Good afternoon. This is the Chorus Call Conference Operator. Welcome, and thank you for joining the full year 2023 results and midterm view conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Miss Chiara Locati, Head of Investor Relations of Industrie De Nora. Please go ahead, Madam.
Hi. Good morning. Good afternoon, ladies and gentlemen, and welcome to our full year 2023 financial results and midterm view presentation. I'm Chiara Locati, Head of Investor Relations and ESG at De Nora. With me on the call today there are Paolo Dellachà, CEO of the group, and Massimiliano Moi, CFO of the group. The agenda of this presentation includes an overview of 2023 main achievements and financial results. We will present you an overview on our new ESG strategy and action plan. Then Paolo and Mass will drive you through our midterm view and financial target strategy update and financial objective for 2023 and 2025. Finally, after a quick review of final remarks, we will open up a Q&A session. With that, I would like to leave the floor to Paolo.
Thank you, Chiara. Good afternoon, everyone. 2023 was a successful year for our company. We celebrated the centennial of De Nora's foundation, 100 years of success and satisfaction that has enabled us to achieve global leadership in most of the segments we operate, offering advanced, sustainable, and even ever-evolving technologies that adapt to our customers' growing needs for operational efficiency and environmental sustainability. Despite a challenging macroeconomic scenario in 2023, we reported solid and growing financial results. Revenues grew by 4% at constant exchange rates, mainly supported by significant expansion in the energy transition business unit, double-digit growth in the water technology systems, and a stable performance of our electrode technology business. EBITDA adjusted margin was 20%, exceeding our guidance and generating solid cash flow. The energy transition business was our growth engine, with revenues that more than doubled compared to 2022, and the EBITDA margin was positive at 12%.
We realized 1 gigawatt of technologies dedicated to the generation of green hydrogen, and for the coming years, the promising backlog and pipelines support our expectation of solid growth. We continue to invest in research and development and our distinctive and versatile production capacity. In 2023, we completed the expansion of the manufacturing capacity at the Suzhou plant in China, strengthening our competitive position and footprint in Asia. In Italy, we are committed to realizing our green Gigafactory. This greenfield project will have a capacity of 2 gigawatts to produce electrodes for the generation of green hydrogen and for fuel cells, and small-scale electrolyzers for water electrolysis. The Gigafactory, as you know, is eligible to receive up to EUR 63 million within the IPCEI Hydrogen One framework, the project of the European Commission. In July, the Italian government already approved EUR 32 million out of the EUR 63.
This project represents a key milestone for the entire Italian and European green hydrogen industry and a critical investment for De Nora Group, which, while expanding its production footprint, will also develop new technological solutions such as the proprietary Dragonfly electrolyzer. In 2023, we launched our new and first ESG strategy and action plan for 2030. Our goal is to generate long-term and sustainable value for all our stakeholders. We consider sustainability a mission and not an option. We are committed to playing a leading role in shaping the industry in green innovation and circular economy. We are also working to improve our climate action, and in 2023, we reached a total of 3.1 gigawatt-hour of solar panels installed in our plants. Using renewable energy is one of the key initiatives to reduce our carbon footprint, and we aim to achieve 100% renewable energy by 2030.
Finally, based on strong financial results, the board of directors proposed today the distribution of EUR 0.123 per share, so EUR 0.123, for a total amount of about EUR 24.5 million to provide consistent remuneration to our shareholders. In this slide, you can appreciate some KPIs of our full year 2023 performance that Mass will comment on later. Coming back to our business unit performances, the electrode technologies business witnessed a 2.4% year-on-year revenue growth at constant exchange rates. This growth was primarily driven by the chlor-alkali division, which experienced increased volume. However, the electronics division faced market normalization after the post-COVID growth. The chlor-alkali expansion was underpinned by technological upgrade projects to enhance our customers' plants' efficiency and environmental sustainability. Notably, we secured two significant contracts: the OxyChem projects in Texas and the Unipar project in Brazil.
In addition, our partner, thyssenkrupp nucera , recently announced a contract with the CAPE Igarassu Chlorum Solutions to convert an existing chlor-alkali plant in Brazil into an eco-friendly facility. Although this contract is not yet in our backlog, it will be included in the coming months. Our aftermarket services, leveraging a wide and evolving global installed base, contributed significantly to the growth, accounting for 42% of the business unit revenues. In 2023, our EBITDA margin remained robust at around 25%, a testament to the strength of our business model. Our success is built on solid execution efficiency, well-recognized product performance, and our unparalleled global leadership. In November, we proudly announced the expansion of our Suzhou plant in China. As I said, the new production line tripled the existing electrode coating capacity on site.
The new capacity will be dedicated to various applications, including Chlor-Alkali, electronics, and Energy Transition, and will fulfill existing orders and projects already in our backlog while also meeting the expected growing demand for electrodes. It is a strategic move to strengthen our footprint and competitive position in Asia and worldwide. Overall, we are pleased with the consistent performance of our electrode technology business. Looking ahead, we anticipate stable results, also supported by a recovery in the electronics division. The water technology business experienced a two-speed year. On one end, the pools division faced challenges due to the destocking phase following the post-COVID boom of our customers. However, on the other hand, the water technology systems, the so-called WTS division, achieved a remarkable growth. It posted a record increase in revenues and profitability, with 37% of aftermarket revenues.
The strong performance of our WTS division is attributed to excellent project execution and the robust backlog as of December 31st, 2022, so the year-end backlog of previous year, as well as new contracts secured in the course of 2023. Notably, the order intake in 2023 reached approximately EUR 190 million. Of this, 49% came from industrial customers, mainly in the energy and steel sectors, while 51% were projects dedicated to municipalities. Among the municipal projects, 30% aimed to provide citizens with drinkable water. In 2023, we significantly reinforced our brand awareness in Saudi Arabia, a key market for De Nora, by achieving a critical milestone. The second phase of the Al Jubail desalination plant upgrade, this ambitious project expected to be completed in 2024, represents the world's largest seawater desalination operation.
