding the Channell benefit. Now we are happy to raise it to EUR 2.4 billion, another solid EUR 60 million additional EBITDA coming from the strength of quarter three and expectation of quarter four. Of course, free cash flow also, you don't see the grade here, but we had EUR 1 billion low range, EUR 1.075 billion. Now we raised EUR 25 million the bottom range and by EUR 50 million the top range, making a net increase of circa EUR 40 million in free cash flow for the full year. Let me move to the final remark meeting, then leave time for you to address comments and questions. Definitely a quarter which reported an excellent performance, a flawless execution in Transmission, also supported by a good order intake. The benefits of the accretion of the EBITDA margin coming from the Channell acquisition and a strong driver of the business growth coming from North America, Power Grid, I&C, and Transmission, with North America really poised to benefit from the tariff benefit in the coming quarters. Thank you. I like now to open the Q&A section and get more insight into the business. 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 register your question, please press star one and one again. We will now take the first question from the line of Vivek Midha from Citi. Please go ahead. Thank you very much everyone and good morning. Hope you can hear me well. My first question is around the YOFC margin in the third quarter. Would it be possible for you to give a little bit more color around where the profitability of the U.S. low v oltage business stands and how that progressed o ver the course of the quarter, you mentioned that July was lower, in August September improved, and then also on t hat you mentioned just now about the b enefits of the tariffs in the U.S. coming through in the coming quarters. Could you maybe give some color around how you expect that to phase in over the coming quarters? Thank you. Thank you, Vivek. The I&C space in the U.S. we had many turbulences in the very months, in many months of 2025, due to the different dynamics, interpretation of tariffs in the markets. In July, we were still in the old scheme where tariffs were applied to metal, so imported metals, imports of metal, and not on import cables. From August 2020, from August 18, all the tariffs were set in a way that also the metal content of cable imported was charged with 50% in addition to this cold country tariff. From August 13 onwards, we had the full recognition of the fact that we are local-for-local producer. Given that circumstance, in August and September we've seen a reversing trend, while in July we suffered pricing pressure because we had costs that importers didn't have. From the beginning of August onwards, we had certainly more even and normalized competition, and now the pressure is on importers. The IC margin in quarter three in the U.S.A. is the best ever margin achieved by Encore Wire, best ever despite July was still weak due to the format setting of tariffs, at least at 1 percentage point ahead of the same quarter last year, 2023, which, by the way, 2024, which, by the way, was a strong quarter as you recall. Now, how we are going to benefit from the tariffs in the coming quarters, we don't know what is going to happen. Certainly, the supply chain from import is a long one because they're shipping cable from every place in the world. Normally, we consider it a supply chain of treatments. It will probably take another month and a half or so before the quantity of products that has been shipped and are in stock in the U.S. will gradually run down. We should be seeing, hopefully, certainly from quarter one onwards, lower pressure from importers and more opportunity for us to gain share of wallet. We think that in the aluminum building space, the market started already and will more progressively shift from importers whose price is not a god, is not going to give them any more a benefit, into local suppliers. We will certainly have a share of wallet opportunity. Whether this will turn in additional profitability, we will see. We like to gauge it. It depends more, it doesn't depend on tariff. It depends more on the possible dynamics of shortage of cable availability in the U.S. vis-à-vis the local demand. Local demand is expected to grow beyond level 25, driven by the usual data center expansion, but also by some expectation that the residential market, in light of the further reduction in interest rate, will rebound a little bit in quarter one, quarter two next year, and also thanks to a solidity of the non-residential market. I hope I answer your first question. Absolutely. Just to clarify, to make sure I heard correctly, I think you said was it from at some point in the quarter that was the best ever margin in Encore Wire given that they had some very, very good margins after the pandemic. Did I hear that correctly? Best ever margin? Yes. July was not the best margin ever. August, September was a few points higher than the same period 2024. Yes, you're right. Okay. Okay. Thank you. My second question is around the Power Grid margin. Just a clarification. Thank you for the color on the Midwest Premium impact. Could you maybe confirm then, was the margin in the power distribution business and high voltage AC, that is the business outside overhead, stable relative to the second quarter? Thank you. Yeah. As you notice, the blip in the EBITDA margin was really minor. The rest of the products, the rest of the family inside the Power Grid, so high voltages, power distribution, and network components, were not suffering any sort of margin contraction. This only days of a red business in U.S. where we win projects is similar to the Transmission space. We win one-off project, we win projects, and the price in the project is firm until you completed the execution. The Midwest Premium has risen in the last reporters