Good afternoon. This is the Chorus Call Conference Operator . Welcome, and thank you for joining the ENAV Full Year 2021 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Vittorio De Domenico, Head of Investor Relations of ENAV. Please go ahead, sir.
Thank you, operator. Good afternoon, ladies and gentlemen, and welcome to ENAV 2021 results call. I'm joined here by Mr. Paolo Simioni, ENAV CEO, and Mr. Luca Colman, ENAV CFO. They will be running you through the formal presentation. After that, we will be happy to answer to your question. With that, I leave the floor to Paolo.
Thank you, Vittorio. Good afternoon, ladies and gentlemen, and welcome to ENAV full year 2021 results call. 2021 has been again a tough year due to several waves of COVID-19 pandemic, with related safety restrictions which have impacted the entire aviation sector. Despite this challenging environment, we preserved full business continuity, maintaining the highest safety standards, and at the same time, taking care of the health and the safety of our employees. ENAV confirmed once again its position as best-in-class ANSP in regulated services among member states subject to EU performance scheme, with the lowest average minutes of en route delay per flight provided to airlines. With regards to our core business, as occurred in 2020, also in 2021, the protective regulatory framework defined by European level limited the impact from the pandemic.
Today, I'm glad to announce that the European Commission has notified the Italian state that the performance targets included in the performance plan submitted in November 2021 are compliant with the EU-wide targets for the third regulatory period. In the coming days, the EU Commission will publish the decision. Moving forward to the non-regulated business, our focus on digitalization and innovation resulted in a double-digit growth year on year of non-regulated revenue. We continued to proactively manage the emergency with the health of our employees as top priority, and we have looked forward to signing an agreement with the union to manage the post-pandemic smart work.
We also gave our contribution to Italian economic recovery, signing agreements with the government for a total of roughly 110 million related to the National Recovery and Resilience Plan. On the ESG side, we approved and started the implementation of the new and more challenging 2021-2022 sustainability plan, and we obtained the prestigious Science Based Targets initiative validation with regards to our climate change strategy. On the financial side, we optimized OpEx and CapEx in preparation for full traffic recovery at the pre-pandemic level. Based on the financial results of the period and the other relevant elements just mentioned, the board of director has resolved to propose to the general assembly meeting to distribute dividends for a total amount of EUR 58.5 million, equivalent to EUR 0.108 per share.
Moving to the next slide, let's focus our attention on 2021 Group's results. Service units for both en route and terminal increased year-on-year by 44.9% and 36.3% respectively, showing solid signs of recovery and reaching respectively 57.6% and 54.2% of 2019 levels. That I remember was the best years of our performance in the ENAV history. Traffic volumes were better than expected, especially during the summer, when managed flights were close to pre-pandemic level. Net revenue in 2021 increased by 8.5% year-on-year, reaching EUR 836.6 million, driven by revenue from operations, as well as revenue from non-regulated business.
This grew double digits, 22.3% year-on-year to a record level of EUR 33.0 million of non-regulated revenues. Even if costs increased year on year, following an almost back to normal summer season that prolonged itself up to the end of October, EBITDA showed solid performance, increasing 5.5% year-on-year to EUR 222.4 million, with EBITDA margin at 26.6%. Net profit grew by 44.6% year-on-year, reaching EUR 78.0 million. CapEx was EUR 85.6 million, 6.4% lower than 2020, and in line with the guidance provided during the year.
Net financial debt, as expected, raised in 2021 and reached 484 million because cash from operations still lower than the investment cost, with a net debt to EBITDA at 2.17 times. Despite this debt increase, our liquidity profile remains solid, with a cash balance of 225 million. On the slide number three, we can find the en route traffic volume 2021 related to the four largest European countries, as usual, shown during this meeting. Italy is the fourth largest country by en route service unit behind Spain, Germany and France.
Traffic volumes in 2021 increased year-on-year, with Italy showing stronger traffic recovery by 44.9% than in the other major European countries, which saw an average growth of 26.9% year-on-year if considering all countries adhering to the EUROCONTROL. With regard to the operational performance in terms of average minutes of en route delay per assisted flight compared with the assigned target set by regulator, ENAV delivered the best performance amongst the big four member states subject to EU performance scheme. The result has been achieved thanks to the ability of all our staff in providing ATC services efficiently and with the highest safety standards, despite the fast-changing traffic volumes recorded during the year.
