Good morning everyone, and welcome to our Full-Y ear 2021 Results Live Q&A Session. Before taking your questions, I would like to hand over to our CEO, Alessandro Profumo, for some initial remarks. Thank you.
Thank you, Valeria, and good morning to everybody. Before starting the Q&A, I would like to highlight some key messages. 2021 was an important year of delivery, and we are pleased to report today a strong set of full- year results. Meetings or exceeding are all above target once again. We saw strong progress. We have strong performance in the [inaudible] governmental, with 88% of group revenue, and also pre-COVID levels, excluding other structures . We expect a gradual recovery after plan. We have growing top line, we are improving profitability, and a structural improving cash flow. We are also making progress on ESG, and we are benefiting from cooperation at European level. We expect to make further good progress again this year. We are well-positioned for the medium and long terms, thanks to our solid fundamentals.
Finally, let me highlight again our important purpose aimed at helping to provide security for people and nations. This could not be more clear today in these times of geopolitical threats and uncertainty. With this, and together to Alessandra and Valerio, we are ready to take your questions. Thanks a lot.
Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad now. To withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Our first question today comes from Martino de Ambroggi of Equita. Your line is open. Please go ahead.
Thank you. Good morning, everybody. The first question is a company specific issue, the free cash flow. Just to understand what is the bridge in terms of, particularly in terms of net working capital contribution, in terms of Aerostructures lower cash absorption. If I understand correctly, and I do correctly my math, could be in the region of EUR 300 million also in, or probably less, in 2022. Something about the factoring, Alessandra, in your remarks, you said it was reduced. Just to understand the value for this reduction and what is expected in 2022. This is the question concerning the free cash flow. You also mentioned EUR 300 million of divestiture.
I clearly understand you cannot share with us all the details, but we read several pieces of news in the past few months concerning Oto Melara. BUS Automation is not anymore up for sale. If you could elaborate on this. Thank you. The last is more general. Based on the recent geopolitical events, what in your view is going to structurally change in Europe? I'm referring to German increasing military spending. I read something about new common initiatives, and also possible risks for the supply chain, if any. Thank you.
Okay. Shall we start in the same order you have raised the question? Alessandra, we start with free operating cash flow.
Yes, Martino. You're asking about the bridge. Let me start with the 2021 results. We're very pleased with the free operating cash flow results we have achieved in 2021. It's a EUR 200 million step up versus 2020, and it's all driven by solid good contribution from governmental and defense businesses. On top of that, we have strengthened the quality of the free operating cash flow. As you have highlighted, we have significantly reduced the factoring that we had to resort to during the COVID times, down approximately EUR 600 million from EUR 1.1 billion to EUR 500 million. We have also accelerated payments to suppliers. All in all, it's a much stronger and solid cash flow in 2021.
Now bridging into 2022, we're starting from this solid base that we have achieved in 2021, and we're building on it. With continued growth and margin expansion in the governmental and military business, coupled with increased contribution from joint ventures, as well as important delivery of milestones on a number of contracts that will generate an unwinding of working capital. All of this is married with a slightly lower cash absorption Aerostructures compared to 2021, when it was close to EUR 340. That would be, you know, the order of magnitude that I would refer to. All of this is also coupled with a very strong focus within the organization on cash flow generation at every level of the organization. If you want, Alessandro, I can go to the last question on supply chain.
Yeah. You can continue to answer, and then I will take the floor on disposal.
Sure. On supply chain, what we're seeing, Martino, is that, clearly, you know, the situation is in flux. We are monitoring closely all the areas of potential exposures and putting in place major mitigation plans. What we're seeing today is that the most sensitive area is the electronics component. This is not going to come as a surprise to you because this is what you are all hearing from the sector in general, from everyone who use these components. On the platform side, we are in good shape in terms of availability of components, and we are registering a contained and manageable price increase. On electronics, on the other hand, the situation is more fluid, and we have high visibility for the first half of the year.
While on the second half of the year, we are putting in place mitigation plans, talking with suppliers, extending times of contract with the goal of locking in components. Clearly, the situation needs to be of maximum alert and, you know, it's being treated closely at Leonardo and will be object of a continuous update from our side throughout the year.
