Welcome to the Maire First Quarter Financial Results Conference Call. My name is George, and I'll be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the conference, your lines will be in the listen-only mode. However, you will have the opportunity to ask questions towards the end of the presentation, and this can be done by pressing Star 1 on your telephone keypad to register your question. If you require assistance at any point, please press Star 0, and you will be connected to an operator. I'd like to have you call over to your host today, Ms. Silvia Guidi, Head of Investor Relations. Please go ahead.
Good afternoon, everybody, and welcome to our First Quarter 2025 Financial Results Conference. My name is Silvia Guidi, Head of Investor Relations. I'm joined by our CEO, Alessandro Bernini, and our CFO, Mariano Avanzi, who is replacing Fabrizio Di Amato, who is now fully dedicated to NextChem Growth as Managing Director. Mariano has been in the group for the last five years, lastly as Deputy CFO. Fabrizio Di Amato is also with us and is ready to address your questions on the STS Business Unit. At the end of the presentation, we will be happy to take your questions. Let me now hand over to Alessandro for some introductory remarks and overview of our operational performance.
Thank you, Silvia, and good afternoon, everyone. 2025 has started strong. The first quarter has shown solid growth driven by the execution of our backlog, an effective operating leverage, and high-value-added services. As a consequence, both revenues and EBITDA have grown by over 35% year-on-year. Our brilliant financial results have been accompanied by a robust order intake spread across several and new strategic regions, progressively diversifying our geographic footprint and increasing our revenue visibility in the medium term. Finally, on April 24th, we paid the highest dividend in our history, EUR 114.5 million, which, at today's prices, represents a yield of 4%, one more proof of our commitment to our shareholders. Let's now take a closer look at the operational performance of the first quarter. Our Commercial Division has been working at full speed, helping to generate EUR 3.5 billion in new awards in the first three months.
This represents a book to bill of over 2 in the quarter. We did not stop here. This month, we added another EUR 900 million, bringing the year-to-date total to EUR 4.4 billion. This is over half of our stated target of EUR 8 billion in new awards expected in 2025, and we are just at the end of April. Such a strong commercial performance has led to an increase in our backlog to EUR 15.4 billion at the end of March, representing a backlog cover of over 2.4. In line with our EPC operating model, our backlog exposure to the U.S. is negligible, with one project which is almost completed. At the same time, technology licensing and associated engineering services are not included in the current proposed tariffs, which is a positive factor given the attractiveness of the U.S. market for our STS business.
More importantly, our procurement network is diversified and globally spread, with a strong focus on Europe, Asia, and the Middle East, where in-country value strategies play a leading role. Now, let's turn our attention to the order intake and backlog by business unit. The Sustainable Technology Solutions Business Unit secured new awards for EUR 112.9 million in the first quarter. These projects encompass a wide business spectrum, from technology licensing and engineering services to proprietary equipment for hydrogen production, fertilizers, low-carbon fuels, and waste-to-chemical. These awards have boosted our backlog to around EUR 360 million, reinforcing our commitment to sustainable innovation. On the other side, the Integrated EPC Solution Business Unit secured a new award of EUR 3.4 billion in the first quarter, further strengthened by EUR 900 million acquired in April. These new projects highlight our strategic focus on diversifying our global footprint and delivering advantaged solutions to our clients worldwide.
The main awards include an EPCC contract for a hydrogen production unit in Malaysia and two EPC contracts for a petrochemical project and an upgrade of an existing complex in Central Asia and sub-Saharan Africa. The strong order intake not only increases our backlog to EUR 15 billion, but also highlights our strategic focus on fostering growth in emerging countries, helping our clients extract more value from their natural resources through superior engineering solutions. Let me now provide you with an update on the progress of the Hail and Ghasha projects. The project is well on schedule, with an overall progress of around 25% versus 17% at the end of last year. Engineering activities are on track, and procurement is advancing, including manufacturing and shipments of steel structures, piping, and electrical transformers. Construction is progressing, with all subcontracts awarded mostly to local companies in line with the in-country value strategy.
Most importantly, we are proud, really proud to have achieved around EUR 10 million saved man-hours. Looking ahead, our commercial pipeline remains robust at EUR 59 billion, up compared to December and net of the April awards. This growth is driven by new prospects, including large fertilizer initiatives. This is proof of the strong and resilient fundamentals which keep supporting the downstream energy segment. We confirm our expectation for the 2025 full-year order intake at around EUR 8 billion, of which EUR 4.4 billion have been already secured in the past months. The new expected awards are spread across Central Asia, North and sub-Saharan Africa, the Middle East, and Europe. Key prospects include gas treatment projects, polyolefins, circular methanol, ammonia, and operational maintenance services. We expect a few of these opportunities to materialize really very soon. Let's now move to the quarter financial results with our new CFO.