It will produce an impressive 1 million cubic meters of desalinated water per day, thanks also to the utilization of key De Nora technologies. We also made the strategic strides by signing a memorandum of understanding with the Saudi-listed company called ACWA Power. As the world's largest private water desalination company, ACWA Power shares our commitment to energy transition and water treatment. Together, we aim to drive progress through the advanced water treatment technologies. Our joint research and development efforts will pave the way for key innovations in this critical field. In the early months of 2024, we are observing robust commercial dynamics across various geographical regions. Consequently, we expect the positive trend in our water technology systems, WTS, to persist throughout 2024 and beyond. The increasing global demand for sustainable water resource management supports this trend. Finally, in 2023, our pools division experienced a 40% decrease in volumes.
However, during Q4, the business stabilized, leading us to believe that the destocking phase of our customers is now over. As we look ahead to 2024, we anticipate a recovery in growth. Despite the challenges, our pool product line remains an attractive segment, particularly driven by advancements in electrochlorination and existing pool automation. Our strong market positioning, with 85% market share, a world-class technological offering, gives us confidence in our mid- and long-term strategy and overall performance. This slide showcases ongoing contracts for the industrial and municipal customers spanning various technologies. Let's have a look at some details. As already mentioned, De Nora awarded the contract for Al Jubail desalination plant upgrade in Saudi Arabia.
Our optimized scopes include three different proprietary technologies of De Nora: SeaClor system. This system controls biofouling in seawater intake through electrochlorination technologies. De Nora TETRA filtration underdrain filters. These filters provide a trouble-free pre-treatment solution before the reverse osmosis, which is the heart of the desalination process. And finally, Capital Controls underwater chlorine dioxide generators. This is a technology, a proprietary technology of De Nora. These generators ensure safe and premium-quality final disinfection of the potable water. So we are executing a contract relating to one of the largest seawater ozone generation systems in the Middle East at the Tubli Sewage Treatment Plant in Bahrain. The project will enhance by 100% the daily treating capacity for reusing up to 400,000 cubic meters of sewage water for irrigation and agricultural purposes.
Another important project recently secured is upgrading a large filtration plant for a municipality in Florida, United States, originally supplied by De Nora. The plant treats 7,600 cubic meters per day of wastewater, of which 6,000 cubic meters of reclaimed water is used for irrigation of 21,000 households. Designed for advanced wastewater treatment and resource recovery facility, it uses our DE NORA TETRA filters for removing organics like nitrates from the wastewater. This green facility provides reclamation water for irrigation and captures the green energy for the digester biogas and produces 6,000 tons of fertilizer from the sludge it produces. Finally, in April, we concluded the commissioning of the project in Hong Kong to provide the citizens with safe drinking water throughout our on-site chlorination technology, characterized by high operational efficiency and environmental sustainability.
We can say today that all the city of Hong Kong is drinking water thanks to De Nora. Our robust backlog of WTS projects reflects our technological strength and positive impact on sustainable water management worldwide. We are poised for continued growth in the coming quarters and years. Let's go to the Energy Transition. The Energy Transition business has been a driving force behind our growth. In 2023, our revenues grew by an impressive 140%, surpassing EUR 100 million in revenues. Despite allocating 10% of revenues to research and development costs, we maintained a solid EBITDA margin of about 12%. We successfully realized and delivered 1 GW of technologies and equivalent for Green Hydrogen generation compared to 300 MW in 2022, so more than three times.
This ramp-up was driven by the excellent execution of the projects we have in our backlog, in line with the schedule agreed upon by our customers. In February, our partner, thyssenkrupp nucera, awarded us the orders to supply electrolyzer cells for H2 Green Steel for one of Europe's largest water electrolysis plants. This is going to happen in Sweden. This plant, currently under construction, will produce green hydrogen that will be used in one of Europe's largest integrated green steel plants. The end customer will significantly reduce its carbon footprint by adopting green hydrogen over traditional technologies. With these new orders, our backlog as of December 31st, 2023, is projected to 2.2 GW, providing consistent visibility into our production schedule for 2024 and also for 2025.
Our advanced technological profile, underpinned by our legacy in the traditional electrode business, positions us as a green hydrogen supply chain leader. Our 2.5 GW global manufacturing capacity further reinforces our competitive edge. We believe that integrated projects where clients oversee the entire process from green electricity production to electrolyzer and consumption, or projects where reliable off-takers are identified in advance, will drive the green hydrogen industry. Our portfolio reflects this belief, attracting reliable customers and off-takers. In summary, our success lies on our unwavering commitment to cutting-edge technology, execution excellence, and strategic partnership. We are poised to lead the way in the global transition to sustainable energy solutions. Okay. Now, in this slide, we have reported the main contracts in our backlog, the projects completed in 2023, and some key projects in our pipeline. We are working on the world's largest green hydrogen project, NEOM, in Saudi Arabia.
Production for the project is ongoing, and will continue through 2024 and 2025. The contracts for green steel projects in Sweden were signed in February 2024, and production will begin in the second half of this year. In addition, there are several projects announced by our partner, thyssenkrupp nucera, and included in the hot deals of our pipeline for between 1-1.5 GW, in particular two capacity reservations, one for a high multi-hundred-MW project in the U.S. and another for a 120 MW at the Neste plant in Finland to decarbonize its refinery processes. We maintain a robust market-leading position worldwide in the green hydrogen space, along with our partners, thyssenkrupp nucera. With that, I would like to leave the floor to Mass for the financial results overview. Mass. Thank you, Paolo. Good afternoon to everybody.