On disposal, Martino, now we are in the process of finalizing the first disposal of the Automation business. This is, the proceeds are considered in the forecast for the debt. I'm not talking of Systems Defence. On System Defence , we continue to work. Clearly, what is going on at the European level increases the strategic meaning of such kind of move. We have to understand clearly what will be the approach by the other countries, since we think that the unfortunate but existing geopolitical situation will be a strong incentive towards a new European defense system.
Clearly, at Leonardo, we are part of that with major programs, talking of Eurofighter or Tempest, NH90, or other activities. We are fully convinced that when the land business there will be the need for creating something more European.
Okay, thank you.
Next question comes from Ben Heelan of Bank of America . Please go ahead. Your line is open.
Good afternoon, everyone. Thank you for taking the question. I hope you are all well. My first question was on helicopters. Actually, do you think about price escalation in backlog in helicopters? Is there price escalation on those contracts? How are you thinking about obviously massive inflation in aluminum and steel prices over the past few months? How are you thinking about offsetting inflation in that business? The second question I had was on the free cash flow guide of EUR 500 million. I think you said that you're expecting a small improvement in the structured cash burn this year, and you've guided for, you know, EUR 80 million improvement in EBITDA. Where is the other incremental step up in free cash flow coming from? Is there any prepayments we need to be aware of?
Is it just better working capital performance? Just any color that you could give there would be super helpful. Thank you.
Sure. On helicopter backlog and price escalation. Well, let's remember that, you know, backlog is also partially locked in, both in terms of future revenues as well as in terms of actual costs already incurred that are now in work in progress and customer advances on the balance sheet. A portion of it is already naturally hedged by the progress we have been making on the backlog, and that's not yet accounted in the revenues, but is in a part of the working capital. How do we plan to offset inflation?
Well, in 2022, we see engaging our communication on the platform side with key helicopters included, thanks to leveraging the inventory we already had in-house and negotiation, which has been in place since the end of 2021 with our key suppliers to contain all price increases. Clearly, 2023 will be a year where the exposure and, you know, the impact of the inflation will be higher. Nonetheless, what we have to bake in is the fact that starting from this year, in our new bids for new contracts, we are factoring in this heightened level of inflation. Therefore, we are incorporating the effect of the cost increase in our pricing. On your cash flow question. How are we setting up cash flow from 2021 to 2022?
The major savers are the increased use of lean throughout the group over former levels of inventory, unwinding of working capital. There are no major prepayments on single contracts that we are expecting. This is all organic growth of working capital, and we deliver important milestones on a number of contracts, and those milestones have already been worked on in our work in progress for 2021 that will be monetized naturally with milestones delivering to customers. There is also going to be a higher contribution from our joint ventures, which will be peaking in terms of dividend payments.
Okay, perfect. Just a quick follow-up. So it should stay, because there's not inflation in the contract in helicopters per se, but it's when you rebid, you will be rebidding assuming the higher levels of raw materials that we're seeing today. It's not that the contracts will naturally inflate. It's just when you go into that rebid process, you will have the new input from an input cost perspective and then pass through. Is that how I should think about it?
That's right, because the majority of our contracts are fixed-price contracts.
Okay. This is super great. Thank you very much.
Sure.
It is important to say that since we don't have to so-called white- tail, so usually we start to work on an helicopter when we have the order the lead— the raw material have been already bought before the actual events, so the problem you were raising clearly, is there a huge number of white- tail to used as production without having the buyer?
Our next question today comes from Christophe Leonard at Deutsche Bank. Please go ahead.
Yes. Sorry, good morning. Thanks for taking that question. I have two. The first one is actually on return on capitalized costs. They were increasing in 2021. I wanted to understand where it's coming from, which division, and where you actually see that increase. I mean, whether you keep the further increase in the future years. I will follow up with the two other questions.
Of course. The increase you see in 2021 is, in a way also magnified by the reference of 2022, which is totally skewed on the low side. It's totally on the low side. You remember that in 2020 we seen an extraordinary amount of investments for multi-year periods. That was the driver. The main driver was an extraordinarily and anomalous low number we booked in 2020. In 2021, we are going back to a more ordinary level in the range of EUR 160 to EUR 200, which is the figure we are targeting also for next year as a result of the completion of investment programs, especially in the helicopter and in trainer business for our defense business, where we are finalizing the certification process in order for the machine to enter into service and be delivered to customers.