due to the additional aluminum tariffs applied to metal imported in the U.S. We could not transfer this to those firm price projects. We've been completely successful transferring this Midwest Premium increase to the rest of the business. I call it including low voltage, medium voltage, by distribution. No way. We have no issue there. We have formula to reflect the cost inflation coming from Midwest Premium, Copper Rod, all the rest, to our customers in the existing firm agreement. In this specific niche of the portfolio upgrade, we didn't have this chance. We actually renegotiated some contracts, but the mass majority at firm price. When we get past the end of this year, there is a backlog of all projects that so far this price pressure, sorry, this margin contraction due to cost increase will fade away and will enter 2025, 2026 with a different, different speed. That's why I call this blip in 2021. In 2026, sorry, quarter one, this will be fully reverted back to the original level of margin, 15%+. Very helpful. Thank you. Thank you. We will now take the next question from the line of Daniela Costa from Goldman Sachs. Please go ahead. Hi, good morning. Thank you for taking my question. I'll ask two. One on electrification and the other one on transmission. Given we just talked on electrification, just following up on the comments there you made before. I think when you think about sort of this potential impact that you'll be better positioned versus the importers going forward on the Section 232, what's your view in terms of like will your intent be to mainly just grab share because they will be much more expensive, or are you also planning to leverage pricing? Has that gap become so wide now? Yeah, it is a complicated answer. Because the tariff, the 232 tariff first of all has been only applied to imported cables in the aluminum space. We expect the same treatment, the same approach to happen from December onwards where also for copper products import there will be the same logic. So the metal content of cable, copper cable imported in the U.S. will be charged with the same 50%. This still has to happen. Our interaction with the administration suggests that also for the copper space this will happen. Should this happen, we'll have Electrification, Power Grid, Overhead, High Voltage businesses where we will see our position in the U.S. is strengthened by the fact that importers have additional cost to live with, to bear with. Some of those importers decided to eat this cost, to digest it, so they didn't increase the price. Now after three months we notice the attitude or the chance to hold the same price and get in charge with this 50% of metal content, and on top of that, countryside is becoming too overwhelming for them. We expect to see reduction of imports of cables across the board for all importers in the U.S. in high voltage, low voltage, medium voltage, and Electrification. This reduction of supply to the U.S. driven by the extreme cost impact due to tariff will certainly create some imbalance in the market. We think that the first immediate benefit will be the share of wallet. It is too early now to say whether on top of the share of wallet we'll also have a price benefit, profit. Be reassured that every time we had a chance to increase price and to improve profitability without losing share in the market, we go for it, as we've done in the last nine months. The market was not that strong, but we haven't seen a particular EBITDA margin erosion in any space in the United States despite tariffs were not in favor of local producer. Price, we will see, certainly share of wallet is within reach. Thank you. Moving to the question on Transmission, as you mentioned, you're pretty much there at the 18% and there's upside, as you said, to the 18%- 20% or that you are comfortably in there in the 18%- 20%. The backlog is not dramatically different to the backlog we had at the CMD. I guess you had visibility on what the gross margin on those projects were. Can you elaborate what you changed in execution and whether this is something that we see as more longer lasting, and in that case, what is the ultimate ceiling of Transmission margins? To be honest, I also have to be more accurate in setting the target for 2028. The 17.8% today is based on standard metal. Should we base also the 18%-20% target on the same standard metal? The historical metal ten years ago, we should naturally raise the 18%-20% range to 18.5%- 20.5%. In my view, the natural ceiling is 20.5%, is the top of the range. It is the top of the range because it is true that the backlog is what it was six months ago. We've definitely been more successful than anticipating the execution, let me say. Some of the risks that were in our execution and that we quantify and we assign to provisions didn't materialize or we handled them with a lower cost than anticipated. It is again back to the execution. The strong team, strong assets. Don't forget we have now plenty of new assets. The new Mona Lisa is a new super performing installation asset with different capability than Leonardo da Vinci as Alessandro Volta. The asset will join our fleet in December 2026 and has a different set of capabilities as well. We have different tools for installing, bearing cables on the ground. We have new factories, we have new vertical lines in Pikkala that came on stream at the beginning of this year. We have a new production line in Arco Felice. We have a fantastic new asset, cohesive team working with strong focus on execution. This is what has driven the significant uptake in EBITDA margin in quarter three. This gives us confidence that the 20.5% top of the range is also achievable by 2028. Got it. Thank you very much. Thank you. We will now take the next question from the line of Max Yates from Morgan Stanley. Please go ahead. Thank you. Good morning. My question