This performance would have qualified us for the bonus envisaged under the bonus malus mechanism established by the regulation, which was suspended for 2020 and 2021 in order to support the transportation sector in this difficult period. On the sustainable front, I'm proud to show you in this slide our 2021 achievements. We delivered tangible results under each pillar on which our new 2021-2023 sustainability plan is based. We completed the development of our platform for the management of a sustainable supply chain, and we obtained the ISO 37001 anti-bribery certification.
We completed in the same airport the integration of our approach system into the air traffic control center, and at the same time, we developed and started to implement an internal communication plan to enhance the employees' sustainability culture. We moreover defined and publicly announced ENAV's sustainability proposal, and we were able to obtain validation from the Science Based Targets initiative with regards to our climate change strategy. Finally, I'd like to highlight that our effort in fighting the climate change doesn't stop at direct and indirect emissions, but goes beyond. Thanks to our Free Route technology, we allowed airlines to reduce carbon emissions for a total of 152 million kilograms of CO2 in 2021.
With this, I leave the floor to Luca for a detailed view of the results.
Thank you, Paolo, and good afternoon to all of you connected to the call. On slide five, let's take a look to the en route traffic, where service units increased 44.9% versus 2020, driven by a solid and very long summer season, which tapped into the second half of October. Within en route traffic, national and overflight segments posted the highest percentage increase, 51.2% and 51.2% respectively, with international segments growing 36.7% year-on-year. As you can see in the first graph, overflight remains the most important component and accounts for 45% of the total traffic, while international for 33% and national for 24%.
In the second graph, you can notice a return to standard seasonality within 2021 quarters, even if volumes are still lower than pre-pandemic levels. The noteworthy element is the quarterly traffic trend, which shows sequential improvement compared with 2019, moving from a 69.4% decrease year-on-year in the first quarter to a 15.7% decline in the fourth. One final good news on the traffic, on the en route traffic, in the month of March 2022, managed flights were approximately 89% of those managed in the same period of 2019. For what concerns terminal traffic, as shown in the next slide, service units increased 36.3%, driven, as for en route, by a solid and prolonged summer season.
Within terminal traffic, the domestic component increased 44.6% year-on-year, while international increased 31.6%. Traffic rose in all three zones, with zone two and three showing the highest increase. As for en route, also for terminal traffic, it is important to highlight the 2021 quarterly traffic trend, which shows again the traditional traffic seasonality, together with a sequential improvement compared with 2019 pre-pandemic trends, moving from a 74.3% decrease in the first quarter to a 22.2% decline in the fourth. Now, before commenting 2021 financial results, let me provide you some good news on the regulation.
After the resubmission to the European Commission in November 2021 of our RP3 performance plan, the European Commission, with the document COM(2022)294 final, has notified to the Italian state that the performance targets included in the performance plan submitted in November 2021 are compliant with the EU-wide targets for the third regulatory period, as set in Decision EU 2021/891. In the coming days, the European Commission will publish the decision, as Paolo said before. This is the final act of a process that took almost two years to be completed, and that was needed in order to consider the effect of the COVID-19 pandemic on aviation sector, not only in the last two years, but also, and more important, in the period from 2022 to 2024.
Now, all the elements of suspension on the regulatory framework have been withdrawn and analyzed back to normal with tariff reset and based on updated traffic forecast. Moving now to slide nine, we can see total net revenue at EUR 836.6 million, increasing by 8.5% year-on-year, reflecting a solid performance in the regulated and not regulated businesses, which determined a lower balance accrual in comparison to 2020. This year, en route revenue increased by 39%, while terminal revenue by 66.5%, thanks to the higher traffic managed in 2021 because of the reduced year-on-year impact from COVID-19 pandemic. The higher traffic managed in both en route and terminal has determined a balance decrease year-on-year by 23.2%.