Got you. Thank you. That's very clear, the other question is too on the structure before you had a loss of EUR 2 million in the Aerostructures, which is more than double what you had in previous quarters. How should we think about the loss going into 2022? I mean, is it the same run rate, i.e. EUR 18 million for a quarter, or are you seeing it as an improvement going forward? The last question is on the gross margin on the new contracts that you have in terms of the order book. Are you seeing an improvement in those margins in the contracts that you actually book or those you are expecting to book in the coming months?
Okay. On Aerostructures, no, I wouldn't use the fourth quarter performance as a run rate for the full year. I think the better position, if you look at the full- year, EBITDA for the business and we expected that compared to that full year, we will be doing better from a P&L standpoint, as we said that we will be doing slightly better also from a cash flow perspective. On gross margin on new contracts, we are clearly in a highly competitive environment across the board. The strength of Leonardo is the one anchored on the combination of domestic markets, Italy, U.K., U.S., and Poland, and export markets.
Those the diversification across geographies for our order book, a low concentration in single programs and single geographies is allowing us to maintain a you know strong competitive position in a context where clearly competition is going up and pressure on prices is there.
Okay, thank you.
Let's take two questions from the web. The first one from Charles Armitage from Citi. For Alessandra, your 2022 EBITDA guidance is after COVID costs, which were below the line in 2021. How much were this cost in 2021 and what do you expect them to be in 2022?
Yes, absolutely, Charles. You are correct in 2021 COVID cost were around 50 million. And in 2022, we plan to reduce slightly that number around, you know, 40 to 45 million.
Okay another question from the web. Monica Bosio. This is for Valerio. Good morning, everyone. When do you expect the EuroMALE project will start to have positive fallout on Grottaglie and Foggia plants. And could you please give us more details on that.
Okay. Thanks for the question. You know, really the signature of the contract is only 20 days old or 15 days old, so it's a new contract, even if is included in our plan. As we said also during our last quarter speech, so now, we are really starting the industrial part in Aerostructure of the program, together with all the divisional activities. Because, as you know, EuroMALE really is the Leonardo. A large impact program involving Electronics, Aircraft, and Aerostructure and not only a structure. So really we are not seeing now after 15 days modifications in our plan th e long lasting program and seeing a real impact in Aerostructure volumes and manpower, starting from the end of our plan 2024. The Prototype phase and then going on to the serious activities,
Okay. Thank you. Another question again from the web, two questions for Alessandra, divisional level. The Space division delivered stronger than expected. Should we expect this growing trend also in 2022? For helicopters, despite the impact of Qatar opportunities, would you see feasible the achievement of a double-digit target in 2022?
Okay, thanks, Valeria . On space, we did see an increase year-over-year of performance, which is really driven by the recovery from the manufacturing segment of space. What we are seeing is a trend that we have put together with our joint venture partners makes us confident that there is going to be a very strong growth to achieve good performance. I also want to highlight that 2021 improved in cash for the manufacturing business and extraordinary components related to the adoption of our IFRS principle, which is generating some benefits that we will not see will not be repeated in the year to come. On helicopters, if you or someone wants to say something about it.
On helicopters, really, the EBITA number is sort of affected by the Qatar contract. The Qatar contract is adding to the order intake. As we always said that this is a factor that will be on little or late. We are already in the double-digit EBITA. I think that this is an operational number because we do expect to be flying that kind of contract. It is also, I think it is clear that when you are diluted by the fact that you are flying on a contract where, as we always said, it's a 40% work share, you know that this is a new business for us, that kind of activities. In the U.S., it became sort of obsolete. It means that it is migrating.
Our next question comes from the conference call from Tristan Sanson of BNP Paribas Exane. Please go ahead.
Good morning. Thank you for taking my question. Three actually. The first one is a good performance from Space. I want to know, as Alessandra mentioned as well, you mentioned 5% of growth in Space. The dividend is not the dividend from Space. If you had some history before the Space dividend. Thales Alenia Space has not paid dividend in 2021, but I think it says 0.31 there. Do you expect Thales Alenia Space to start paying dividend in 2022? How should we see the trajectory of dividend from JVs and how that will be distributed after?
