Good afternoon. This is the Chorus Call conference operator. Welcome, thank you for joining the RAI 2022 full year results analyst conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Giancarlo Benucci, Chief Corporate Development Officer of Rai Way. Please go ahead.
Thank you, operator. Good afternoon. Let me start thanking all of you for joining us today and welcome to our 2022 full year results presentation. As usual, the CEO will start with the highlights and figures of the period. The CFO will then illustrate the financial details. At the end, we will welcome your question in the usual Q&A session. Let me now hand the call over to Mr. Mancino. Please, Aldo, go ahead.
Thanks, Giancarlo. Good afternoon to you all. 2022 represented a challenging year, but it brought considerably satisfying results. Just when, due to external factors, our second-largest cost item increased by more than 70% with a headwind of more than EUR 8.5 million, not only did we manage to remain on the development trajectory, but we recorded the highest growth in our operating margin since the IPO to date and achieved the industrial plan target in terms of net income 1 year in advance. All this without considering that the majority of the protection provided by our business model against the 2022 headwinds, namely the link to inflation, will have more effect during 2023. Going in order.
From an economic perspective, the adjusted EBITDA growth of 5.7% or EUR 8 million, was driven by the benefit from inflation with an escalator in 2023 to equal to 3.6%. Contribution for development activities in the traditional TV broadcasting business. For example, the full impact of refarming of RAI and the first impact of the new broadcasting capacity business at regional level, which enabled us to record a double-digit increase in our third-party revenues. A strong focus on OpEx that also the result of some temporary mitigating actions implemented when the price of energy had exploded to over 500 euro megawatt per hour, enabled us to keep all costs other than electricity substantially stable.
The recurring cash generation of EUR 93 million-94 million is further approaching the target of about EUR 100 million set in 2020 for the next year, for 2023, allows us, whilst still preserving strong financial firepower on the one hand, to invest in development initiatives. Over EUR 60 million spent in 2022 with an increasing portion directed to business with customers other than RAI. On the other hand, to remunerate our shareholders with the proposed distribution of the entire profit generated, equivalent to a dividend yield of about 5%. From an operating standpoint, the activities of upgrading RAI digital terrestrial networks, television networks, and for the rollout of the new regional networks has been substantially completed, totally in line with the budgeted time frame and costs.
The implementation of the new digital infrastructure data centers and services such as the content delivery network continues unabated. Since the last update in November, tender processes are ongoing for the construction of 3 additional edge data centers on top of the 5 edge data centers already under construction. The application for planning permission for the construction of the hyperscale data center in Rome, in the Rome area, has been officially started. I will come back on these projects shortly. Regarding the current business with third party, in addition to the contribution of regional refarming in the tower rental segment, we note a continued sustained demand from fixed wireless operators. In addition, the renewal of the contract with the, our most relevant mobile operator customer, the framework agreement with the new entrant, and the start of the 5G rollout also in rural areas.
Please remember that we are paid per space rented on the site and not per site, put us in the RAI direction towards stabilizing the business with mobile operators. The good financial and operational news is not limited to 2022. Full recovery from the energy headwind experienced in 2022 through CPI link, energy price cool down, and further contribution from development initiatives led us to expect a double-digit growth in the mid-teens in adjusted EBITDA in 2023. In 2023, we will also keep investing in the new infrastructure network with the digital transition process, the evolution of telecommunication networks, and the expected uptake of new low latency services supporting and strengthening our optimism on end investment phases. Moving now on slide number six.
You will find a synthesis of a digital terrestrial networks operated by Rai Way following the upgrade activities in recent years. Three RAI MUXes, the macro regional one, entirely new HF bandwidth, and with coverage above 99% of the population, and the 2 national MUXes with the coverage extended to over 95%. The 7 regional MUXes on which we lease capacity to over 140 channels with occupancy close to 100%. Investment in recent years have been significant, around EUR 140 million for RAI and EUR 50 million for the regionals. As clear from the evolution of our numbers, well, fairly remunerated. In 2023, we foresee the last final pieces of investment, which will complete the equipment inventories, this will bring us to the total amount of investment initially estimated. Moving to slide number 7.
As you know, in addition to its traditional business of digital terrestrial broadcasting, Rai Way has undertaken an expansion of its managed infrastructure, focusing mainly on the creation of a network of data centers. These initiatives will drive growth beyond 2023, and projections will be detailed in the next industrial plan. In addition to the usual update on the operational progress of the various projects, we would like to share with you today a flavor of the huge potential we see for these infrastructures.
Existing supply is limited and highly concentrated in one area in the country, in the northern area, while at the same time, the forecasted growth in demand supports our conviction of the risk-rewarded of these initiatives, 5G, IoT, private networks, more pervasive fixed networks, and the resulting digitalization process that will involve business and consumers, are driving us into the so-called fourth phase of the Internet. This digitalization transition will be based on a wide range of use cases, some of which mentioned in this slide, such as industrial automation, content delivery network, high quality streaming, artificial intelligence, predictive analytics that will require complementing the centralized cloud computing with decentralized and distributed computing, therefore edge computing to match the requirements in term of low latency and throughput.