Mariano, the floor is yours.
Thank you, Alessandro. First of all, I would like to personally welcome our financial stakeholders. I am looking forward to meeting and working with you, with all of you, in the weeks and months ahead. That said, our financial results continue to show sustained growth across all key performance indicators, with increased profitability. Revenues were EUR 1.7 billion, up 35%, driven by steady project execution. EBITDA was EUR 113.5 million, up 38.2%, thanks to higher revenues and improved operating leverage, resulting in an EBITDA margin of 6.6, up 10 basis points. At the bottom line, the positive operating performance, partly offset by financial and tax management, led to a consolidated net income of EUR 64 million, up 37.3%, and a margin of 3.8%. Let's summarize the financial results by business unit. STS revenues were EUR 96.1 million, up 25.3%, driven by low carbon and circular fuels, CO2 capture, and fertilizers.
EBITDA increased to EUR 22.9 million, up 17.5%, while the margin was driven by a product mix characterized by proprietary equipment sales. Going forward, we expect higher volumes in the coming quarters, reflecting the trajectory of our commercial pipeline and the demand for NextChem technology solutions. Integrated EPC revenues were EUR 1.6 billion, up 35.7%, thanks to the excellent execution of projects in the Middle East, including Hail and Ghasha, as well as the increasing contribution of projects acquired in Nigeria last year. EBITDA was EUR 90.5 million, up 44.6%, with a margin of 5.6%, up 30 basis points year-on-year and in line with the fourth quarter 2024. Moving on to the balance sheet, let's analyze the cash flow dynamics.
Our adjusted net cash position at the end of March was EUR 387.2 million, driven by healthy operating cash flow, which more than compensated the share buyback program for EUR 32.1 million, as well as CapEx of EUR 12.6 million. In particular, CapEx in the period was entirely organic and was mainly dedicated to the expansion of our technology portfolio to recurring R&D and digital innovation. This concludes the review of the financial results. I now hand over to Alessandro for his closing remarks.
Thank you. Thank you, Mariano. In conclusion, our first quarter results demonstrate a stronger-than-expected operating performance, in particular in the Middle East. Taking into account the planned evolution of the backlog, the newly acquired projects, as well as those expected to be acquired over the course of the year, a steady revenue growth and margin expansion is expected, especially in the second half for the business unit STS. Based on this, an upward revision of the group's 2025 expected performance may be considered. In light of the ongoing uncertainty and volatility in the international market, however, while confirming the current guidance, any revision of estimates will be communicated with the release of the first half financial results. This concludes our presentation. Mariano, Fabrizio, and I are now ready to answer any questions you may have. Operator, please go ahead.
Thank you very much, sir. Ladies and gentlemen, as a reminder, if you have any questions, please press star one on your double keypad and just make sure that your line is not muted to listen to your equipment. Our very first question today is coming from Kevin Roger of Kepler Cheuvreux . Please go ahead.
Yes, good evening. Thanks for the time and congrats for the Q1 performance. I have two questions, if I may. Alessandro, you just mentioned that you have probably the potential to upgrade the guidance, but that the current, in a way, uncertainty, macro environment, etc., are refrained you to do that. I was wondering if you can comment a bit if those uncertainties have already an impact on the discussion that you have for future projects in terms of invitation for bids, etc. If you did have seen an impact of the recent macro uncertainty, etc., on the discussion with the clients and the bidding process, etc., just to understand a bit how it played. The second question is related to working capital. If you can give us a bit of sense on the working capital movement in Q1 and what you expect for the upcoming quarters, please.
Thank you, Kevin. Thank you for your question. If I well remember, your question relates predominantly to our guidance, why we have not revised immediately our guidance for 2025. I do not want to emphasize too much what we have mentioned in terms of uncertainty, in terms of risk, which could be derived from the international geopolitical situation, which, by the way, have not affected our performance, our operation. Presently, based on our knowledge, we do not expect that they will affect our operation even moving forward. Before communicating a revision of the guidance, which has been provided one month and a half ago, it is much better, and to me, even more serious, to wait at least still a few weeks.