Thank you for your question. I'll start from the mid one. Dividends for joint ventures. You remember correctly, absolutely. In 2021, half did not distribute dividend. Now we are engaged in conversation with our joint venture partners, and in light of the solid results that the business has generated on all metrics from new order intake to net income, we're confident that 2022 will be the right year to restart dividend distribution. Clearly all of this, together with continued good contribution from the other joint ventures, will be a driver of cash flow generation in the long run. The extraordinary item related to tax that booked in 2021, it is meaningful.
It is an element that you have to take into account in the midst of projecting the results in the coming time. On factoring, you are correct that our, I think, non-business factoring or organic factoring would have actually been negative here between the unwinding of the factoring guarantees, 2021 versus 2022.
Okay, that's very clear. Thanks for your answers
Thank you.
The next question comes from Alessandro Pozzi of Mediobanca. Your line is open, Alessandro.
Hi there. I have two questions. The first one is on actual delivery. I'm interested if I can get a bit more color on delivery for the seven programs between 2022 and 2024. Especially ATR, I believe it's going to increase more in terms of deliveries this year understanding that there has been a delay. Also the second one is on restructuring of Airbus portfolio. Can you give us a bit more idea of restructuring costs in terms of full tax rate and any financial charges that may occur from the measures that you mentioned before? The last one is on Airbus A220 family.
With this launch that we saw last October, what is the total number of aircraft orders that you anticipate to deliver within the next three years for the airline?
Thanks. Thanks, Alex. As you understood, really we are working on our plans. Coming back to what you are asking about, independently of our manpower reduction following that we agreed back in January. We have strong increase in our Aerostructures volume. We are really coming higher than pre-COVID levels, both on the A321 and the A220. ATR more recent levels with respect to 2020. We are planning an increase also in 2022. We are really coming back, as you said, to volumes more than 50 by 2024. At the same time, we are also doing good on the 787 because we reviewed deliveries on 787 this month. We are planning to maintain delivery during this year.
Having a guide of improvement also on the 787. I'm not talking about the 767 because 767 is a stable program in terms of delivery for its life. The plans that we have is not including any real obstacles in terms of new programs, even if, as you understood, we have also additional opportunities that we are catching in the process and that we are planning to put in our plan in short time.
What level of the delivery to expect, again the 2022 for the 787?
In our plans, we are allowing delivery which is a bit similar to 2021.
Okay. How many do you deliver in 2021 , can you remind me ?
We are planning to have deliveries more than 30, because in 2022 we have 28 over more than 30 in 2021. We are planning to get 65 deliveries for our division is strictly linked with doing deliveries as well is customized. We are strictly linked as we have planned. Up to now, as I said, we are more than 30, so 10% more than the last year.
Okay. Just maybe a follow-up on that structure. Do you expect ATR to break even this year?
The break-even on ATR is apparantly under the table of discussion with Airbus, on our JV. Obviously, the break-even is strictly linked as Alessandra Genco mentioned, not only to the deliveries, and we are evaluating how to achieve in a short time the break-even in ATR. Yes.
Okay, Alessandro. Quickly going through to your other questions on fixed rate, we confirm the guidance that we have provided in the past around 25%. Financial charges around EUR 200 million. The number you see in the 2021 accounts is more than rate levels. As you can see, the FX revenue is particularly low and as a result of some, you know, volume effect on hedging activities. As we expect in the forecast a linear trend that amount will grow. Therefore, the overall number is more in the range of EUR 200 million. On restructuring costs finally, our target as of now is to have a number for 2022, which is below the 2021 figures. These are for the standard, for the cyber solutions.
Security. This is clearly an important business for us. If you consider that when we are talking of cyber, we usually not only do cyber security, because there we have as well secure communication. We have as well control of what we call the infrastructure. We have many different activities so that they always are secure and command and control for security business. We of course see a significant growth of this division in security. We are starting from EUR 11 million, it should grow to EUR 100 million. A significant growth in percentage. If you consider the overall group, the driver for our growth as a group is somewhat related to the other three main divisions we have. Namely, Defence Electronics is by far the most dynamic one.