is on capacity utilization in your Encore facility. You've kind of mentioned there may be the opportunity to take share and take customer wallet share as a result of the tariffs. Could you just give us a sort of indication of, you know, if 25% of the market is going to be challenged by these tariffs, how much can you ramp up your Encore facility in the next one to two years to maybe take advantage and knock out some of that competition that then has to put through higher prices? Where is capacity utilization and how much room do you have? Thank you, Max. Our strategy is pretty simple. We have spare capacity in the range of 30% in Encore Wire, which is not there in other way because we like to have spare capacity. It's there to guarantee the service. In case we need it to respond to fast respond to market demand, we can utilize the Saturday and the Sunday shift to expand this capacity and leverage this available incremental output. Of course, in the short term this will be the answer. As soon as we see stronger structural demand growth, we will resort to the short term action to gain share and then we back up this action with additional investment which might take 12 months, 13 months. It depends on what we're going to do in terms of where we want to spend capacity. Of course, it would be McKinney, but in which line? Short term we respond with the shifts available shift on Sunday, Saturday and Sunday to avoid to compromise in the long term the service level, we will immediately activate the CapEx deployment to increase the structure of the capacity. We are the only one with this benefit. Thanks to Encore we didn't have it in Prysmian because Prysmian run facility at full at full capacity on seven days a week. The same does the other the same to the other place in the United States. With this opportunity we can certainly leverage the tariff in better way than the other people and hopefully gain share in the market. Okay, and maybe just a second question around what the competition are doing in North America. I guess, you know, when we look at Encore margins, they're clearly at very attractive levels. Obviously, your biggest competitor Southwire is private, so it's harder to keep a track on kind of what they're doing. When you speak to your sort of salespeople, what do they say about what the competitors are doing on capacity, how much availability do they have to ramp up? Are you seeing kind of new entrants or people expanding capacity that maybe you didn't see before given how attractive margins are now in this North America? The margin attracted new entrants from outside are really not coming because of the challenge. There could be new entrants from this side. I doubt it. The copper build, the wire market is in the end of two players as and the aluminum building wire is in the end of us and Southwire. The rest are importers. Behavior in the market is pretty simple to define. Southwire is very disciplined when it comes to price. Of course, they are suffering more than in the past because they are too exposed to the residential market. They have a significant exposure to residential market. This market has been sluggish and flattish over the last two years and they're probably not enjoying what we've been enjoying. On the contrary side, because with Electrification space, again from Encore Wire, we have a huge exposure, larger than before, to the non-residential space. On top of the non-residential space market, we have access to data center stronger than anyone else because we have a product range very broad, large and complete, from telecom to Electrification to Power Grid to Transmission, which is unique, not common to a telecom player like Corning or CommScope, not even common to Southwire. They are disciplined, they always follow our price. Sometimes they are the first to set price increase in the market. For example, in the last two weeks we've seen copper increases that force us to increase the price, but Southwire anticipated us, they came with a price increase in the market first. We are happy about the level of competition. Whether they have spare capacity, I don't know. What matters to this market is the service level. If you have gained so much share in data center space, it's because we serve these demanding companies, the Alexa, Microsoft, Meta and so on. With our 24-hour service, it is because with the three, two days spare idle capacity then we can respond with massive output increase that other people cannot respond to. We are well positioned to leverage now the settlement achieved by the tariffs in the market to leverage our strength, our portfolio and the asset of McKinney and gain additional share in the market. Very clear. Thank you very much. Thank you, Max. Thank you. We will now take the next question from the line of Sean McLoughlin from HSBC. Please go ahead. Thank you. Good morning. Can I just build on the previous answer? Maybe could you specify what kind of growth you've seen in data centers, maybe across the different divisions? My second question is related to fiber, particularly if you could maybe split out the growth in Digital Solutions in the U.S. versus other regions and particularly if w e're looking at fiber shortages in the U.S. What kind of positive pricing impacts do you expect this might have over the coming quarters? Thank you. Thank you, Sean. In data center space we've seen our revenues nine months to date versus nine months last year doubling in value. This is pretty much across two main spaces, Electrification U.S. and Optical Digital Solutions U.S. In the Optical space, 40% of our traded volume U.S. is for serving this data center business. In Electrification, I say that we have 25% of the total Electrification business, I&C business U.S.A. attributed to the data center expansion. This is not the same that we see in other regions. Yet we are still working