For the combined period 2020-2021, balance has been determined following the EU Regulation 2020/1627 of 2020, published in fact in November 2020, with the 2021 amount taking also into account the Commission's cost efficiency target on determining the unit cost that was published in June 2021, and the performance plan submitted to the EU Commission in November 2021. Moving from the core business to the not regulated one, we can see a double-digit increase year-on-year in not regulated business revenue, which reaches EUR 33 million. The notable performance was mainly driven by IDS AirNav solid commercial activities, especially abroad, where several new contracts were signed in 2021.
Turning to page 10, we can see the effect of the above-mentioned traffic increase on 2021 total operating costs, which increased by 9.6% year-on-year. The rise in cost was mainly booked during the long summer season we experienced in the year, and was mainly related to the variable component of the personnel and other operational costs. As shown in the first graph, personnel costs went up by 8.3% year-on-year due to a rise in the variable remuneration, which was caused by the lower use of holiday balance for approximately EUR 11 million, that was brought almost to zero in 2020, setting an unfair point of comparison with 2021.
Second, the second one is the higher cost for approximately EUR 5 million related to the already mentioned traffic increase, which during the summer we should have overtime and holiday working for our controllers. Social security costs and other personnel cost rise was mainly due to the early retirement scheme for executives, accounting for EUR 11.5 million. To be noted that this is a one-off event occurred in the 2021 P&L, and that will see the related cash out in 2022 and 2023. Looking at external costs, those increased by 11.9% year-on-year, excuse me, mainly driven by high expenses for EUR 1.1 million related to the increased activities in non-regulated business. Second one, increase in the EUROCONTROL's expenses for EUR 3.6 million.
Cost of energy for EUR 2.6 million due to increased unitary price. Maintenance cost on owned equipment for EUR 2.5 million, and controllers business trips and other costs for EUR 1.9 million in connection to the restart of the normal operations. On the next slide, we can see ENAC's revenue and EBITDA evolution in 2021 compared to last year. The revenue increase of 8.5% was driven by both regulated and non-regulated revenue growth, partially offset by lower year-on-year balance accumulated in the period. Within revenue from operations, the largest year-on-year increase was recorded in the en route component, which grew by EUR 90.9 million, and in terminal revenue, which went up by EUR 54.4 million. Both solid performances were driven by positive evolution for traffic, especially during the summer season.
Non-regulated business contributed to the total revenue growth with 6 million. Another effect deriving from the traffic recovery is the lower year-on-year amount of balance accrued, for approximately 90 million less than last year. Once again, for the combined period 2020 and 2021, balance has been determined following the EU Regulation 2020/1627, and with the 2021 amount taking also into account the Commission's cost efficiency target on determined transfer costs that, as you remember, was published in June 2021, and also the performance plan that was submitted to European Commission November 2021. Minor contribution to total revenue came from EUR 0.8 million increase in revenue from exempted flight and EUR 2.2 million rise in other operating income.
As a result of the solid operational performance, EBITDA stood at EUR 222.4 million, increasing 5.5% year-on-year, with the EBITDA margin at 26.6%. Let's now look at the items below EBITDA, where D&A decreased by 6.1% year-on-year, mainly as a consequence of a reduced capital expenditure in more recent years. Provisions and write-downs decreased EUR 7.8 million year-on-year, mainly due to the higher than usual provisions in 2020, in part related to some litigation then successfully closed in 2021, coupled with the write-down of some old equipment performing in 2020 and not repeated in 2021. As already occurred in previous quarters, we have a positive financial income and expenses.
Out of the EUR 10 million year-on-year delta is related to the reversal of the actualization of the previous year's balance and half is related to the interest incoming income coming from the assignment without recourse of the previous year's tax credit related to the IRES. We have cashed in the principal amount of the related interest, which has been included here as an income. Those positive contributions more than offset financial expenses in the year. Moving now to the income taxes, we can see a year-on-year increase, mainly to the higher taxable income in the period and lower deferred tax related to the accrued balance. As a result of these movements in the P&L, and thanks to the regulatory protection fully visible in the balance accrued in the year. We achieved a net profit in 2021 of EUR 78 million.
In the next slide, we can see a summary of ENAV's liquidity and financial position, which remains solid despite pandemic effect in our cash flow. We closed the year with EUR 225 million cash at 91 million decrease versus year-on-year 2020. In addition to the available cash, we also have undrawn credit line for EUR 294 million, out of which EUR 220 million are committed. Looking now at the net financial debt, it reached 484 million, compared with a net debt of 245 million at the end of 2020. The change was due to cash from operations, which on average during the year remained lower than cash costs.