Before entering into the slides, let me just remind the four key numbers summarizing the achievement of De Nora in 2023. The first key number is EUR 231 million, which is our net profit, which is the result of both the IPO, the Nucera IPO, but also a result of a strong operating profitability. The second key number is 20% EBITDA adjusted that proves, one more time, the strength of our business model also in a challenging market scenario. The third key number is 4% revenue growth at constant exchange rate with particularly strong performance of green hydrogen, which growth ended at 140% with revenues above EUR 100 million at EUR 102 million, in fact. The last key number, EUR 68 million of positive net financial position, is the result of a very strong operating generated cash that allowed to sustain our strong investment for future growth.
Now, looking at the quarter results, you see that Q4 was the best quarter in 2023 with revenues of EUR 227 million, with a very solid EBITDA adjusted performance at 21%. Specifically, energy transition recorded the highest quarter ever with EUR 34 million in Q4 and with a 14% EBITDA in Q4. Water performance was also strong thanks to both water technology systems and also thanks to the beginning of the recovery in pools. So these are the key numbers for a very positive Q4. Now, looking at the overall 2023 year, we see that revenues, as already said, grew by 4% at constant exchange rate with electrode technology growing at 2.4%, always at constant exchange rate. Energy transition, our growth engine, with the increase of 140% year-over-year and with the 1 gigawatt equivalent of delivered products.
With water technology in double-digit growth with regards to the water technology systems, which grew was 17% that then was offset by the pools' performance, which, as you well know, in 2023 faced the destocking and normalization phase, which now is definitely over. Also, the aftermarket revenues remained strong, supporting the revenue expansion even in a weak macroeconomic scenario. In fact, aftermarket accounted for 42% of electrotechnology revenues in 2023 and for 37% of water technology systems in 2023. Going to the backlog figure, first of all, let me underline the record high backlog in energy transition thanks to the new order we received in February via Nucera for the H2 Green Steel project.
While the evolution in the electrode technology and water technologies reflects the excellent execution of projects, which, by the way, was in line with the planned schedule for those customers, partially compensated by new contracts acquired. In water technology, though, thanks to the strong order intake in January and February, we have already increased the backlog to EUR 147 million. Going on with the pipeline in our energy transition, you see that we have an extremely strong and growing pipeline with 2.2 GW, the equivalent of EUR 200 million proxy, in backlog with another 2.4 GW in what we call hot deals in a very advanced stage. And then we have another 63 GW of pipeline, of which I would like to underline the 15.9 GW of actively pursued projects. This figure in Q3 was 8 GW.
We have doubled this also very important bracket of our pipeline, which proves that the market and the projects are moving toward the hot deals and backlog. This is what keeps us extremely confident for our growth in energy transition. Going to EBITDA, overall, we achieved in 2023 a strong 20% EBITDA despite a challenging market scenario in electrode technologies that maintained a 25% threshold EBITDA, demonstrating, once again, the resiliency of our business model. In energy transition, we reached a 12% EBITDA margin in line with our plan and after discounting 10% R&D cost over revenues. In water, we reached a 14% EBITDA that is due to a lower mix, meaning lower pools in 2023, but also partially compensated with a strong performance of water technology system.
In terms of net profit, you see that the record high, EUR 231 million, you know that out of those, EUR 133 million are the one-off components from the IPO of thyssenkrupp nucera. It means that the ordinary performance ended at EUR 98 million. This is driven by a strong EBITDA, as we already commented, that covered our depreciation as a result of our CapEx investments and after the net financials, which have been positively impacted by our IPO, as we said. In terms of net working capital, at the end of 2023, we reached EUR 265 million with 31% incidence on revenues. This represents the lowest figure in the last three years.
It shows improvement compared to the figures also of September 2023, particularly driven by, as you can see, a consistent reduction in inventories, which reached our target of 30% on revenues and also thanks to the expansion of trade payables due to high level of Capex carried out in the last month of the year that becomes payable in Q1 2024. This also contributed, in terms of net financial position, to a very solid performance, in particular with a strong operating cash generation at EUR 172 million that more than covers our investment, EUR 105 million of Capex for growth and also our dividend distribution policy. We had a positive EUR 26 million impact from the green shoe, also related to the Nucera IPO. And we used EUR 17 million of cash for our buyback program.
This ended the year at EUR 68 million of net cash, of positive net financial position, compared to the EUR 51 million of December 2022. Having said that, I would leave to Chiara for the ESG Plan 2030.
Thank you, Mass. When we prepared this presentation and had to select a picture for this sustainability session, we started considering images related to a green environment, natural, clean, and safe water, green hydrogen molecules, renewable energy plants, and people, people working together in a safe, stimulating, and enclosing environment, and images related to local communities. All these pictures really represent our effort in the ESG journey.
But if we want to describe what sustainability by DNA means for De Nora, we have to come back to the photo of our founder, Oronzio De Nora, in his laboratory, working hard to find innovative solutions for a more sustainable future, solutions to improve the operating efficiency of the De Nora customers and to improve and reduce their plant impact on the environment. We think sustainability is a responsibility for us. As well as we are a leader in most industries in which we operate, we are committed to become a champion in specific sustainable topics, material for us, shaping the ESG profile of our industry. In 2023, we worked to set up our ESG Plan for 2030. And we did it starting from our materiality analysis. We found out the same material topics you can see in this slide.
We assessed our profile in all these fields and compared our performance with a basket of core and broad peers. Then we set up our strategy and ambition in the ESG space. We provide clean, sustainable, and innovative technological solutions while promoting a circular economy with engaged people who are eager to make a difference. Our ambition is to become a leader in green innovation and circular economy while boosting our climate action profile. The ESG strategy we set up in December 2023 is fully integrated into our industrial plans and guides our strategic decision-making processes. The plan includes a comprehensive agenda of flagship initiatives and targets organized around four pillars and grounded in solid governance. The first pillar is green innovation. This reflects our commitment to continually seek new solutions for enhancing the efficiency and sustainability of our technologies.