in Europe and in LATAM, in APAC to become more relevant, to become more engaged with the go-to-market with a proper supply chain to win more share in data center space also elsewhere. As far as fiber is concerned, you are totally right. There is a shortage of fiber in the U.S. to the point that we are really backfilling our capacity. We have a FAF in U.S. producing fiber production coming from Europe. Price improvement has happened in quarter one. Quarter two is happening as we speak. We count on this pricing profitability announcement in the coming quarters to set a new level of EBITDA for Optical Digital Solutions business U.S. next year. Thank you. Welcome. Thank you. We will now take the next question from the line of Monica Bosio from Intesa Sanpaolo. Please go ahead. Yes, good morning. I was down and I hope you can hear me. The first question is from a strategic standpoint, Massimo, if I'm not wrong, in occasion of a recent interview, you anticipated t hat Prysmian could be ready for a b ig acquisition in 2026 in LATAM or Europe. Can you please give us more flavor on this side? Just a question. Would you see as reasonable and external g rowth in the Digital Solutions space or in other areas? That's the first question. The second one is related to Sean's question in the Digital Solutions space. Pricing is coming. What kind of margins could we expect on a steady state in the Digital Solutions space, and more in general, given the exponential growth of the data center? Do you see any supply constraints or disruption that could bring to some stops and goals along the trajectory? Thank you very much. Thank you, Monica. Our position regarding M&A is the usual one. We consider M&A the natural top-up to our organic actions, organic plans. We think we are well positioned based on our track record in M&As to leverage additional opportunity. We will be ready for large ones, and by large ones I mean something closer to the size of Encore from 2027 onwards, not in 2026. We have some more financial flexibility also for 2026 due to the disposal of YOFC shares and the treasury share. There is still some room for minority, mid-size acquisition in 2026. The point is to work identifying the specific targets, the ones that can start the highest level of synergies, and certainly looking at North America, LATAM, and Europe as main priorities to expand leadership, expand portfolio, and become more relevant within the customer base. I didn't catch the question about the standard growth in Digital Solutions. You mean internal growth, the organic. There is growth in the United States in Digital Solutions, again partly driven by the rollout of fiber to the home and also complemented by rollout of data center expansion. There is not that much level of growth in the other countries because they are much more advanced in the fiber to the home implementation. France is almost at the end, the U.K. is almost at the end, Spain is midway through. Europe will not probably give us satisfactory organic growth. North America will continue for five years at least to support organic growth for Digital Solutions phase. My question was, given the pricing that is coming in the U.S. in the Digital Solutions, this could be a lever f or further margins improvement w hat you said. Go Monica. I'm here. Okay. The margin was coming to the point of margin. We reached a 20% EBITDA margin. I think this is the level we consider sustainable. There will be upside in U.S. There will be probably stability or slight reduction in Europe. I would not bank on a significant expansion beyond 20%, which is already very accretive vis-à-vis the past trend. Of course, there will be additional synergies that we want to leverage thanks to the acquisition of Channell. Now we own a satisfactory portfolio of connectivity products with the one that we had in Europe, with the acquisition that we made, a small acquisition that we made in Australia, the Warren & Brown and Channell. Now we can leverage the full portfolio and eventually further enhance the profitability of the business unit. Okay, very clear. Very clear. Thank you. Thank you, Monica. Thank you. We will now take the next question from the line of Alasdair Leslie from Bernstein. Please go ahead. Yeah, thank you. Good morning. I had a few questions on Transmission. You talked about 2028. I was just wondering whether you could help us a little bit in terms of kind of calibrating how Transmission scales up here in maybe the next six to 12 months. I mean, how should we think about top line growth margins both in the balance of 2025, but maybe also 2026 as well. Any early thoughts there? Consensus only has around 15% like-for-like growth in 2026. It feels like maybe that's now too conservative and maybe also just a little bit more detail around the phasing of capacity coming online, please. I don't know whether you can kind of update us on those lines of Pikkala. The first one I think you highlighted again, that's up and running. The second one, maybe an update there, can that be brought forward a little bit and maybe if you can, you know, what's the kind of run rate on that submarine cable now? In particular, I think you were talking about starting with 32 tons and wanted to double that. Where do we stand now? Thank you. Yeah, thank you. Your question is too detailed. I don't like to share all this stuff with, not with you, but with the other people connected to the earning calls. I'll tell you a simple explanation. What's going on. You draw a line from 2025 through 2028 and you take the, let's call it EUR 500 million, EUR 580 million this year and take the almost EUR 1 billion by 2028. This growth from EUR 550 million, EUR 580 million to EUR 1 billion is supported linearly by additional capacity increase across many sites. There is Pikkala with three lines. There is Drammen for HVDC interconnectors with three