It's representation, just, more or less the same level really with, some differences, because they are related, different also. I think that we have to consider that cyber security is becoming more and more important for any business, because you know perfectly well that many authorities are providing new rules on the cyber security within the vehicles we have, the services we are bringing to the market. So it's always becoming more and more important to be sure that just like an airplane or whatever it is are secure. When we are talking of Secure Communications, for instance, this is one of the capabilities that we have in our Cyber & Security, but it is bringing the business. We are working on process that there is also the, let me say, cyber security software.
The critical activities which are very important, where we are working as well with the quantum technology, photonics. All areas which are related to this business. This is one of the trend for Leonardo, because we have inside this service for us and for our customers.
Our next question comes from Zafar Khan from Société Générale. Please go ahead.
Good morning. This is Zafar Khan from Société Générale. I have a couple of questions, please. Just, housekeeping effectively. The net interest number for 2021 was well down on 2020. The net debt at the end of the year didn't really change that much. Is it just the medium-term financing at much lower rate? What's behind that? That's the first question. Also just if you can give some indications of where this is going in 2022. Fixed rate. Could you please tell us what the underlying net interest was in 2021 and what you're looking for 2020 medium term? We haven't been able to access the detailed accounts.
Could you just tell me what the gross capitalized interest was and how much was amortised in the year? That's the third one. Sorry to replicate. The interest structure cash consumed in 2021, can you give me what the number was there, please?
Zafar, we had some issue yesterday this morning with the website, but now the integrated report is available on the website.
Yeah, the site from last quarter's soft close blocked everything, so we can't access any company stuff from the web. I'm struggling a little bit to know how. If you could maybe send me the PDF by email.
Yeah, We'll send it over to you, of course . So, trying to get through your list, Zafar. Actually, the formula. Our pre-tax profit for FY 2021, it was EUR -339. Gross R&D. I think we have a slide in the presentation, maybe we can go through it, we can remind it. Both gross and net capitalized R&D. You know, we will take it from the page and send it to you. On tax rate, we are targeting as a target here is continued at 25%. It was 22% in 2021, but again, you know, if you look forward, the guidance is consistent with the past at 25%. The net tax number, it's a blend of all elements.
There is the element of interest expenses on debt. There is the second component of a number of assets and liabilities we have on the balance sheet, and there is the FX component. It is as we like to show the mix of various effects that get to that number. As you think about that number, the target in 2022 is going to be around EUR 200 by virtue of the fact that the FX hedging activity will go up, therefore the FX amount will become a bigger or always be negative because we are receiving net foreign exchange loss of US dollars as we receive the dollars from customers. The amount on the interest expense is the result of multiple effects, 200 overall.
Okay. Just on the interest expense on the debt, because I haven't seen the cost. How much of that number is just the interest expense on your debt? How does that compare with previous years?
The interest rate is also in the presentation. We have announced 2021 as the lowest level that we had registered in the past few years benefiting from the European Central Bank to be consistently help the rate to go down and also you know, market-driven opportunity with our new policy. We're now at 2.3%, and we've lowered that amount by 60% since 2015. Also in that case, Stephan will lead you or guide you to the specific page in presentation where we have the yearly trend.
Actually, I want to flag that whole presentation. That'll be fine. Thank you very much, indeed. That's really helpful
Sure, thank you.
Our next question comes from the line of Gabriel Gamborova of Banca Akros. Your line is now open.
Just, thank you and good morning everyone . Just a couple of questions on my side. The first one is on Eurofighter. If you can possibly comment on the opportunities you see around. Are you involved in any tender? Not asking which ones, but do you see opportunities here and now? The second one regards your 2022 guidance. I see that you are assuming a $1.18 billion-dollar sales rate. Wondering if you could remind me what your sensitivity to this specific exchange rate. That's it. Thanks.