Here, key initiatives are the integration of a circular design guideline based on life cycle assessment methodology into our R&D processes, the development of a sustainability scorecard to evaluate the climate impact, circularity, and biodiversity profile of all our products, and then the reduction of noble metal contents in our coating recipes while enhancing production efficiency. The second pillar is about climate action and circular economy. Our clean and sustainable technologies underpin our strong handprint. That is our capacity to reduce climate change, enabling our customers to increase their energy efficiency, decarbonize and abate processes, and treat and reuse water. We are also committed to improving our carbon footprint, aligning with the 2030 Agenda. Circular economy is in the DNA of our products that are designed for a second life.
As in our business model, reusing our electrodes and the raw materials they contain is a part of our aftermarket services. In this pillar, flagship initiatives are a plan to reduce our carbon footprint and increase the use of renewable energy. We are committed to enhancing our waste management with particular care for the sustainability of our packaging, which is mainly made of wood. Lastly, we aim to optimize the circular use of the raw materials, especially noble metals. The third pillar centers on people. De Nora fosters a stimulating, inclusive work environment that prioritizes employee well-being and comprehensive physical and mental health alongside robust health and safety policies. As a global company operating across four continents, our multicultural essence is a strategic asset, actively promoting inclusion. The fourth pillar focuses on local communities and the supply chain. Here, initiatives relate to partnership and support for local communities.
But we are also committed to developing a sustainable supply chain, evaluating and engaging our key suppliers, and integrating the ESG criteria in the procurement processes. A strong governance orchestrates all these initiatives, including a growing set of ESG policies and linking the top manager's variable remuneration with the ESG targets. In these slides, you will find a quick picture of the main ESG targets embedded in our plan. But you can find a complete description of the plan on our website. In green innovation, the main targets relate to the setup of the sustainability product scorecard. We expect to assess all our new products by 2025 and all our products by 2027. We aim to have more than 80% of R&D expenses with a positive impact on SDGs. We aim to reduce the amount of noble metal content in our products by 4% by 2026.
In climate action, we aim to halve our scope one and scope two emissions and scope three emission intensity by 2030. In addition, we are committed to increasing energy from renewable sources up to 40% by 2026 and 100% by 2030. Concerning circular economy, we aim to reach 80% of deforestation-free wooden packaging by 2030 and 5% of recycled content in noble metal used in our products. In that space, we have to say De Nora is also engaged in activity to reuse the noble metal scrap generated in production processes and in some plants to recover the residual amount of this material in used electrodes. To care for people, we are going to adopt a diversity, equity, and inclusion policy and launch a mental health awareness project.
We aim to develop a sustainable supply chain with more than 50% of suppliers evaluated on sustainability by 2030, while we target two suppliers audits by 2025. Finally, with regard to governance, we align the remuneration of our top manager with the ESG plan targets. Specifically, we link 20% of our CEO's variable remuneration and at least 10% of key managers' variable remuneration to the ESG plan. To guarantee and accelerate an effective execution of the plan, we have set up a solid organizational structure and governance. The first element of this new governance system is the ESG Accelerator Lab, which works alongside the ESG function. It's composed of a permanent team and several focal points. The permanent team is responsible for the day-to-day execution of the plan.
It gathers the ESG function itself and other individuals from various functions across the company, from R&D, procurement, operation, human resource, and legal. Each member has specific expertise to contribute to the realization of the initiatives, underpinning the integration of sustainable projects with business day-by-day activities. Then we have designed a focal point for each operational site and company function. Another important element is the ESG Steering Committee, which reports directly to the CEO. It's composed of the De Nora top management. This committee oversees the monitoring of key performance indicators related to our sustainability targets, makes strategic decisions to ensure resources and remove potential roadblocks for the implementation of the plan, and defines actionable steps to be taken to improve performance and results. In these slides, you can find a quick overview of some of the achievements reached in 2023.
In green innovation, our Vitality Index, which represents the share of revenues from new products, reached 22%. We added 70 new patents. 66% of our R&D costs were focused on energy transition and especially on green hydrogen technologies. Finally, in 2023, we managed to lower the noble metal content by 5% versus 2021. In climate action, we managed to keep Scope 1 and Scope 2 emission intensity flat. We have installed 3.1 GWh of solar panels in our plants in Germany, Italy, Brazil. Particularly in Brazil, 100% of electricity needs will be covered with the solar plant. Concerning the circular economy, we registered an increase of 25% in electrodes reused compared with 2022. Then again, we got certified in July as a great place to work in Italy.
We invested in continuous development of our employees, achieving an increase of 9% in number of training hours and diversity, as testified by a 22% rise in women in managerial roles. We focused on adoption of new important group policies in several fields to strengthen our position in terms of sustainability. In 2023, we adopted the human rights and anti-corruption policies. In the first month of 2024, we will adopt the supply chain and environmental health and safety policies. Finally, this year, we received a strong external recognition, such as a AA rating from the top ESG rating agency, MSCI. Finally, before leaving the floor to our Chief Executive Officer, a few data related to De Nora's positive impact in 2023. We realized that 1 GW of technology for the generation of green hydrogen may be aimed at the decarbonization of hard-to-abate industrial projects.
24% of the De Nora consolidated revenues were related to water technology systems for safe and circular use and reuse of water, both in municipal and industrial spaces. Concerning the EU Taxonomy, the analysis of our activities revealed a 9% alignment of revenues related to the Energy Transition business unit, able to contribute to the climate change mitigator goal as manufacturers of enabling technology for hydrogen generation and use. Investment aligned with the Taxonomy was found to be 22% and included CapEx in the Energy Transition and also progressive investments for implementing our Gigafactory in Italy. In 2023, we analyzed the eligibility of our activity for the transition to a Circular Economy goal. We find that in this regard, a percentage of our aftermarket services, in particular related to recycling activities, are eligible for that.