lines. There is Naples with one additional line. There is capacity in Abbeville, United States for HVDC capability. The capacity will grow linearly from this level of 2025 through 2028. From EUR 550 million, EUR 580 million EBITDA this year to EUR 1 billion EBITDA to complement this cable capacity across different submarine interconnectors, offshore and land interconnectors. You have the installation capacity that will grow in the end with the manufacturing capacity. You draw this line, you can figure out what the organic growth for next year will be, and for 2027 and for 2028. Bear in mind that while we grow, expand the business organically with capacity, with expansion of installation capability, we also benefit from, as we did in quarter three this year, execution and better margins in our backlog to move from the 17.8% margin of today to 20%. I hope this clarified the trajectory and forgive me if I can't enter into these tons kilometers details that really we don't like to share with our peers. Appreciate that. Thank you for the detail. Thank you. 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 very much for taking my question. My first one is fairly short term. You mentioned that for Encore you saw record margin profile in September and August this year. What are you seeing in terms of Encore demand and pricing so far in October? If you could comment on that, that would be really helpful. Also, for your raised 2025 guidance, how much have you accounted for in terms of the tariff impact on I&C in Q4? How should we think about this benefit going into 2026? That's my first one. Thank you. Thank you, Uma. The record margin August-September is certainly an important trend in the market. It is not really related to the tariff per se or to the reduction of imports, but related to the fact that there is clarity in the market about where the market stands in terms of tariffs. October is coming in with a strong volume, with some pricing or margin pressure due to the copper cost increase that has been kind of sudden and sharper, and of course, U.S. suppliers are all keen on passing into the market. October is coming up in a nice way as well. The big chunk, the big chunk of the 2025 guidance upgrade comes from North America due to the strength in Power Grid and Electrification, but also it comes from Transmission business. Those three families of products, I&C North America, Power Grid North America, and also Europe to a certain extent, and Transmission, are what has driven the EUR 60 million EBITDA increase in 2025 guidance upgrade. That's super helpful. Thank you very much. My second question is a slightly more longer term. How should we think about the sustainability of this tariff benefit you're seeing now? Do you expect to see further consolidation of the market, and what kind of long term pricing benefit do you expect there? It's a million dollar question because we've never been in a situation like this where finally the U.S. market, that historically has been super protected against imports, will be even further protected. Give us a couple of quarters to really assess what the situation will be. I think that if things went in the way you think they would go, there will be significant reduction of imports of cable in the U.S. in favor of local producers. As said before, we have capacity available to respond to the sharp market demand and we have CapEx and capital allocation available to be released to support the organic growth of the market in the U.S. As we've done in the past, we'll do in the future. The market becomes more solid, more protected in the hands of few players. It's already kind of highly consolidated and we made the last move in consolidation with the acquisition of. That's very clear. Thank you so much. Thank you. Thank you. We will now take the next question from the line of Nabil Najeeb from Deutsche Bank. Please go ahead. Yeah, thanks. Good morning. My first question is on data centers. Your direct sales into data centers have of course been very strong, and I think you previously said that you're on track to double data center related revenues. Can you give us a sense of how you might look at the overall opportunity within data centers? I wonder if you've got any thoughts on the share of data center CapEx. You can maybe capture across low and m edium voltage cables as well as fiber and connectivity. The second question is on the New York listing. Do you have any updates on your plans there? I think earlier you wanted to focus o n the integration of Encore and Channell w hich seems to be well underway. There were also some headlines in the press on a potential revival of these plants. I am just wondering if you can comment on that. Sure. Thank you. Nabil. Data center, we've seen a significant growth in 2025 or 2024. We think the growth will continue. We have a visibility of long pipelines of projects, and we become stronger and stronger as time goes by because we add the innovative solution to our product range that can really benefit the data center. In the optical space, they require high-density cables with very compact standard diameter. We cannot announce it today, but we have a breakthrough that we will disclose to the market shortly in terms of size of fiber for compact cables for data center. We will be really benefiting from data center extension. I think the growth per se will probably slow down because this year we've seen 150% growth over last year. The pace of growth will probably slow down, but this will still remain an important driver of EBITDA expansion and EBITDA margin increase in U.S. for sure massively and also in other regions. U.S. listing is not an abandoned project. It's something that we partner for a few for a moment. I think you are correct. The integration of Encore is proceeding well. The Channell integration is also proceeding well. We will reopen the discussion in 2026. The project is extremely valuable to us. It will give access to this company to many U.S.