On Eurofighter, I will start, and then I will give the floor to Valerio. Clearly, we are seeing opportunities. There are still opportunities for second launch in countries where we are still achieving sales. Because of the 2021 delays of Lena are not factored in our analysis. There is the opportunity. There is also some opportunity of new sales. We consider the Eurofighter as an important program, where and I'm sure you have seen in the presentation also the chart on the value of customers to book, where they not only of the sales we made, but as well as the customers to book is really relevant for us in Leonardo. We are considered a benchmark in terms if cost and quality of the support to the air force. I don't know if Valerio wants to add.
Probably I can only add that as I said last year, really Eurofighter is and will be a long-lasting program. Long waiting tempest Eurofighter will leave at least another 20 years. Means that we are planning to find new customers. Also, because the last configuration that we delivered the end of last year to ATR is top of the range in terms of technological level. We are planning also with the long-term evolution program for coordination and interface to platforms, sensors, seekers, and so on, in order to maintain a real competitive edge going forward. We are working, as Alessandro said, on potential customers, new customers, also awaiting the coordination, because remember Germany and potential Spain is enlarging the fleet.
Okay. On FX sensitivity, no news versus the other years. It's all translation effects, and it's in the range of $10 million-$15 million on billions of dollars, and on revenues, it's $100 million-$150 million and $250 million-$300 million on this current year. I think it' s disclose in the presentation, Valeria, correct?
Yeah. In the guidance slide, you have the exchange rate assumptions that we have in our budget.
Okay. Thank you very much.
Thank you. Our next question comes from Harry Breach of Stifel. Your line is now open.
Thank you. Can you hear me?
Yes. You're quite loud.
Thank you for taking my question. Can I please ask you guys, maybe four slightly different ones. Firstly Alessandro around a year ago, you decided to put on hold the IPO of DRS, saying that market conditions were not solvable. Now, in the last couple of weeks, we've seen a major shift in the market sentiment toward defense stocks and a very clear upward re-rating. Do you think that market conditions are now favorable for that IPO? Secondly, some other defence stocks in Europe have spoken about hearing a clear intent increase in the amount of inquiry for their product, some foreign countries and in the last sort of two, three weeks. Given the recent event, can you let us know, have your helicopter of defense seen any significant increase in inquiries or request or proposal recently?
And thirdly, Alessandra, I think in the past, Leonardo used to say that around 65% of the business were militarial goverment classified or changed your categoy than Leonard show or what military. And then final question, does energy cost—it's a hot topic at the moment, can you tell us a little bit over how many years or months into the future have you fixed your electricity and debt purchasing?
We will continue to monitor the market. We keep updated all documents necessary. It is not a matter of 1 week or 2 weeks. We continue to monitor the market, and then we will take the decision when the time will be open. Today there are no news in this space still on our side. In terms of new inquiries, we are not seeing a huge amount of inquiries. We receive some requests, but not yet seeing a significant pick up. Also because the decision, for instance, the German decision to raise dramatically the amount of funds allocated to defense is a decision of some days ago.
We think that this is really relevant because it is a huge change in terms of appetite towards defense by European countries. We were convinced of that when we took the decision to invest in Hensoldt. We are seriously very positively impressed by the fact that this has been so fast and with the support of a different government from the one there was focused on defense before. I'm sure that these tragic events will create. You always said, and I think today you told me two years ago, you were talking of being part of the European project.
What we are seeing with Tanker and Eurodrone, what we are starting to see with the new European defense industry for the next 10 years, I would say is important. We, Leonardo and Nexter, in these positions. This is what we can say. Alessandra, your take for the other questions?
Sure, sure. On the mix between military and governmental, your reading is absolutely correct. There has been how should I say, relocation of the governmental part of the business. Now we're talking about 88% of defense, military and governmental, which in the past used to be within the civil component. I think that explains a lot of the delta that you were expressing, and you have it clear in your mind. On energy costs.
Clearly, if you see the number of Aerostructures today in development, in demand, Aerostructures, the program, is half of what it was in 2018. Clearly, as the other defense is growing and Aerostructures is one of the key components for achieving even a significant business. We know that at the end of the time, as a fact, that we call it not significant. There is a trend that at the end of the time we will be where we were in 2018. Clearly, the way to arrive at that we grow a little bit, but in absolute we grow even more. The net weighted average between 2018 and 2021 today. This is really important.
