Earnings Call: Q3 2025

Oct 23, 2025

Good day and welcome to Maire 9 Month 2025 Results Conference call. My name is Sergey, and I'll be your coordinator for today's event. Throughout today's recorded presentation, all participants will be in a listen-only mode. Later, we will conduct a question and answer session. You may register for questions at any time by pressing *1 on your telephone keypad. Now, I'd like to hand the call over to Silvia Guidi, Head of Investor Relations. Please go ahead, ma'am. Good afternoon, everybody, and thank you for joining our call on Maire's 9 Month 2025 Financial Results. My name is Silvia Guidi, and I'm the Head of Investor Relations. I'm joined by today's speakers: Alessandro Bernini, CEO; Mariano Avanzi, CFO; and Fabio Fritelli, NextGen Managing Director. They will walk you through the operating highlights of our business units for the first nine months. This will be followed by an overview of our financial results. 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. Thank you, Silvia, and good afternoon, everyone. The nine months of financial performance confirms our solid fundamentals. Over this period, we achieved a remarkable growth in both revenues and profitability, supported by an excellent project execution, operating leverage, and high value-added services. All in all, revenues increased by around 27% year-on-year, while the EBITDA margin reached 6.8%, also thanks to the increased contribution of the Sustainable Technology Solutions business unit. At the same time, our financial discipline and strong cash generation enabled us to close the nine-month period with €342 million of adjusted net cash. Moving to the operational side, we secured €5.8 billion of new awards in the first nine months, more than replacing the revenues generated in the period. The geographical spread of our €13.9 billion backlog clearly reflects the success of our diversification strategy in both business units, as will be detailed in the following sections. Projects in EMC are well distributed across the Middle East, North Africa, and Central Asia, while NextGen footprint is spread to an even wider extent. The delivery of our backlog is supported by our best-in-class organization, which we have further strengthened in the past nine months, reaching 10,500 people and adding many new engineers. Our strategy allows us to anticipate future project needs, secure critical skills, and leverage digital tools, also thanks to continuous training to maximize efficiency and foster a culture of safety, inclusion, and innovation. On 20 September, we celebrated our people during Maire's first-ever Global Open Day, opening the doors of 23 offices across four continents to employees and their families. More than 6,000 people attended, strengthening our sense of community and deepening connection with local ties. Let me now leave the floor to Fabio for a detailed look at NextGen's operational performance. Thank you, Sandro, and good afternoon, everyone. Sustainable Technology Solutions business unit continues to successfully navigate the current complex business environment, thanks to its wide and diversified portfolio of innovative technologies. Over the nine-month period, we secured approximately €325 million in new awards, bringing the STS backlog to around €388 million. This result has been driven by our comprehensive technology proposition, mainly in the low-carbon energy vector business line. The awards cover a wide array of solutions, from technology licensing and high value-added services to proprietary equipment supporting projects in fertilizers, hydrogen production, low-carbon fuels, and waste-to-chemicals worldwide. Looking forward, we remain optimistic about the STS outlook, supported by a demand driven by a more pragmatic approach to decarbonization solutions tailored to local needs. While in the past months, the decision-making process of most of the clients has been affected by significant macro and geopolitical uncertainties, we are now seeing concrete signs of recovery, which suggest a gradual increase in final investment decisions going forward. These opportunities are particularly concentrated on blue molecules and sustainable fuels, where our broad offering and strong process design capabilities position us as a leading player. The practical demonstration of the growing momentum in sustainable fuels is represented by the recent awards we secured in Northern Europe, all based on our NX Circular technology. In September, NextGen was selected by Altauto to conduct an engineering study for a SAF plant in the UK. The facility will convert municipal and industrial waste into SAF, able to power over 500 flights from London to New York per year, supporting the UK SAF mandate. Furthermore, NextGen has been recently awarded by Equinor and Manaf a feasibility study for a large-scale waste-to-methanol plant at Norway's Mongstad refinery. These initiatives are clear examples of the market potential for clean fuel solutions in aviation and maritime, two segments where regulatory efforts are strongly supporting demand. Moving to our technology development, I'd like to highlight the cooperation agreement with Siemens Energy to commercialize high-temperature methanol fuel cells. NextGen will focus on the design and supply of the fuel cell module, targeting maritime application for net-zero yachting. This will represent the first commercial scale installation and pave the way for additional ones across multiple applications