-based investors. It is a priority for us. At a moment, we made the proper decision. Great. Thank you very much. Thank you. Thank you. We will now take the next question from the line of Chris Leonard from UBS. Please go ahead. Hi all. Hopefully you can hear me. Just digging in maybe on the margin differential again between North America and Europe. I wonder in the Electrification division for Q3 if weakness in Europe was dragging margins down. Could you maybe speak to the potential for you to bridge the gap in the future and grow European margins? Is there anything in your strategy you're looking at to try and improve that? Maybe is M&A into 2026 or 2027 an avenue that you would pursue within Europe? Thanks. Yeah, you're right. There is a significant difference in mind between North America and Europe. While in other regions, for example, at times we have similar margin to us, but Europe is not one margin fits all. It is a strong margin in the Nordics, weaker margin in the south of Europe. Now, how to bridge this gap? We are trying to implement similar mindset as the one we have in [North America] also in Europe, to leverage or to value the service more than the output of the factory, to make sure that we become more appreciated by customer for the short term lead time, for the short term service than anything else. Differentiation in sustainability and innovation is also important. We have a gap to cover, and we are really working across all drivers: fixed cost organization, factory footprint, and possibly consolidation of the market in Europe to bridge this gap. Bear in mind there is a structural difference between the fragmentation of the U.S. market, which is minimum, and the fragmentation of the European market, which is extremely large both on customer side and supplier side. We are working hard to reduce and minimize as much as possible this gap. Hope I answered your question, Chris. Thank you. We will now take the next question from the line of Akash Gupta from JP Morgan. Please go ahead. Good morning and thanks for your time. I got a couple as well. The first one is the clarification on your remarks earlier. I think you said that Encore had all-time high margins, and clarification, is this all-time high since you acquired or in their history? Given in 2022 they made more than 30% EBITDA margin, just wondering if you can provide some context to these record margins at Encore. Yeah, thank you. That's an important clarification, Akash. Yes, you're right. This is not the all-time ever, it's the time not since the record, it's the time since the level of EBITDA margin and anchor normalized level of margin, anchor normalized after the spike in 2022 and 2023 towards the end of 2023 and since then. Let's say quarter four 2023 onwards, we had this kind of stable EBITDA margin of 15% with some peaks and troughs, especially in 2024. The EBITDA margin highest ever mentioned, quarter three is the highest since quarter four 2023. Thank you. My second question is on your guidance range. I think if you recall last year you had a bit of softness towards the end of the year in Electrification because of some weaker volumes in the end of the year, which also continued in early this year as well. I just wanted to understand the framework behind the guidance range, that is, have you incorporated a similar scenario as well for this year, and maybe if you can also talk about what will take you to the upper end of the range and what will have to happen to come at the bottom end. Thank you. Yeah, thank you. Yeah, you're right. Last year we had a soft volume performance in November and December due to seasonality but also due to some shortage in demand. October started very strong in volume and we have a visibility of part of November. Don't forget that this is a very short, short business where we enter the month and we gain the orders of the month through the month itself. Prospect is positive. Probably volume in October is a first reflection of some slowdown in cable imports so that there is more demand for local producer. Volume is positive. We think that quarter four this year will also be extremely satisfactory in vessels. Quarter four last year. This expectation for quarter four in the U.S. has played an important role in the guidance of Power Grid but also the performance of Power Grid that at the global level was in the quarter 14% organic growth but in North America much more. The growth we expect to see from North America in quarter four is in line with what we've seen in quarter three. Also, Power Grid U.S. has played an important role in convincing us to upgrade the guidance to a midpoint 2.4. We think we will end up around the midpoint. To be in the top part of the range we had to think of something that we don't think is realistic, an extremely important shift change in the market to a local producer. Imported decided to work away, pricing going to a different level, a scenario that we don't see realistic. The tariff will play an important role benefiting us. This will gradually kick in in the market. I don't see this spike possibly happening in quarter four. Gradually we will gain, as said before, more share of wallet, more relevance, and the importance will be neglected. They will be really considered the last resort also because they won't have the only leverage they had in the past to enter the market. The price will go because the cost they have to bear is immense. This is how I see how we drafted the guidance and how I see where you're going to end up vis a vis the different business movements. Thank you, Massimo. You're welcome, Akash. 