By the way, we have initiated the structured process to revise our budget for 2025, and I'll be more confident as soon as this exercise will be completed. However, to me, it is at the same time serious to anticipate that there are all the fundamentals which most likely will lead to a revision, to an upside of the guidance that we have communicated just a few weeks ago, because we have already in our hands these elements, and primarily is the performance of the first quarter.
Honestly, we didn't expect to be able to deliver a so high level of performance in terms of production in the first quarter, considering that a significant portion of our operations are located in a country which, you know, in the first quarter, in particular during the month of March, could have been affected by an event of the Ramadan, the Islamic religion, which didn't happen. Since most of the projects that we have presently under execution have moved into the execution phase and the construction in particular, most of the people which are involved in the construction are not from, you know, are not Islamic people. We have been able to maintain the same level of efficiency and performance which we have delivered in the last quarter of 2024.
For the end, I don't know if you had the possibility to already appreciate, but the results of the first quarter are more or less in line with what we have delivered last year. This, as far as what we have delivered, what has been already accumulated in the first quarter, with reference to the future, with reference to the bidding processes, to the opportunities that we are trying to pursue as part of our EUR 60 billion of commercial pipeline, presently, we are not appreciating any major variance compared to the situation existing a few months ago. Nor the tariffs, nor the geopolitical situation, nor the fluctuation in the pricing of the natural resources are affecting, in particular, the project to which we are paying our attention.
For sure, we know that many energy companies are revising their expectations in terms of CapEx as far as the upstream projects are concerned, but we are not interested in those types of projects. Whilst low prices of the natural resources are the perfect condition to sustain investments in the downstream, because for sure, the transformation of natural resources into the traditional commodities, which, thanks to the high level of the market demand, are maintaining very high prices, these sustain investments in the downstream, which is the segments in which we are interested, in particular the technological downstream investments.
Thanks to our structure, to our organizational structure, based on which we are able primarily to deliver the technological solution, and then we have at the same time the possibility to transform the idea, the technological solution into an industrial infrastructure, this is the perfect condition to sustain our positive expectation for additional awards moving forward. No negligible effects or zero effect generated by the tariffs from the U.S. Geopolitical events are not affecting our business, and more than that, the area, the geographical areas we are targeting with the relevant project, we are not appreciating any deviation compared to what we have already experienced in the last few months. Excuse me, you're right. There is another issue relating to the movement in the working capital.
In what we have been able to deliver in the first quarter of the year has been just the continuation of the positive trend that we have already experienced in the last part of 2024. For sure, moving forward in the next few quarters, there could be some fluctuation because, for example, in the second quarter, there is a cash out which does not affect the working capital, but of course, will affect the net financial position because we have paid a significant amount in terms of dividend. We have even invested additional money in the share buyback, which, of course, are events which are due to happen once a year. It cannot be replicated, of course, in the subsequent quarter.
At the same time, we are expecting in the second quarter to materialize the first benefits associated with the acquisitions that we have been awarded in the first quarter, which, by the way, in the first quarter, those projects, the EUR 3.5 billion project awards, have not materialized any cash flow. Effective from the second quarter of the year and even more in the subsequent quarters, the contribution, the positive contribution, the positive cash flow secured by the new awards will materialize. This will impact on one side the net financial position, but on the other side, they will re-stabilize the working capital at the level that we are aiming and we have enjoyed over the last few quarters.
A lot of significant movements will depend on the advance payment that we are expecting to receive from the new orders, but at the same time, we are convinced that we have already the elements in our hands to maintain the positive operating cash flow that we have already enjoyed in the first quarter of the year.
Okay. Perfect. Thanks a lot, Fabrizio. Have a nice evening.
Thanks, sir. And now to Massimo Bonisoli of Equita. Please go ahead.
Good afternoon, Alessandro and Mariano. Congrats for your performance in Q1. Two questions. One back on the guidance. I don't want to spoil your new outlook, but would it be reasonable to analyze the first quarter ENC results to get a proxy for the new upgraded guidance? Is the first quarter execution rate for ENC sustainable for the coming quarters? The second question on the project in Kazakhstan. Following the recent news on the petrochemical and gas project there, could you shed some light on the actual project in the pipeline and the timing of the final investment decision process? Thank you.
Massimo, thank you. Thank you for your very interesting question, both the first one as well as the second. Of course, I repeat, it is not because I do not want to provide specific, precise information about what we expect to achieve in 2025, but I would say we have already in our hands important elements which provide the confidence that our target in terms of volumes and earnings associated could be revised up already today. If you ask me how much it will be, I can, of course, disclose that it will be higher than our guidance, but how much it is early, early to define a precise value.