in the mobility and power segments. A further step in the expansion of our technology offering is represented by yesterday's announcement of NextN, our subsidiary dedicated to creating new intellectual property and providing highly qualified technical services in the field of new-generation nuclear plants. NextN has secured a €70 million engineering services contract to develop the basic design of the conventional island and balance-of-plant of the first-of-a-kind nuclear plant based on nucleus reactor. Leveraging on modularization expertise and Tecnimont's capabilities, we aim to optimize costs and timelines for this kind of plants. Together, we embrace innovation and circularity, accelerating safe nuclear energy and sustainable solutions for the future. These are just two examples of our continuous efforts to further expand our technology portfolio, both through internal development, with several initiatives currently underway, and through M&A activity, where we are actively pursuing new opportunities. Now, we'll hand it back to Sandro for a detailed look at the operational performance of the integrated EMC Solutions business unit. Thank you, Fabio. Let me say that our tireless commercial efforts led to an increase in the order intake this year to €5.5 billion, expanding our presence to other strategic regions, underscoring the effectiveness of our diversification strategy. This new contract will span key geographies such as Kazakhstan, Sub-Saharan Africa, Europe, and Malaysia, and cover gas processing, petrochemicals, hydrogen production, and energy infrastructure upgrades. Our €13.5 billion backlog continues to provide a solid foundation to navigate the current business environment and allows our group to pursue other commercial opportunities in a highly selective way. Now, let me give you an update on the progress of Highland Gas Shell. I'm pleased to confirm that the execution at Highland Gas Shell is progressing well, with some activities ahead of schedule. As of today, overall progress stands at approximately 45%, with all major milestones being met. We have surpassed 30 million safe man hours, a testament to our strong focus on safety and disciplined project execution. Engineering is advancing faster, and procurement is almost complete. Construction activities are also progressing extremely well. To give you a real sense of scale, we have poured 274,000 cubic meters of concrete, that is like filling 110 Olympic swimming pools, and installed 14,000 metric tons of steel, the weight of two Eiffel Towers. This is real work, heavy duty, no shortcuts. These are not just numbers; they show the sheer magnitude of what we have delivered. Looking at our journey in Kazakhstan, we are proud to highlight the early milestones we have achieved so far. This year, we started critical projects such as the Sileno Petrochemical Complex and the Tengiz Gas Separation Plant, aimed at boosting the country's industrial capacity. Furthermore, through strategic partnerships, including agreements with a leading local university and the Samru Kazina, the sovereign fund, we are exploring new initiatives in advanced energy infrastructure and decarbonization solutions. Our commitment to local content has been announced through initiatives like the ALTIRAU Local Value Shared Growth Forum, with 700 participants from 500 different local companies. The forum focused on the increasing importance of local content and how a responsible supply chain can bring additional value to the local projects. This concludes the review of our operational result, and let me now hand over to Mariano for the financial performance. Thank you, Sandro. Our nine-month income statement continues to reflect steady growth in revenues and profitability. Revenues reached €5.2 billion, up 26.7% year-on-year, driven by solid project execution. EBITDA was €358.1 million, up 33.2%, supported by higher revenues and improved operating leverage. This resulted in an EBITDA margin of 6.8%, an increase of 30 basis points, also thanks to the contribution from higher value-added services generated by NextGen. At the bottom line, strong operating performance combined with effective financial and tax management delivered a consolidated net income of €204.8 million, up 41.8%, with a margin of 3.9%, up 40 basis points. Let's now analyze our financial results by business unit. Sustainable Technology Solutions continues to deliver good results with revenues of €309.4 million, up 22.9%, an increase driven by low-carbon and circular fuels, CO2 capture, and fertilizer solutions. EBITDA rose to €80.3 million, up 31.2%, with a margin of 26%, up only 200 basis points, reflecting a product mix characterized by higher contribution from licensing and high value-added services. Integrated Engineering and Procurement Contracts revenues were €4.9 billion, up 26.9%, reflecting our execution excellence. Growth was driven by project progress in the Middle East and North Africa, while projects in Central Asia are gaining traction. EBITDA was €277.8 million, up 33.8%, with a margin of 5.6%, up 30 basis points. Let's now analyze the cash flow dynamics at the daily. Our adjusted net cash position at the end of September improved to €342.5 million, driven by healthy operating cash flow generation of €306.5 million. Net cash CapEx of €51.4 million was directed toward sustaining the internal development and scale-up of proprietary technology, accelerating digital innovation, and advancing our Green Innovation District