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. The first one is on the Channell performance on a standalone basis, if you can comment a little bit on the organic performance of the company but also the underlying profitability. This is the first question. The second one relates to the around EUR 3 billion debt indication I got in the conference call. If you can help me to understand the underlying assumption, all on CapEx, and also if you are assuming, let's say, significant advanced payment in the last part. I made the call to the [Eagle] for in case. The last question is, sorry I joined the call late, but if you can also give me some ideas on the tax rate level for this year because it was pretty low in the nine months and also the level of financial charges. Thanks. Thank you, Alessandro. Channell benefits from the strong rebound of the telecom market. The Channell performance in quarter three 2025 is well ahead of quarter three 2024, as also North America performance in optical cable business 2025 is ahead of that of last year. The market has rebounded. Channell benefited from organic growth upside but also profitability side. The level of EBITDA that used to be in the range of 40% in 2024 has risen to a more solid 43%-44% for quarter three this year. We had this twofold benefit coming from Channell, which, again, given the strong demand of optical business, supported by use cases like data center and fiber to the home, we believe that it's going to be sustainable in the coming years. I would like to hand over to Francesco for the [NFP]. Yeah. And the tax rates questions? Yeah, good morning, Alessandro. The assumptions are pretty simple on the EUR 3 billion debt. First of all, let me highlight that the EUr 3 billion that of course assumes is based on the treatment of the hybrid bond as equity. Just to be very clear on that point, which is according to IFRS. Nothing new, but better to clarify the assumption is that we are in the midpoint of the guidance for the free cash flow that Massimo highlighted. Of course, in this assumption there is the down payment of AGL4, no doubt. By the way, I commented that the reason why we are confident to recover the level of the free cash flow on a full year basis after the drop down to EUR 859 million last 12 months of September is exactly a very strong cash generation of Transmission business which is more skewed on the fourth quarter than compared to last year. Nothing else on the extraordinary transactions. YOFC has been completed, and these will not impact, will not have a different impact from the one that you see in September. You are right, the tax rate is very low. The reason why it's very low is a technical reason, I would say an accounting reason, which once again has to do with the disposal of YOFC. Basically, the big gain of EUR 350 million has a pretty low level of taxation. I expect these to be stable also in the full year around 22%. It's a good point that you make because it's not certainly our sustainable long term rate, would be too nice to be true. [Yuri], I go back to the indication that I gave at the Capital Market Day where our sustainable tax rate is more in the between 25% and 27% I would say, and the financial charges are reflecting obviously the acquisition done in the past. The new financing are progressing quite steadily at EUR 70 million, EUR 70 something million a quarter. An easy projection is in the region of the EUR 285 million, EUR 200 million, let me say between EUR 280 million, EUR 290 million for the full year versus the EUR 216 million year to date September. Okay. You're welcome, Alessandro. Thank you. We will now take the final question from the line of Xin Wang from Barclays. Please go ahead. Hi there. Thank you for taking my questions. Good morning. I'm not sure if I'm the only one confused here, but I want to clarify one thing. On the tariff impact, I think you explained how the aluminum tariff works, which is in July it's applied to metals, not to cables. Therefore, you saw cross pressure in July, and then by August 16th or 18th, it's expanded to cables and you saw the best margin of on call. You said we expect the same logic to apply to copper. Does this mean that we haven't really seen the tailwind from the copper side this quarter yet? Do you expect this to come in the coming quarters? Please. Thank you Xin. Yeah, you are totally correct. The Section 232 tariff applied to metal has been expanded to import cables as far as aluminum cable is concerned from August 18. Our interaction with the administration suggests the same logic will apply to copper. This will probably take another quarter to be implemented. We expect this to happen from somewhere in quarter one, 2026 onwards. Of course, the copper space is not that relevant as the aluminum space. 28% of the aluminum market is in the end of importance in terms of copper build. The wide market, they are barely importers importing copper cable in the U.S. in Electrification in I&C. There are cable imported in the U.S., copper made in middle market space and by distribution in HVAC. We will not see a significant benefit of the 232 charges applied to import cables in I&C space. We will see some benefit in Power Grid and high voltage should this approach be implemented at some point in the coming months. I hope I clarified this difference between the two family products, aluminum and copper. Yes. No, the first part is very clear. The second part I just want to clarify. This is what I heard. Potentially when we look at the benefit from copper and aluminum tariffs being on the I&C front or the Power Grid or Transmission front, you expect aluminum imports to be a more structural benefit that takes some time to flow through. Obviously, part of that is because aluminum import penetration is a lot higher than copper and also it's less exposed to the spot market. Yeah, correct. The aluminum space, I mean aluminum cables are lighter than the copper cables. That is why the U.S. is importing, as other regions are