As a result, enterprise data process at the edge will only but increase dramatically, obviously requiring an appropriate infrastructure component for storage and computing. While this is true globally, it's even more in a country like Italy with its orography and up till now limited data center availability when correlated to the GDP produced compared to that of other European countries. Moving to slide number eight. With our project, we are addressing this infrastructural need precisely through a unique proposition based on a network of high quality, TFC also at the edge, distributed and interconnected data centers that enables continued computing with centralized storage and low latency at the regional edge. A carrier-neutral infrastructure, interconnected, independent, based on an architecture possibly comprising an hyperscale data center and around 18 distributed regional data centers.
Two projects, the hyperscale data center and the edge data center that make absolute sense even separately, but represent an even greater proposition when combined under the same offering. Infrastructure to eventually leverage the launch of the new platform and services such as our edge video delivery network that will meet the needs of linear and high definition streaming. As mentioned earlier, we have recently started the tendering process for the construction of an additional three edges in Bologna, Rome, in the Rome area, and Palermo, that will be added to the first five already under construction and expected to complete between late 2023 and early 2024.
Therefore, we are extending the footprint to central and southern Italy. Increasing distributed capacity to 2.3 gigawatts, with an investment of further EUR 10 million-EUR 15 million to be added to the approximately EUR 25 million devoted to the first 5 assets. These assets will be interconnected through the over 5,000 kilometers of the upgraded Rai Way's proprietary backbone in fiber optics, which require around EUR 10 million investment in 2022, and with a similar amount planned for 2023. On the hyper scale in the Rome area, which in terms of size represents the largest and most scalable project, after finalizing the design and the draft agreement with the municipality, we have officially submitted the planning application, the so-called conferenza dei servizi, aimed at involving the various relevant authorities and which, if no critical issues arise, could be concluded by the end of the year.
In the following slide number 9, we recall the typical cash profile for a greenfield or a brownfield infrastructure project. That is, it's also valid for our edge network and data center hyperscale projects. There will be an initial construction phase that will require some start-up costs, but mainly heavy CapEx. For the hyperscale, the rollout will be progressive in order to follow demand module by module or even data hole by data hole within the same module, and we start once authorization is obtained. For Edge, construction has already started for the first 5, as I said before, and we'll continue with the others. Once construction is completed, investments will turn to the maintenance level, not too different, so from towers. We are talking about wide, low single digit CapEx readiness ratio.
While the gradual increase in capacity utilization and sales will first bring the asset to breakeven by covering fixed costs, and when fully utilized, will deliver a marginality that can be estimated within the 40%-50% range. Cash profile that will still grant an expected project unlevered IRR about 10%. As you may easily guess from my tone, we are extremely excited by these projects in terms of potential, the interest they are generating amongst potential customers, capital deployment opportunity, and value creation. Moving to the improvement of our ESG profile. Let me highlight that about two-thirds of the initiatives included in our sustainability plan that goes up to 2023 have been completed, and that the vast majority of the quantitative targets have been already reached.
Just to mention a few of the achievements in the last year, 2022. On the environmental front, apart from being among the few companies to use 100% green energy, we have been able to reduce our energy consumption by 16% compared to 2020. On the governance side, we are pleased to have adopted the first sustainable supply chain policy that within the procurement rules we must follow because of our public nature, we promote strict environmental, social, and ethical standard for suppliers. On innovation and digitalization, while there is no need to stress once again our huge effort, I could remark the social benefit that such innovation brings to citizens and local areas. For example, the expansion of coverage of the national multiplexes or the new regional broadcasting networks.
Moving now to slide number 11, and back to the financial figures for the full year 2022. Before leaving the floor to Adalberto for more details, I would just like to point out that all the economic indicators are moving upwards. With the top line up 6.7%, supported by contribution for development activities and CPI. Relative stable EBITDA margin despite energy costs. Net income up in double digits, an increase that will be also reflected in our dividend. Maintenance CapEx will under control, and a notable amount of capital invested in development capital activities, with a growing portion falling outside the refarming for RAI, mainly including regional refarming, new proprietary fiber optic backbone, digital transformation enabling efficiencies and activities, mainly design and on data centers and CDN, content delivery network.
Our usual sound recording cash generation allows us to remain fully financial flexible when it comes to financing our growth initiatives. Please, Adalberto, the floor is yours.
Thank you, Aldo, good afternoon to everyone also from my side. Let's now look closer to our profit and loss, starting from the top line on slide 12, which reported core revenues coming out at EUR 245.4 million vis-a-vis EUR 229.9 million in 2021. In detail, in 2022, the reported right component was 6% up compared with the restated figure for 2021, benefiting from the full impact of the well-known refarming agreement step up, the positive CPI dynamic, and already anticipated during our last nine months conference call, EUR 2 million one-off contractual penalty collected from RAI and related to the termination of the medium wave radio service, historically a lower margin activity.