in Rome, which is set to become the growth focal point for research and development. Moving to our financial structure, today, the Board of Directors approved the issuance of a new Sustainability Linked Bond aimed at refinancing existing indebtedness under more favorable conditions. In particular, we are targeting the early redemption of the €200 million bond due in 2028. Its 6.5% coupon reflects the financial market condition at the time of issuance. This move is intended to extend the average duration of our medium to long-term debt by nearly two years and lower its cost, further enhancing our financial efficiency. In line with our growing commitment to sustainable finance, we also issued a new Sustainability Linked Financing Framework with ambitious decarbonization targets covering both Scope 1 and 2 direct emissions and the engagement of our suppliers for Scope 3 indirect emissions. That concludes our financial review. I will now hand over to Alessandro for his closing remarks. Thank you. Thank you, Mariano. Looking ahead, our commercial pipeline remains extremely strong at €64.4 billion, as the downstream segment remains pivotal in driving diversification and decarbonization across clients' CapEx plans. In the near term, we expect several projects which have been tendered by our group to be sanctioned by the relevant clients located predominantly in the Middle East, North Africa, Sub-Saharan Africa, and Europe. These include gas processing and petrochemical initiatives, of which a few are multibillion opportunities. Considering the ongoing negotiations, we remain confident that with the additional awards expected by the end of the year, the total order intake could exceed our €8 billion target. Looking forward to 2026, we expect our EMC tendering activities to be highly focused on gas processing and gas monetization activities, capitalizing on the accelerating global energy demand. At the same time, the structural shift toward cleaner fuels and chemicals, also driven by regulation, will support increasing opportunities for STS, which can leverage its broad technology offering, especially in blue molecules, sustainable fuels, and fertilizers. In conclusion, our nine-month financial results represent a strong foundation and demonstrate clear progress toward our year-end targets. In particular, in the fourth quarter, the EMC business unit is expected to generate volumes in line with the past quarters of 2025, entirely driven by the scheduled activities of the existing projects. At the same time, the STS business unit is expected to accelerate further, supported by the representative awards as well as by projects which are likely to be acquired before year-end, also benefiting from the integrated offering with the EMC business unit. As a result, we are steering towards full-year group revenues in the upper end of the guidance range, thanks to the disciplined project execution as well as the expected increasing contribution of higher value-added engineering services and technology solutions of NextGen in the fourth quarter. Profitability is also expected in the upper end of the guidance range. CapEx will continue to prioritize the expansion of our technology portfolio, including selective bolt-on acquisitions. In particular, we are currently actively pursuing a few M&A opportunities in Europe, for which we are confident that we will reach a signing before the end of the year. Meanwhile, operating cash generation is anticipated to support a net cash position aligned with the projected year-end 2024 levels. This all in all concludes our presentation. We are now ready to take your questions, so operators, please go ahead. Thank you. Ladies and gentlemen, as a reminder, to ask a question over the phone, please signal by pressing *1. If you wish to cancel your request, please press *2. Please make sure your line is unmuted on your end to allow your signal to reach our equipment. Again, please press *1 to ask a question. Our first question is from Isako Brambilla from Mediobanca. Please go ahead. Hi. Good afternoon, everybody. A couple of questions on my side. The first one is on the commercial opportunities pipeline. If I compare the slide of July presentation with today, I see probably the Middle East as the area in which you see additional opportunities, roughly €3 billion, if I'm not mistaken. If you can elaborate a bit more on that, the angle in which you see larger opportunities there for what you are allowed to say, of course. The second question is on the margin outlook for next year. Of course, you are not giving guidance yet, but if we look at the integrated EMC business, how should we think about building blocks supporting margin expansion next year? Should we again in a year in which project mix helps you or more a theme of operating leverage? Thank you very much. Thank you for your questions. Starting answering to your question about the commercial pipeline and opportunities that we are pursuing all over the world, as you have correctly pointed out, a significant portion of our commercial efforts are concentrated in the Middle East, as well as in North Africa. The Middle East, from a value standpoint, for sure, is the region which could deserve the most significant opportunities moving forward. When I say Middle East, I am predominantly referring to Abu Dhabi and Qatar, since we have, of course, also other opportunities that we are working on in Saudi Arabia. Saudi Arabia has modified significantly its investment