We will continue to enhance analysis on taxonomy with a deep effort in improving our impact, also in terms of minimum safeguards and the do no significant harm requirements. All in all, we are excited about our challenging sustainability plan. Much work is needed. But we believe that we are on the right track. With that, I would like to leave the floor to Paolo for the midterm view presentation.
Thank you again, Chiara. Hi again. The pillars of our midterm strategy are growth, profitability, and sustainability. This is our GPS, our compass for the future business development. The growth will be pursued by delivering a step-up development of our energy transition in partnership with the leading players. We also aim to grow in both electrode and water technologies, leveraging our technological leadership, distinctive global manufacturing capacity, and long-lasting relationships with customers who, in some cases, have become real reliable partners. In addition, a key pillar of our development will remain the focus on aftermarket revenues that, relying on a wide and evolving install base worldwide, will support both sales volumes and profitability. Our business development is expected to be well-balanced across all the geographies in which we operate, from EMEA to Asia-Pacific and Americas. We expect to become a €1 billion company by the end of 2025.
As you can imagine, research and development efforts to improve the efficiency and sustainability of our products, coupled with expanding our production capacity, will be key enabling factors of our success. Profitability, which is underpinned by the best-in-class performance of our products and our strong execution efficiency, will be guaranteed by an increase in production volumes and continuous optimization of our operational activities. Our profitability and cash flow generation profile will also enable the group to invest in innovation and developing new solutions and production settings. We will do that by realizing our Gigafactory in Italy, for example, which will allow us to further develop our proprietary electrolyzers, Dragonfly, while enhancing our manufacturing capacity at the forefront of new production technologies.
Finally, we are firmly committed to enhancing our sustainability profile, as described by Chiara, with the ambition to become champions in some specific spaces of ESG, such as green innovation, circular economy, and climate action. In addition, our new ESG plan dedicates an extensive chapter to the people strategy, placing people at the forefront and recognizing them as the driving force for the company's sustainable development and realizing the corporate vision.
Let's now look at the expected trend of our reference markets. As you can appreciate in this slide, we operate in several markets worldwide, which is a strength. A differentiation of industrial application supports De Nora in successfully riding different and challenging macroeconomic scenarios, making our business model anti-cyclical.
For the electrode technology business, we expect stable, low single-digit growth in the chlor-alkali industry, while electronics and mining should perform better with a CAGR between mid- and high single-digit. In the water segment, almost all our end markets are expected to report mid- to high single-digit performance. In particular, a gradual recovery of the pool segment is expected as early as 2024, especially in the second half of the year. Finally, the green hydrogen market should expand at a mid-double-digit pace, boosting a higher rate of growth in capacity installed. Regarding the electrode technology business, we aim to maintain our position as a global leader by preserving our competitive advantage in reference markets through innovation, continuous improvement in electrode performances, and quality, leveraging our large portfolio of products, worldwide footprint, and relations with key customers and partners.
The strategic guidance encompasses the continuous development of our already cutting-edge electrodes to offer our customers increasing efficiency and sustainable performances, including the reduction of noble metals in our coating recipes. We aim to maintain our relations with customers and partners while investing in enlarging our manufacturing capacity with a flexible approach to market development. We target to develop our aftermarket services in all of our geographies, especially in Asia, leveraging on the new coating line in Suzhou and enhancing in electrode segments. Clients focus on performance and quality. Factors such as climate change, water scarcity, drought, and urbanization have made sustainable water management a top priority for the world. De Nora clearly plays a central role as our water technologies are dedicated to ensuring access to clean and safe water for communities and to develop more sustainable industrial processes worldwide.
Our water technologies are unique by design for their superior quality, durability, and their proven ability to meet customer needs in such a complex business. Our strategy provides a focus on the electrochemical business, which is expected to grow in several geographies, both in the municipal and industrial sectors, following the replacement of treatments based on chemicals with electrochemical systems for the on-site production of solutions containing active chlorine. These systems are more sustainable, safe, and cost-effective as they eliminate the problems of transportation, of storage, and handling of chemicals. In addition, we target the expansion of the disinfection and filtration business, leveraging a wide technological portfolio, also pursuing new business opportunities arising from the tightening of the regulatory framework in terms of treatment and reuse of drinking and wastewater, reducing the limits allowed for the presence of polluting elements, for example, PFAS, arsenic, and chlorates in the water.
Finally, we are committed to consolidating and improving our competitive positioning in the pool sectors, where we have an impressive leadership positioning with an 85% market share by leveraging the quality of our products, of course, and the consolidated relationship with the main OEMs in the sector regulated by multi-year supply contracts. Let's go to energy transition. As already mentioned, energy transition is the engine of our growth. Regarding market evolution, we expect consistent growth in electrolyzer install capacity up to roughly 100 GW by 2030, with alkaline water electrolysis representing a share of about 80% as a technology of choice for larger-scale projects. Our strategy for growth entails the development of partnerships with leading industry players and the enhancement of our manufacturing capacity in line with the market growth speed. In terms of products, we target the continuous improvement of our electrode technologies, focusing on performance, cost, and sustainability.
Once again, we are pursuing the optimization of noble metals in our coating recipes. We also aim to further develop our small-scale electrolyzer, the Dragonfly, which will be industrialized in our upcoming Gigafactory in Italy. A few weeks ago, we announced that De Nora is part of the European project HyTechHeat, along with Snam and Tenova. This project involves the use of hybrid technologies for the production of steel with low CO2 emissions. We will provide our Dragonfly electrolyzer, contributing to emission reduction in the traditional hard-to-abate sector. In addition, we have a pipeline of several projects for developing our electrolyzers, including an initiative in Greece. So here, you can appreciate our backlog and the different layers of our pipeline.