I think it's important to say that for this event many options is very relevant. When in many cases technologies are utilized for a civil purpose. Let me mention that we sell to governmental agencies. We classify governmental, but are not military costs, which is the engagement. For instance, if we sell helicopter to the fire brigade, these are civil helicopters, but are considered as governmental. We think that firefighting will be one important element in the future because in many countries there will be more and more customers that are looking at. Today we spend significantly on all these things, but again, part of them.
Thank you, Alessandro. Harry, your last question on energy costs. We are hedged throughout the current year and for a large portion of next year. As Leonardo, we're not directly affected by pricing in terms of on energy. Equally, we have to consider that the entire supply chain is suffering from these price increases. Clearly we can't say that we will not indirectly be affected by what's happening around us.
If I need to say one word on that, because when General Bonfanti and me, Roberto Cingolani, we started to work significantly on all ESG elements, and energy consumption and energy sources were one of the items which we focused on in terms of ESG, so that we achieved significantly out of products. They go in one of our factories, and there on the roof plenty of solar panels. We have also production from wind coming from the wind production lines. Really, we moved a lot on the green technologies even before the European Union. This is a very strong point for us. Of course, the CEO himself and from the system production support.
Our company, which is an internal company which is working on our industry. Now we are with Enel promoting a few services. For instance, for the defense, member country and also for the places where the defense is located and sites. We are really working with our usual customer in terms of services in order to provide green solutions for the industry.
Thank you very much, Alessandra. Just one follow-up, CapEx next in 2022 . Can you give us some indication?
Yeah, we are going to be around, you know, 600-700 on rate.
Very good. Thank you. Thank you, everyone.
Thank you.
Peter, another question from the web. I understand it's too early to discuss, you know, it's too early to talk about it, but you mentioned there are some incredible opportunities concerning the Italian National Recovery and Resilience Plan. When do you expect to hear some of the big projects, and could you provide a rough indication of the potential amount of these funds you are participating or will participate?
As you know, we've been overseen by Valerio with a dedicated team. Just to remind you that most probably you remember three weeks, you know that there is on the table more than EUR 1 billion, which has been allocated by government. The plan allocated on six different missions, which are the usual green revolution, digitalization, health, inclusion, innovation. We are working on all these activities, and we have created a lot of potential programs, some types of that are more mature. I mean, already carried out paperwork in order to be on the table for the issuance.
We plan them for mainly probably the end of this year to be more mature in those parts of 2022. The first one mainly probably starting from October, something like that, and will be included next year. We plan to be a growth opportunity for short and medium term. We are working mainly on several growth projects, focusing on health monitoring, environmental monitoring, sustainable mobility, and actually on the national hub, the PSN, on which we are in a consortium. We are awaiting government decision.
Thank you. Apologies on the call, which I know can make some questions difficult again.
Absolutely, we have a question from Christophe Leonard of Deutsche Bank have a follow-up. Your line is open again.
Thank you for taking my follow-up question. My follow-up question was on the free cash flow pattern beyond 2022, clearly say there is some unwinding working cap in 2022, how should we think about this in 2023? I mean, should we expect something negative? Not negative sorry, below 500 million the same time your midterm guidance is quite positive as well. The question is should we expect an increase in free cash flow in 2023 versus 2022? Or is it heavily back and loaded in 2024 and 2025?
The answer is depending on the point of view. We have a 30-year plan for the total investment 2021-2025 accumulated EUR 2 billion. We are also saying something more because the conversion rate will be, in theory, we are not in an area of 1.30 euro, but we know the reality. We are currently at the end of the plan, the conversion rate will be at 6% or 8%. We will be between 1% and 3%. In this particular strategy, I mean, before, we were assuming maybe plus or - 5 in the EUR 3 billion accumulated.
At the end, when I was 53 years, we are really actually about 10% of the conversion.
Thank you.
I think that's the final question.
If that's the final question, really, I thank you. Unfortunately, we are still in a remote mode, but currently things are improving in terms of COVID. I hope that we will restart also in personal meetings. I know that there are many video call already organized, but it is an effective way to meet each other and to talk. Really thanks to all of you for this time in the beginning.
Thanks, Valerio Cioffi. Keep it coming. Just a few minutes to go.