appetite and has rerouted a significant portion of their investment plan in other parts of the world, in a region whereby I do not expect to be able to participate. I'm referring to Far East. Talking for a while about what we have in front of us from Abu Dhabi, in particular, and Qatar, both of them relate to projects in the gas monetization. We have already submitted our technical proposal. We have also submitted our commercial proposition. Now we are dialoguing with the client, a potential client, in order to find out to try to close as soon as possible the negotiations with them. Useless to say that most of our commercial opportunities, not only in the Middle East but also in other regions of the world, are predominantly concentrated with counterparts which are national or private entities. Both entities, before sanctioning definitively the projects, on top of spending a lot of time in identifying the most appropriate technical solution, are also interested to have secured the most appropriate and the most efficient financial package, for which sometimes they require our cooperation in finalizing it. This is just to mention that this process is normally much longer than the simple process whereby the client, after having identified the most appropriate proposition, then simply decides and signs the contract. In this case, which prevails in the present market environment, most of the commercial opportunities we are working on imply also the discussion about the typology of the financial package. However, putting everything together, considering where we are now, I am confident that some of them could be finalized within the end of the year or, as a maximum, in the first week of 2026. The size of those opportunities is able to satisfy, if achieved, of course, but we are confident, and the size will make it possible to achieve the target that we have defined for the entire 2025 target, which means something in excess of €8 billion equivalent. This is as far as the commercial opportunities are concerned. The second question relates to next year. As you have already anticipated, it is a little bit early to talk about 2026. At the same time, I recognize that what you have mentioned, which is we have already on board a significant backlog which backs up most of the operational activities which we expect to deliver next year. This, in particular, as far as EMC business is concerned, because you know better than anybody else that as far as NextGen, it means the technological business, the industrial cycle is much shorter. For sure, even if we expect to close the year-end with a backlog a little bit higher compared to what we have on board right now, however, it will not be enough to satisfy what we expect to deliver next year. Just to say that in 2026, all in all, we have already anticipated something with our strategic plan, a 10-year strategic plan, whereby we have already communicated to be able to deliver a compound average growth rate in the region of 5%, 6% year-on-year for at least the next five-year plan. Just to mention that we expect an additional step of growth in 2026, both in terms of volumes as well as in terms of profitability. The size we expect to be able to remain in line with what we have anticipated with our pluriannual strategic plan. Okay, thanks for the answers. Thank you. We will now move to our next question from Jamie Franklin from Jefferies. Please go ahead. Hi there. Thank you for taking my questions. I wanted to focus firstly on NextGen. Obviously, very, very strong quarterly EBITDA margin at 27.6%, so it's already exceeding the 2029 targets of 22% to 27%. Can you give us a bit more color on what specifically drove that high level of margin in the third quarter and whether it's possible that we could see a repeat of that in the fourth quarter? The second part of my question is NextGen revenues. Your guidance implies quite a material step up in 4Q. To what extent is that covered by what is in the backlog today? Could you clarify whether it assumes any contribution from the potential acquisitions that you expect to reach agreement on by the end of the year? Thank you. Thank you. Thank you for the questions, first of all. I will probably have to answer the first and the second one together because one is the other side of the second one is the other side of the first one. We have always said and we've always indicated a range which is in between 22% to 25%. Clearly, this has to be seen on a yearly basis or on a longer-term basis. What has happened this quarter, and this is the reason why we have had a relatively higher profitability number, is that the mix of products which have been making the revenues for this quarter are more shifted towards higher value-added services like engineering hours and licensing. You know that our mix when defining the profitability of NextGen is the combination of products which can range from the very high double-digit profitability of a license to a mid-double-digit profitability of engineering services to a lower profitability when you get to proprietary equipment, which is higher in volume but lower in margins. The answer to your first question, do we see this profitability level being confirmed in the fourth quarter? The problem that the answer is probably not. We will go back to the range we have indicated. The reason is exactly the point of your second question, how are you going to fill the gap from now onward? With the backlog in our hands and the recent acquisitions, some