The pipeline grew in the last quarters, both in terms of gigawatt and in terms of value, reaching 63 GW versus 44 GW at the end of 2022, and a total value of EUR 6 billion, the highest level achieved till now. The average size of the actively pursued projects improved to more than 500 MW, testifying that the market is moving towards large-scale projects where our technology—I mean the advanced alkaline water technology—is preferred. Regarding geography distribution, North America and Europe account for more than 70% of the total. Still, we see growing opportunities in the Middle East, where the cost of renewable energy is lower, and there are simpler and faster permitting processes. Compared to the picture we gave in November, the hot deals decreased as the new order signed for the H2 Green Steel project in Sweden moved from hot deals to backlog.
As explained a few slides ago, the 2.5 GW of hot deals includes two capacity reservations signed by our partner, thyssenkrupp nucera, one in the U.S. for a high multi-hundred-MW project, and the second one in Europe with Neste. Let's look at our capacity in place and evolution to serve this promising pipeline. We are committed to enhancing our distinctive manufacturing capacity in the geographies where we already operate. Our focus is readiness and flexibility to market trends. This is why we have reshaped our investment program, targeting a manufacturing capacity of 4.5 GW for energy transition by 2026. The updated plan includes brownfield projects, while the Italian gigafactory will represent the only greenfield project.
We are proud to announce that, in partnership with thyssenkrupp nucera, we have been selected for the U.S. Department of Energy for a grant of $50 million pending negotiations in the frame of the commitment of U.S. government bipartisan infrastructure laws investment in clean hydrogen and electrolyzer manufacturing. The funding will be used to develop and introduce innovative technologies for alkaline water electrolyzers to considerably reduce the hydrogen production cost, for which De Nora will collaborate with this joint venture, thyssenkrupp nucera, to create groundbreaking solutions that facilitate the automation of gigawatt-scale alkaline water electrolysis production lines for clients in the North American market. In addition, De Nora is also a sub-applicant in five research and development projects, touching all the hydrogen generation technologies that have been awarded by the Department of Energy a total of $28.5 million.
These awards confirm De Nora's central role at the international level as an enabler of a clean hydrogen supply chain. We are pursuing an ambitious research and development investment plan to implement technologies that reduce the cost of producing green hydrogen to further accelerate the energy transition. In this context, the U.S. plays a strategic role. At our local plant, we are, in fact, building an Energy Innovation Center, a highly specialized center that will be the hub of hydrogen innovation. Government support then generates further opportunities to grow the energy transition segment in the country, which fits into the wider global development outlook for the coming years. Turning to the other geographies, we are enlarging our manufacturing setup in Germany to enhance energy transition production. We are pursuing a synergic plan expansion for China and Japan in Asia.
In 2023, we completed the first expansion of our Suzhou plant in China, tripling the coating capacity and improving the energy transition capacity to 500 MW. In addition, we will celebrate the expanded production facility realized at the Okayama site in Japan in the following weeks. Oh, sorry. Sorry. As you already know, our manufacturing facilities are highly flexible. They can be switched from one family of electrodes to another, including green hydrogen, of course, balancing the different speeds and needs of our final markets in a very efficient and profitable way. Before we leave the floor to Mass for the financial guidance, let's have a quick view of our Gigafactory in Italy. The realization of the Italian Gigafactory in Cernusco sul Naviglio, near Milan, is a cornerstone project for De Nora.
We are building a state-of-the-art plant with a production capacity of about 2 GW equivalent equipment. This plant will manufacture and further develop our proprietary small-size electrolyzer, the Dragonfly. In addition, we will realize electrodes and equipment dedicated to alkaline water electrolysis for green hydrogen generation, as well as for fuel cells to convert green hydrogen into energy. The new plant is sustainable by design. It will be served by photovoltaic panels, geothermal energy, will feature digitized and energy-efficient production processes, and finally, will enable the redevelopment of a disused industrial area with positive impacts to the local community. I firmly believe that this project is crucial not only for De Nora but also for the Italian and European hydrogen market. In this regard, the Italian government will partially fund eligible costs under the IPCEI framework of the European Commission.
The project is being considered eligible for EUR 63 million, of which the Italian government has already approved EUR 32 million. Ultimately, the Italian Gigafactory is an investment that will shape our future. With that, I would leave the floor to Mass for the financial guidance. Yeah. Thank you, Paolo. So finally, let me say, after what has been a challenging 2023 and considering the different speeds of our markets, considering also our leading position in the industries where we operate, and particularly also taking into account the forecasted pace of growth in the green hydrogen market, we target for group revenues in the period 2023-2026 an annual growth rate CAGR in the high single-digit area. And we expect to become the EUR 1 billion company in 2025.
The growth will accelerate gradually in the next three years, with 2024 increasing at a lower pace compared to 2025 and 2026 due to the progressive recovery in pools and electronic segment, which will be more and more evident starting from the second part of 2024 and then becoming stronger and stronger in 2025 and 2026. Our growth engine, of course, remains energy transition business with a 40% average annual growth rate between 2023 and 2026, supported by what we have already seen: a very strong pipeline, a very strong competitive position that we already confirmed in 2023, and a very strong partnership with thyssenkrupp nucera. So this will give a CAGR of 40% in the green hydrogen space. Electrode technology is expected to grow in the low single-digit CAGR, while water technology is expected to grow at mid-single-digit CAGR 2023-2026.
In terms of profitability, we expect during the planned period an EBITDA margin between 18% and 19%, excluding the one-off cost of the Italian Gigafactory, as we have already commented. Finally, on top of that, we confirm that the Gigafactory, just to give a quantification, is impacting the overall EBITDA between 1 and 2 percentage points in the period of plan. In terms of investment, we foresee EUR 290 million of CapEx, out of which 60% will be dedicated to energy transition, which, in turn, will be mainly dedicated to the increase of our manufacturing capacity throughout all of our geographies. Last indication, we will maintain our dividend policy unchanged, so up to 25% dividend payout in all the three years of the plan. This means, as we already said in a nutshell, that our plan is based on growth, on profitability, and on sustainability.