importing, more aluminum cable than copper cables. The aluminum space is inside the Electrification space and that's the construction. The aluminum cables are also inside the Power Grid. For example, overhead lines are mostly made of aluminum conductors. A chunk of the overhead transmission business that we own in the U.S. competes head to head with importers bringing overhead transmission line from India, from China, and other countries. Now, also, these importers that enter into the Power Grid space through overhead transmission line will feel the extra cost of the 50% if applied to metal content, and the conductor, valid lines is only made of a conductor, not insulation. There are other benefits to come through. I really suggested to pose a bit on tariff. It's not too big of a deal. We just had finally a settlement in aluminum. There will be copy pasted by copper approach in the next few months. We will really need a few months to gauge the entire benefit. Be aware that we are really structurally posed to benefit from it. We have capacity available. We have a larger engagement with all major distributors and utilities in the U.S., so a strong connection with all customers. We will be the beneficiary of the tariff in a way or the other. This starts already to happen in July, in August, and September for the I&C phase and this will carry on in the future. This is very clear. Thank you very much. We can totally afford to be a little bit more patient. My last question is on the high-density fiber cable and the system. You talk about the opportunity out there because your peer Corning obviously is also talking about the same thing. I know you have made a technical breakthrough, but can you already share some thoughts on if there's any customer dialogues started already or how do you think about the investment that is required out there? On top of this, I think you made progress with the Channell acquisition, but you previously also said you intend to grow to expand the portfolio offering on Digital Solutions. Do you have any progress to share please? We keep working on innovation and currently does the same because we have three we think that we have at least two breakthrough vis a vis. Please don't make me share what we think of the other competitors. We have strong effort in innovating in fiber making very very thin fiber solution and very compact cable solution. We're working on the hollow-core fiber which is a new generation of fiber to increase speed of transmission of data which is key for data center rollout. We're working on very super compact cables that also keyed for data center because they have little space in ducts and they want to squeeze as many fiber as possible in this short short form short space. Innovation is our key driver of profitability and volume and share enhancement in Digital Solutions space. You mentioned also Channell. Channell gives us a range of products in connectivity that is completely complementary to what we have in Europe. Now we will do a cross selling. We would like to use a Channell product and sell them in European market using our go to market channels and do the opposite, the complementary, using our European portfolio connectivity and bring it to U.S. benefiting from the channel to the market that Channell has. The go to market channels, Channell is the way to market that this company we acquire has which we didn't have before. Cross selling of connectivity ranges, European one in U.S. and U.S. one in Europe, is what we expect to deliver to our EBITDA in the coming quarters. Very clear. Thank you very much. Thank you. Thank you. We will now take the next question from the line of Luigi De Bellis from EQUITA SIM. Please go ahead. Hi, good morning. Just one quick question for me. Could you share your current strategic view o n the submarine telecommunications cable business, are there any plans to renew the interest in expanding or investing in this area? Considering market trend or potential synergies with your existing Transmission and telecommunications cable activities, but also different business model, if I am not wrong. If you can share some view. Let me share what I can because talking about strategy, strategic decision, I cannot share much sector. We have a business inside the Transmission space that is called telecom submarine. We are a small player because we can only play in regional connection. Short lane submarine telecom connection, we noticed that the market has certain increase a lot in size because the data center expansion plays a significant role in the Spanish market, especially in terms of long haul submarine telecom interconnectors or Atlantic interconnectors of U.S. Europe and so on. Some players, the key players in the market, have neglected the regional space. We are thinking of expanding our presence in our portfolio in the regional, so short distance, mid size short distance submarine telecom connection through organic moves and additional investments to stop here. We want to make this another opportunity for supporting Transmission growth with another stream of revenues, more solid, more growing than the one we're currently in our portfolio. I hope I gave you the sense of the strategic direction without giving too many details. Thank you, Massimo. Thank you. There are no further questions at this time. I would like to hand back over to Massimo Battaini for closing remarks. Thank you for your time and for your attention. We really want to give you the sense of what's happening. A strong quarter and more than strong quarter. Good feeling for quarter four and what we think is going to turn out for us an opportunity in terms of tariff organic growth, transmission growth in the coming quarters. Thank you very much for your time and talk to you soon. This concludes today's conference call. Thank you for participating. You may now disconnect.