of which are already announced, we will have a higher percentage of proprietary equipment in the last part of the year, which should lower the profitability to make it fall within the range we have indicated. Higher volumes than we have had in the last quarter, lower profitability. Again, you know the peaks have to be looked on a slightly longer time frame. The single quarter can be misguiding. There was a third question on M&A or on acquisitions. No, the fourth quarter of the year is not based on the contribution of acquisitions. It would be silly to say so. We are already at the end of October, so the contribution to revenues in any case would be null or negligible. Definitely, we are concretely looking at some concrete opportunities in the pipeline with interesting targets of several targets, let me say so, which may materialize by the end of the year and contribute as a consequence to next year's revenues and profitability. Okay. Very clear. Thank you very much. Thank you. We will now move to our next question from Massimo Bonisoli from Egita. Please go ahead. Good afternoon, and thank you for taking my two questions. The first on the implied divisional EMC outlook. Regarding the outlook, based on my calculation, the EMC division would already exceed the full-year revenue guidance with an average quarter in Q4. Are there any constraining factors in Q4 that we must consider, or does the outlook include some contingencies? The second question is on the CapEx phasing for Q4. You confirmed the guidance for $130 to $150 million range of CapEx for 2025, despite only $50 million spent in the first nine months. Can you shed some light on the CapEx phasing for Q4? Thank you. Possible. Thank you for your question. I'll start to answer to your first one, which means what we have to expect in the fourth quarter. I truly believe that we have already clear answer to your question with our guidance by saying that based on our present knowledge and considering that what we are doing so far is totally referred to the backlog that we have on board, there are no major uncertainties which could affect the performance of the fourth quarter. Of course, based on what could be predictable, excluding what presently is unpredictable. Based on this statement, we expect, as far as EMC business is concerned, to deliver more or less the same size of production that we have experienced in the third quarter. Eventually, we will do our best, of course, to do something else. Presently, we are satisfied based also on the planning agreed with the various clients for the various projects to deliver the same level of production that we have already delivered in the period of July and September. This will lead to total volumes for the year for the group, taking also in consideration the scale-up of the revenues that we expected to deliver with the NextGen, with the STS, something in the region of €7 billion, which is the upper side of the guidance that we have communicated in July. This is what we expect to deliver in the fourth quarter. As far as investments, as you have correctly stated, from one side, we have confirmed our guidance for a total spending in a range between €130 to €150 million, while the situation actually by the end of September stays at something more than €50 million. For sure, a significant shortfall compared to our guidance. Why we have confirmed our guidance, I believe that it has been already anticipated by Fabio. We have some dossiers in particular regarding, so we are talking about M&A transactions, which we are working hardly on them. For some of them, we expect to be able to at least achieve the signing of those transactions within the end of the year. The closing will follow in a quarter after having satisfied the traditional encumbrances which we have to satisfy for such kind of transaction. You know better than anybody else that the most critical phase of this process is to achieve the signing. Considering the present level of those processes, of some of them, because we have not just one, we have some processes already ongoing. A couple of them are in an advanced stage of negotiations, have already implied the submission of a non-binding offer. Just to mention, to provide an idea, a color about how it has progressed those processes. For this reason, we have been confident to reconfirm the guidance because we expect to be able to achieve, to conclude some of them within the end of the year. Accordingly, the total magnitude of the spending for 2025 will be in the range of the guidance that we have provided. Very helpful. Thank you very much. Thank you. As a reminder, to ask a question, please signal by pressing *1. My next question is from Marco Cristofori from Intesa Sanpaolo. Please go ahead. Good afternoon and congratulations for the result. Two questions, if I may. You awarded an important order in Kazakhstan. Just to understand if the average profitability of these orders is similar to the orders already in the backlog or if there is some upside on this. My second question, I noticed that during the third quarter, there was a sharp increase of service cost with a reduction of raw material. Just to understand if whatever reason behind this movement. Thank you. I'm trying to satisfy your question, Marco. First, talking about Kazakhstan. Of course, we are talking about two projects, two very important projects, as well as a complicated project because when talking about petrochemical projects, we are talking about