To be noted that despite the low 2021 tariffs applied to airlines, during the summer season, traffic levels were enough to put us in a cash neutral position. With regard to this year, we expect to be cash positive given the tariff has been raised and aligned to traffic forecast expected for 2022, which should be, remember, 85% of the pre-pandemic level. We estimate that if we look at the recent weekly trend seems to be conservative. The net debt on EBITDA ratio for 2021 stood at 2.70x, compared with 1.1x we reached at the end of last year.
We have for sure noticed a new line in the table showing 42 million of noncurrent trade payables to be considered as debt, following the concept indication number 5, 2021, issued in May 2021. This amount includes only the gross negative balances to be given back to airline after the next twelve months. Of course, the balance accrued in the P&L as revenue is net and already discount these 42 million. Compared to previous years, this is a novelty, excluding which the net debt should have been 442 million, and the ratio to EBITDA would have been 2x. Moving on to slide 14, let's have a look at the main movements in our cash flow. Cash balance decreased in 2021 by 92.1 million as a consequence of different cash movements.
On the positive side, we have already commented on both the net profit of EUR 70 million and the D&A contribution for EUR 129.2 million, which more than offset the investments we had for EUR 85.6 million, out of which 59.9 million cash. On the negative side, both net working capital for 74.8 million and other assets and liabilities for 289.6 million absorbed cash. Net working capital decreased mainly due to the dynamics of trade receivable and payable, still impacted by the COVID-19 pandemic, which also drove the reduction in assets and liability, which mainly include, as you can imagine, the balance.
Finally, on the debt front, we repaid existing debt for 63.7 million and, at the same time, we cashed in 100 million from the new loans signed in July. As a result of this movement, we closed the year with a net cash of 225.2 million, which remains more than adequate given the traffic reset performance starting from January 1, 2023, and the traffic trend expected also for the year. Last slide, before leaving the floor, to Paolo, shows our shareholders' remuneration trend.
After one year of pause in the distribution of dividend due to the COVID-19 pandemic severe impact on our cash flow, the board of directors resolved to propose to the general assembly meeting to distribute a dividend in relation to the financial year 2021 for a total amount of EUR 58.5 million, equivalent to EUR 0.1081 per share. Record date will be October 2022, after having cashed in the summer season's revenue. With that, I hand the call back to Paolo, who will close the presentation with our 2022 outlook and key figures.
Thank you, Luca. With regards to our 2022 outlook, we expect traffic on a 2022 full year basis to recover at approximately 85% of pre-COVID levels, with en route reaching 8.5 million service units with the summer season peaks at almost pre-pandemic level to offset Omicron negative impact faced in the first quarter of the last year. Total revenue and non-regulated revenue are expected to grow low single digits year-on-year, as well as EBITDA, while CapEx is expected to rise to roughly EUR 105 million. The next slide, the other key takeaways before opening the floor to your question.
Despite the challenging environment, we posted solid operational and financial results, ensuring full business continuity with the highest safety standards, confirming once again our position as the best-in-class provider of operating performance amongst the big European service providers. Our relentless effort towards digitalization and innovation allowed us to reach a record level of non-regulated revenue since the acquisition of IDS AirNav in 2019. We have reinforced our ESG commitment, deploying a new and more challenging sustainability plan, receiving the Science Based Targets initiative validation for what concern our climate change strategy. On the regulatory front, the European Commission notified to Italian state that its performance plan was compliant with the EU-wide target set in June 2021.
Our outlook, as already said, is positive for the year 2022, especially for what concern the summer season, and we expect a marginal impact on our business coming from the Ukraine and Russia conflict. Based on the financial results of the period and the other relevant element just mentioned, the board of directors has resolved to propose to the general assembly meeting to distribute dividend per share for the fiscal year 2021 to be paid in October 2022. With that, we are now ready to answer your question. The first question is from Nicolò Pessina
Good afternoon. Thanks for taking my questions. First, can you explain the reasoning behind the dividend? The total amount suggests a payout on the normalized equity free cash flow of approximately 40%, while we were used to at least 80% in the past. Should we take this as a new policy for the future also? Second question on the regulation. Is the notification of the European Commission of the thirteenth of April the technical final approval of the framework for the 2022-2024 period, or is there any other document that has to be released to get to the final approval? Last question on the guidance. Revenue and EBITDA both growing low single digits in 2022 seem to suggest no operating leverage.