Paolo, maybe for your final comments before Q&A.
Yes. Good. Thank you, Mass. Well, final page with our remarks. Solid 2023 growing financial results despite a challenging scenario with a robust profitability and solid cash flow generation. Number two is energy transition business unit, +140% year-on-year revenues, promising backlog and pipeline. So once again, we are the number one in the world in this new business. Number three, improving our distinctive manufacturing capacity, 2.5 GW focused on green H2 and growing continuously. Number four, new sustainability plan for 2026 and 2030, launched already to accelerate our ESG journey. Number five, consistent shareholders' remuneration with a EUR 0.123 per share dividend proposed. Last but not least, mid-term view, as Mass just said, growth, profitability, and sustainability. Thank you very much. We leave now the space for Q&A.
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Anyone who wishes to ask a question may press star and one on the touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Michele Della Vigna from Goldman Sachs. Please go ahead.
Thank you very much. Thank you for the presentation. The margins in the business remain very impressive. I wanted to delve a bit more in an area where we've seen a downward revision of previous expectations. If we look at the energy transition, the targets had been retired for a long time, but the targets used to be around EUR 500 million. And at the moment, it looks like, with your guidance, for 2025, we would be around EUR 200 million.
Clearly, there's been a complete change in the speed of the market development, especially in the U.S. with the delay of the IRA implementation. But I was wondering, how conservative do you think you've been in your new guidance? Do you think there could be upside to it if projects start to move in the U.S.? And what would be the signs that perhaps the market is starting again to go back to a more substantial speed than what we've seen in the last 12 months?
Thank you. Thank you, Michele. I think that in terms of capacity, we have been growing, and we will grow always a little bit in advance to be ready, to be qualified, to welcome, of course, a growing demand like we expect. So on that side, production-wise, we can face it.
But we believe that our projections are pretty much realistic based on what you just said, based on the fact that it's a fact that this market is growing, is growing considerably, and it sees us playing a fantastic leadership role, but it's growing at a lower speed than what we originally foresaw. So we had to adapt our projections based on a realistic growth speed despite the fact that we, together with our joint venture, thyssenkrupp nucera, are winning most of the projects that are entering into final investment decisions. But nevertheless, we have to recognize that the speed is a lower speed than what we originally thought.
And let me add that now we know pretty well the market. If you look at our pipeline, we are the market. We are definitely the world champion and the winner, and we know everything which is moving out there.
We believe that the pipeline is extremely strong, but we know that it takes time to move into FID and then into our backlog. And even when it enters into our backlog, it takes time to be manufactured and invoiced. So we are extremely confident that this growth and this huge pipeline will materialize in terms of revenues, but don't want to push in terms of expectation on timing. It will happen. It will be stronger. It will be us, but in the proper timeline.
Thank you. The next question is from Jacqueline Lee with Bank of America. Please go ahead. Hi.
Good afternoon, everyone, and thank you for taking my questions. I'll ask two, if I may, and I'll go one at a time. So looking at your business plan, you expect 40% average annual revenue growth over 2023-2026 for energy transition.
That implies roughly EUR 280 million of revenue in that division by 2026. How much of your energy transition revenue by 2026 do you think will come through thyssenkrupp nucera, and how much of it do you think will relate to third parties?
Thank you. We expect the majority coming from nucera. Being nucera the winner of most of the significant projects in terms of size worldwide, of course, we believe that the majority will be coming from them.
And let me stress that this, to me, is not a risk factor. It's absolutely an opportunity. Looking at who is generating the pipeline, who is winning the project, who is executing the project today, this is nucera, nucera, nucera. Of course, we are happy. We'll be happy to work with anybody else as long as they will bring real projects and real business.
But in this moment, one of our major strengths, not risk, is our JV and strong partnership with Nucera. And let me say vice versa.
Okay. Thank you. Next question. Continuing on your business plan, you've cited adjusted EBITDA margin expectations of 18%-19% at the group level. Could you maybe talk about the factors impacting each of the divisions? What's driving that overall 18%-19%? Thank you.
Well, we expect a slight adjustment in ET due to potentially higher price pressure from competition, particularly in the Chinese market, but still remaining at a very interesting level. We expect stable EBITDA in water technology systems. We expect stable EBITDA in pools.
In energy transition, we know it's going to be stable by our definition because we keep investing an extremely high amount in R&D in order to maintain and increase our competitive advantage in terms of performance in electrode technology. So honestly, we could squeeze out more than that 18% to 19%, but we decide not to do so because we want to keep investing in ETR and also in ET for our future growth.
Okay. Thank you very much.
The next question is from Matteo Bonizzoni with Kepler Cheuvreux. Please go ahead.
Thank you and good evening. I have three questions. The first one is more specifically the outlook for 2024. If you look at your backlog at the end of the year, it was down 12% at consolidated level.
Electrons were down 15%, water minus 23%, and energy transition, including the order from H2 Green Steel, up 5%. It seems that this backlog evolution is not a good proxy for your revenue evolution because you are expecting revenues in 2024 slightly up. Can you a little bit help us understanding the difference between the two trends, between backlog and revenues expected for this year? And then I would like to know, for the EBITDA for 2024, is it fair to assume that compared to EUR 171 million of last year, could be, let's say, flattish or maybe slightly down? Second question is as regards the outlook for the energy transition. If you do the calculation for 2026, you now expect revenues in the region of EUR 280 million.