Please be patient, be confident that we will revise for sure with an upside, but of how much we will communicate the precise indication as soon as we will release the half-year results, because I do not want to influence inappropriately the market. We can say that we have all the elements already in our hands, but the precise indication will be provided only in a couple of months' time. Which was the second one? About Kazakhstan. First of all, we never disclosed that we are talking about Kazakhstan. We are talking about the Caspian region because there are also elements of confidentiality that we have to maintain until when certain formal steps will not be satisfied.
For sure, it is useless to say that in that part of the world, the country which has already approved significant investment in downstream is Kazakhstan, but please do not create to me a political incident. However, of course, we expect to be in a position to clarify and to provide the traditional elements, the traditional details that we are used to provide as soon as the project is awarded over the next few days, as a maximum a couple of weeks. Please be confident that what we have already communicated is based on the letter of award that we have already received, but with the constraint not to communicate many details until when the formal contract will not be signed. You have to satisfy yourself with the information that we have provided so far, but very soon we will be more clear.
We will provide all the colors that we are used to provide in such events.
Thank you anyway, Alessandro. I tried.
Thank you very much, sir. We will now go to Marco Cristofori of Intesa Sanpaolo . Please go ahead, sir. Your line is open.
Good afternoon, everyone, and congratulations for the result. Two small questions on my side. The first one, the weakening of the U.S. dollar recently, just to understand if it is penalizing you in any way in your bidding phase with the new project. The second question, given the good performance and cash generation, could you also consider a new buyback program in the future? Thank you.
Let me start with the second one, and then I'll hand over to Mariano for the information relating to the potential consequences of a weaker U.S. dollar compared to euro. We have declared the reason why, the reason behind our share buyback, which was predominantly associated to satisfy an incentive plan for our people, the people of our organization. If I remember, we have just communicated yesterday or today to have completed the share buyback program. Presently, what we have been authorized by the shareholders' meeting has been entirely completed. We do not expect to proceed with an additional share buyback in the months ahead.
Considering the exchange of dollars and euros, if we consider the bidding phase, we have all the evidence to make our offers in line with the updated situation.
If we consider the forex exchange for the project we are executing, we have a strict hedging policy put in place, and so the impacts are not relevant. You may obviously have translation effects from companies located abroad and reporting in different currencies from the euro. For the ongoing project and considering the actual of March, we do not have any great impact from the exchange differences.
Most of our operations are realized directly with the company based in Italy or through branches. Branches, of course, the functional currency is the currency of the headquarter. Considering that, for sure, as correctly mentioned by Mariano, we could have a translation effect associated deriving from the conversion of the financial statements of those subsidiaries located abroad and which have a different currency as a primary currency for their accounts.
We expect that the consequences of the translation, they will not affect the P&L, eventually will affect our equity, but with a very negligible size. Presently, considering the strategy that we are used to put in place as soon as a project is awarded and even starting from the bidding phase, we do not expect to record any major consequence as a consequence of a weaker U.S. dollar.
Thank you. Very clear.
Thank you, sir. The next question will be from Emanuele Negri of Mediobanca. Please go ahead.
Yeah, good afternoon, everybody, and thanks for the presentation and for taking my question. I have a couple of questions. The first one is on the profitability profile of the new orders that have been awarded since the beginning of the year. Is this intake overall improving the profitability profile of your order backlog, or are these projects overall in line in terms of the margin with your historical leverage? The second one is on the M&A campaign. We saw that in the first quarter, CapEx were overall only organic. Are you scouting some new technologies to be acquired?
Let me start with the first one, and then as far as the M&A, potential M&A transactions regarding primarily NextChem, I'll hand the floor to Fabio. The projects which have been awarded in the first part of the year are mostly of them EPC projects. For all of them, we have been able to have recognized the traditional margins that we are used to generate with EPC projects, with a condition. We are able, with our organization, with the efficiencies of our organization, to manage a higher level of operations without increasing our structure. It means that the efficiency of our organization will not require to have an additional burden in terms of G&A. The first element which will back up the increase in marginality is due to this element.