Can you explain the trends you expect for OpEx in 2022 and the key drivers behind these trends? Thank you.
Okay, Nicolò, I will take the questions. I start from the last one. Sorry, from the regulation. Regarding the regulation, what the normal European Commission does is to send the communication to the member state and then to each state, and then to summarize in a so-called decision that normally is published after a couple days, a couple weeks. They have sent to all European states the decision for what is the notification, right, the real technical term. The notification to each state with a document that shows exactly what is the confirmation or not of what concerns the compliance with the EU target.
They, as I said, they kind of summarize in a one-only document. Well, we don't expect any problem now because, you know, the notification is something formal that has been sent to the state, actually. It's not actually public, the decision. That's the reason why we just waited for the official, the final official, because officially, actually, they have sent the notification to the state. It's something that's been done. We have this notification.
From the regulator.
From the regulator. Right. Thank you.
We received from the regulator this kind of information with a formal way, not with information by phone. Also with the paper that represent the decision of the European Commission related to our performance plan.
For what concern your first question about the dividend, what we have done was to distribute the profit, net profit produced by the ENAV for the parent company. That is what we have done. We fully distribute that in part, that value. For what concern finance, for what concern cost, to think that as the traffic is increasing, we have planned and we foreseen to have I would say a single-digit higher cost in term of operating cost, generally. Operating cost for me is external cost and personnel cost.
Just to keep, I mean, to manage the higher level of traffic that is foreseen in the budget and is foreseen in the performance plan. Let me say also, there is actually what is actually happening and in these days.
During the last seven days, the percentage of traffic that we had in our area control center has reached 85%-90% of the traffic level of 2019. We are now at this kind of level, just managed during the last weekend and during the last seven days.
Okay. It's very clear. If I may, just a quick follow-up on the dividend. Should we think of a 2022 dividend with the same approach you applied to 2021?
Okay. It's okay, now we have dividend policy in place. I guess the board of directors will see how the year will go on, and then we decide, you know, the real amount, the final amount of-
In other words, as I said last year during this kind of meeting, after the approval of the situation of 2020, I said that I confirm to provide an adequate return to the shareholders, like ENAV has always done, but ensuring that this does not stress the medium-term prospects of the company.
Another way we have our dividend policy as guidance and in concrete, I think today you may measure our return to the dividend with the concrete decision that we had for the next year. We will see at the same guidance, and at that time we will decide what will be possible to do, taking in place our dividend policy clearly.
Okay. Very clear. Thank you so much.
The next question is from Aleksandra Arsovska of Equita. Please go ahead. Ms. Arsovska, your line is open.
Can you hear me? Okay. Thank you for taking my questions. Just a brief, actually follow-up on the previous questions. Can you hear me now?
Yes. Yes, Aleksandra.
Okay.
We hear you.
Okay. Thank you. A follow-up on the previous questions. Since now you have this notification by the regulator, can you provide us the figures of the determined cost and tariff you submitted in November for not only 2022, but till 2024? Then a second question, again, on the guidance. Especially the EBITDA guidance seems to me quite conservative. Do you see any potential room maybe for some management actions, or maybe higher traffic allowing you to get maybe a better, let's say, result performance? Thank you.
Okay. Starting for the second question, let me say this is the figures that we have now on our budget, on our planning, and this is something that we think that we can reach. Say that, I mean, we can always improve, but you know, the period is not so clear, so future is not so clear, so we prefer to have this target set and work to beat this target. For what concerns the data, the tariff and the information inside the performance plan, we need to wait. We want to wait the decision of the commission, see what they publish, and related to that, we will decide what to publish, so in relation from what they actually will do.
Okay. Very clear. Thank you.
Once again, if you wish to ask a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time.
Thank you, everyone for joining us for this call. Thank you, Paolo. Thank you, Luca. For any further follow-up question you may have, please feel free to follow up with us in Investor Relations here in Rome. Thank you, and bye-bye.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.