Can you a little bit also, in this case, to help us understanding the evolution of the revenues in this division for 2024 and for the next two years? And last question is as regards the margin. You are pointing to a range between 18%-19%, which compared to 20% in 2023, so slight erosion. As regards the one-off cost related to the Gigafactory, my question is, which should account for additional 1%-2% of margin pressure but is outside the adjusted EBITDA. Can you help us understand a little bit more the nature of this cost and the phasing of these extra costs in the three years? Thanks. Okay.
Starting from backlog and revenues, as already explained, after the reduction of backlog in 2023 due to the execution of new product not fully compensated by new order intake, we have seen already that on ETR, on green hydrogen, now we have backlog that is record high. So this gives clearly strength to our 40% CAGR over the three-year period, 2023, 2026. In terms of water, as I already also commented, we have already regained some backlog thanks to good order intake in January and February. This increasing trend is going on. Not all of this new backlog, though, is transforming into revenues in 2024. This is the reason why, having given the high single-digit CAGR, we also say that there's going to be an acceleration where the growth in 2024 is going to be lower than the 2025 and 2026 figure.
In terms of ETR, as already commented, your second question, you can take the guidance of the 40% CAGR with the same concept of acceleration. But on that, we know pretty much what's going to be the 2024 because we have already the full capacity scheduled for the year. So it's a reliable forecast. In terms of EBITDA and the impact on EBITDA from the Gigafactory, the Gigafactory is based on what then are also the eligible costs for the IPCEI program that are mainly R&D costs and pre-industrial phase for the small-sized electrolyzers that will be one of the key products to be developed and then manufactured in the new Gigafactory. So it's basically OpEx of R&D and OpEx of the pre-development phase of this new product line.
Okay. Sorry, Massimiliano. There was only one question left.
As regards to 2024 EBITDA at consolidated level, is it fair to assume flattish or slightly down or maybe around flattish? Thanks. Sorry. Flattish in respect to what? Consolidated EBITDA for 2024. Well, also in 2024, there will be the impact of the Gigafactory on the one side. The other one is going to be the higher competitive pressure that we expect on electrodes business. So on that, we have been pretty realistic in terms of if we need to slightly lower pricing in ET, we will be willing to do so.
Okay. Thank you.
The next question is from Isacco Brambilla with Mediobanca. Please go ahead.
Good afternoon, everybody. Three questions from my side. First one is a clarification on 2024 guidance. Is it fair to assume that your statement indicates pace of growth for this year lower than rest of plan applies also for energy transition?
So we should assume it's growing less than 40% year-over-year this year. Second question is on the backlog for energy transition. It would be quite helpful to have an idea of the deadlines attached to the EUR 200 million backlog you are indicating for energy transition. I appreciate you cannot be 100% granular, but any sort of color would be helpful. Last question is on net working capital. This year, delivery has been even ahead of plans, I would say. 30% was probably the target for 2025. Could you share some new medium-term targets for net working capital on sales, say, by 2025?
Thanks. Okay. For net working capital, we are not disclosing intermediate points in the plan. It will depend also on the schedule of our Capex of the EUR 290 million when we will deploy those.
In terms of guidance for 2024, the idea of taking the CAGR with the acceleration is true across the business line with lower impact on the ETR. So ETR is not the inclination of the acceleration ETR is going to be lower than in the other business line.
The next question is from Chris Leonard with UBS. Please go ahead.
Yeah. Hi, guys. Hopefully, you can hear me. Thank you for taking the question. Just looking at the CapEx guidance out to 2026, I believe that in terms of installations of electrode capacity or electrode capacity, we're now less than we were previously, sort of 4.5 GW by 2026. And just to get clarity on whether or not you've changed pricing for CapEx per gigawatt, I think previously, you were looking at about EUR 50 million. It looks per gigawatt. It looks a lot higher now.
So could you just double-check on my assumptions for that, please? And on the second question, looking out to the revenue guidance for 2026 as well, around EUR 280 million, just looking at the thyssenkrupp nucera pipeline at about 11 GW, they're speaking to potentially being signed by 2025 out of their active pipeline of 16 GW. I'm just wondering if you have any expectations on that hot deals pipeline you have at the moment at 2.4 GW and how much you think can be converted over the next 12-18 months when we look at that thyssenkrupp nucera figure at about 11 GW of an active pipeline that they have up at 19 GW and you guys have 16 GW.
Thanks. Okay. In terms of, let me say, alignment between thyssenkrupp nucera's pipeline and ours, the answer is yes, it's aligned.
You know that there's not a rigid correlation at single point in time because of several reasons. They work and they function at percentage of completion while we do at manufacturing and delivering and invoicing. This can create some time difference. The two pipelines are constantly and perfectly aligned over time. I can confirm that over the business plan period, the largest revenues for us will remain Nucera. Therefore, this alignment is absolutely confirmed. Sorry. The first question was I'm not sure I got the first question. Can you repeat it, please?
Last question is just on CapEx per gigawatt when you look at your gigafactories being maybe historically EUR 50 million and where we are now.
Well, yeah, we forecast a slight increase in the cost in the CapEx per gigawatt. It's not dramatic, but it's there.
Let's say that now we also have relatively good experience in expanding our capacity, which is based not only on the hydrogen-specific new capacity. Our capacity is extremely flexible. And so also, our experience in ET is helping us contain the inflation on the CapEx per gigawatt. But yes, the effect is clearly there.
Thank you. And just one last one, if I can. You speak about global method prices and content coming down for you guys by about 5% from 2021. Has there been any change on your electrolyzer pricing or electrode pricing up to thyssenkrupp nucera? Just looking at the revenue guidance, perhaps to 2026, are we still going at about EUR 95 million per gigawatts or perhaps EUR 100 million per gigawatts, or has that reduced?
Thank you. We are considering now EUR 90 million per gigawatt.
Okay. Brilliant. Thank you for that.
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