Moving forward, as we have already anticipated, we expect that in particular, our technological business, which is run by NextChem, will run with a different speed compared to what has been delivered in the first quarter. And since, as you know, the margin delivered by NextChem ranges well in excess of 20%, we expect that the incidence of the NextChem business compared to what has been delivered in the first quarter will be higher than the first quarter. So a higher level of efficiency of our organization and the higher level of marginality which will be generated by the STS business, this provided the confidence to be able to deliver all in all a higher level of EBITDA in the quarter ahead.
Let me take on the M&A. You remember the last time we met, we had pointed out a couple of opportunities we were looking at, we are still looking at. It is fair to say that M&A is part of the growth strategy of NextChem. It is also fair to say that the technology portfolio that is already in the hands of NextChem and the further developments of technology which are taken care of internally is wide enough to guarantee the growth of NextChem going forward. We will keep on looking at a number of opportunities. This is a market which is probably quite fertile in terms of opportunities in this particular moment. We will keep on looking at opportunities. Again, we do feel comfortable that the growth path of NextChem can in any case be properly fed with the technology portfolio already in our hands.
Thank you very much. Very clear. Thank you.
Thank you. The next question will be coming from Francesco Sala of Banca Akros. Please go ahead. The line is open, sir.
Yes. Good evening. Thank you for taking my questions and congratulations for your results. Just a couple of questions. The first one is I wonder whether you are seeing any disruption in your supply chains or any difficulties ahead in terms of procurement because of sanctions and tariffs. The second one, there is quite a big change in the geographical composition of your commercial pipeline in Q1 compared to the end of last year. I mean, besides the merger of the two regions, the Caspian area and the European one, I wonder why the, let's say, the European region, I guess, is so much smaller in Q1 compared to Q4 in terms of commercial pipeline. Thank you.
The first one, Francesco, the first one relates to the supply chain. As we have highlighted in our presentation, more and more we are requested to leverage on the local economy when a project is awarded. The so-called in-country value, in kingdom value-added or similar terms, depending on the country concerned, are constraints which we have to cope with. We have been obliged to cope with until now, and the requests of the various clients are becoming even more stringent moving forward. First of all, you have to refer to the supply chain, suppliers, service providers which are located in the country where the projects are executed. Limited to specific and particular components, but all in all, we are talking a negligible value.
For this reason, we have already clarified that the tariff system is not going to affect our projects, our business, nor today, nor moving forward, unless, of course, there will be a great modification in the present situation. As far as the situation that you have appreciated with respect to the changes that we have declared in our commercial pipeline compared to December, we have to say that Europe is becoming more and more an area whereby it is really difficult to operate in terms of EPC contracting in particular because it is almost impossible to find out qualitative partners which are able to satisfy the construction requirements. Progressively, we have decided to limit our exposure to the European market only to the engineering and procurement contract, unless there are very particular situations.
For example, I am referring to the project that most likely very soon will initiate in Italy, in Sann azzaro, whereby under the coordination of NextChem, then Tecnimont will take care of the realization of the circular methanol factory based on our proprietary technology. Of course, in this case, we will take care also of the construction. In any other European situation, which was until a few months ago in our commercial pipeline in terms of EPC, for the time being, we have decided to limit, as I was saying, our exposure just to the project whereby we can provide to the client just engineering, procurement, or, of course, and not or, and the services which are normally provided by NextChem, which we are talking about licenses for our technology, proprietary equipment, and the package for the process engineering.
In this case, we are willing to provide our support to our clients based in Europe. Moving forward, and until when there will not be the conditions which will make it possible to return to provide also the construction, we have decided not to continue with this type of contract. At the same time, the Caspian region has become more and more important, not only because of the contract which has been already awarded, but because most of the countries which are located in that part of the world, I am talking about Kazakhstan, Turkmenistan, Kyrgyzstan, Tajikistan. The STAN countries, all of them have engaged a process of significant investment in downstream.
Of course, if there are downstream projects, of course, Maire must be there, either primarily with the technological solutions and then, if the client wills, of course, also with our capability to realize the infrastructure. For sure, in terms of opportunities, already in the first quarter of the year and even more moving forward, the size of the opportunities coming from that part of the world are due to become even more important compared to the situation that we are experiencing today.
Thank you.
Thank you. What's your question, Mr. Sala? As we have no further questions, I turn the conference back over to Mr. Alessandro Bernini for any additional or closing remarks. Thank you.
I have just to thank all of you for having participated in our conference call. Hello to you, and we will meet on the half-year account where you will have positive surprises.
Thank you very much, sir. Ladies and gentlemen, that will conclude today's presentation. Thank you for sharing your attendance. You may now disconnect. We wish you a good day and goodbye.