process. Process and the process means complication, means technology. Everything, even in a country which is quite new for us, for our organization, because we have been there since a long time. From an operational standpoint, these are the first two projects we are working on. For this reason, of course, useless to say that we are concentrated in executing the project in the most efficient way. If there will be any improvement in the marginality, of course, we'll be gathered just at the end of the project, considering the element which I mentioned before. New country, new region, new partner, of course, a well-known type of project. All in all, the margin that we expect to generate is aligned with the traditional margin we generate on the EPC project, on the other EPC project. If there will be any type of improvement that we will be able to enjoy, this will be, of course, released only at the end of the project. The subsequent one relates to the different mix between service cost and material. This depends a lot on the status of the various projects which are under execution. For sure, in the third quarter, we have paid a lot of efforts in taking benefits and advantages of the season in order to enhance the construction activities, whilst the procurement of clothing items, as well as all the other materials which are necessary for the project execution, have been concentrated in the first part of the year. I expect that moving forward, for example, in coherence with the progress of ILN Gasia, which is moving into a more operational phase because the construction now is just at the 25%. Moving forward, the construction is the phase which will prevail. Most of the costs will be represented in the service cost because, of course, we are leveraging on the partnership with the local subcontractors. It's just something which is connected with the phases of the various projects which are under execution, Marco. Thank you. Thank you, Sandro. Very clear. Thank you. Our next question is from Mick Peacock from Barclays. Please go ahead. Good evening, everybody. Just a quick question on NextGen, if I may. Obviously, if I look around, it looks like some of the net-zero ambitions seem to be slowing or moving further out in time. I'm just wondering if you're seeing particular winners in technologies versus a broader spectrum that were being addressed a few years ago. You see a lot on SAF, a lot on waste-to. Is carbon capture slowing down? Is green slowing versus blue? What are the dynamics within that NextGen on the transition side? Let me take this tough question, Mick, because you know there's been a year where things have been unpredictable, has been 2025. Not to mention the IMO outcome in London last week. Let me say that definitely, there's no longer a coherent global approach to energy transition, no doubt. There's no longer the key vectors. The key vectors to the energy transition are broadening if compared to what we were expecting in 2022 and 2023. Everybody was talking about hybrid. What we are seeing right now is that the energy transition is becoming more and more localized. There are a lot of geographies which are taking steps towards the energy transition with the most convenient or available feedstock in their own geographies. Methanol. Methanol in these days is something we are seeing in certain geographies which are well positioned to serve those markets who are still demanding for methanol. The markets who are still demanding for methanol are definitely Korea, Japan. We see developments of projects who can serve those geographies. We see ammonia, also green ammonia, in markets where we have proximity with the end users and you can undercut transportation costs. I'm referring to India. I'm referring to certain initiatives in Sub-Saharan Africa. We see sustainable aviation fuel, although at small doses in all those countries which have relevant access to agricultural or animal waste. I would say that in the broad spectrum of technologies we can offer to our clients, coupled with the global presence of Maire Group, is helping us intercepting way more opportunities than pure plays having just one technology and focused on one market candidate. This is, if I may, also represented by our numbers. We keep on growing. We would like to see a more stable environment, no doubt. We would hope for a better 2026 in terms of overall market dynamics. Now we stand in debt. We have been able to grow. If I may, I think the worst part of the year is over. If I look at some of the recent acquisitions plus the feedback we receive from certain clients, we see a push towards finalizing some investment decisions that we haven't seen in the first part of the year. We are quite positive at this point in time of the year. I don't know if I've answered your question. I tried to, but that's a very long answer to a very complex question. Okay. No, thank you. Thank you. It appears this was our last question today. With this, I'd like to hand the call back over to Alessandro Bernini for any additional or closing remarks. Over to you, sir. Hi. This is Silvia again. Thank you very much to everyone for participating in this call. For any follow-up, please feel free to reach out to the investor relations team. Our next appointment will be on the occasion of our 2026 Capital Markets Day at the beginning of March next year. The exact date will be announced in due course. Thank you again and have a good evening. Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.