I remind you that the slight reduction in new services for RAI is due instead to the withdrawal from a local broadcasting service in the context of regional refarming, which on the other hand, kept pushing third parties revenues up 13.6% in 2022 to almost EUR 35 million. Excluding non-recurring items and non-RAI customers were up 12% with a material acceleration in the second half, enjoying mainly the rising contribution from the new regional MUXes capacity business and as a residual portion, lower pressure from MNO and higher hospitality to other customers, mainly fixed wireless access operators and radio broadcasters. Just to give you a better idea of the impact of the new regional MUXes, we start to sell capacity to our new about 100 customers progressively during the previous year, starting from March.
In fact, in Q1, we didn't see any impact when third-parties revenue, so you may recall, decreased 2% vis-a-vis the first quarter 2021. In the first half, we had a trend reversal with a +6% growth. In the first nine months, we recorded a +9% of growth from our third-parties revenues. Finally, we reach on a yearly basis almost 14% of growth, corresponding to an improvement of 27% on a quarterly basis in the last 3 months of 2022. Not bad at all in terms of impact on our financials. Moving now to the cost and to the slide number 13.
OpEx, you can appreciate our effort on cost control to face the severe headwinds on electricity costs that push our operating cost base up by more than 20% at the end of 2022. As a matter of fact, the electricity bill increased by an impressive EUR 8.5 million over the year, although progressively shrinking in the last month with a year-on-year growth in the fourth quarter of just EUR 1.4 million, compared to the record increase of EUR 6 million of the previous quarter. These figures are net of the significant relief measures deployed by the government in the past month, mainly tax credits up to 35% in December and extended for the first quarter 2023 as well. Top of other reduction confirmed on the ancillary component of the bill.
Benefit from the double-digit reduction in electricity consumption enabled by our brand new and more energy efficient DTT network. Other cost items show a flat underlying trend, thanks to the actions on discretionary spending, and same applies on the personnel cost that remained broadly stable, excluding non-core items and lower capitalization vis-a-vis 2021. All in all, total cost in 2022 reached EUR 95 million, more than 8% up from EUR 88 million recorded in 2021. Without the energy bill impact, costs dropped by approximately 2%. Moving to the profit and loss on slide 14.
As mentioned by Aldo, net income beat the EUR 73 million industrial plan target one year ahead of schedule with a remarkable double-digit increase, +12.7% vis-a-vis 2021, mainly reflecting the higher top line, the broadly stable profitability despite the sharp increase in energy bill and, above all, lower D&A following, as we commented in the last call in November, following the early termination of the useful life of the old DVB-T equipment we replaced. Turning now to our usual net debt bridge, slide 15. From our ratio net debt on EBITDA at 0.7x at the end of the year, you can see how our leverage is growing consistently with the industrial plan trend, mainly driven by development CapEx totaling EUR 62.8 million for the full year 2022.
At the end of December 2022, net debt reach EUR 105 million compared to EUR 88 million at the end of 2021.Cash generation proved to be strong throughout the year, with EUR 93 million of recurring free cash flow to equity. Better explained on the following slide 16. The cash flow made available for the development CapEx and for the distribution of 100% of our net income. I remember the number EUR 73.7 million as a dividend, subject to the approval of our next shareholder meeting. The dividend proposal of EUR 0.2745 per share, implies a dividend yield of almost 5% at current market price, and brings the cumulative distribution since the IPO at roughly half billion EUR, which confirms once again our strong focus on shareholders remuneration.
That's all on my side. I now leave the floor back to Aldo for the closing remarks. Thank you.
Thanks, Adalberto. Moving now to the expectation for 2023. Considering that the fluctuation are still quite sharp, in early December, figures were almost double of today, it's fair to note that the outlook we are providing is based on the most recent energy future prices for 2023, with an average level over the entire year currently around 150 EUR megawatt per hour, so lower compared to 2022 when, however, we'd like to remind you, we still benefit in the first quarter from the around 60 EUR megawatt hour per as a fixed price. Against with reference to the electricity bill, the guidance is also based on, only on the incentives already approved to date.
35% tax credit applied to raw energy limited to the first quarter, and confirmation of the 2022 incentives on the price components other than raw energy, so transportation, dispatch, method, et cetera. Under these assumptions, we expect to deliver an adjusted EBITDA growth rate in the mid-single area, driven in addition to the fore aforementioned reduction in energy prices by CPI link equal to about 11%, rising contribution from regional refarming, lower energy consumption, the startup costs related to the new infrastructure being developed, as explained before, and some negative comparisons affect with 2022, when we benefit from non-recurring items such as the EUR 2 million termination fee paid by MFE or some temporary cost actions to offset the energy peak.
On the investment side, we expect a relatively stable level for both maintenance and development CapEx. In particular, for the development component, the MFE third party mix should be more skewed toward third party as a result of the rollout of the new infrastructure, mainly the edge data centers, and the completion of the backbone upgrade, the fiber optic upgrade. That's all on our side. We can now open the line for the Q&A session. Thank you.
This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Fabio Pavan, from Mediobanca. Please go ahead.
Yes. Hi. Hello. Thank you for taking my questions. I would like to focus on the new infrastructures project you have discussed with us. First question is, could you help us in having understanding on how big could be investment for these projects? The second part of the question is, if it's right to say, correct to say that you already invested in these projects in 2022, something around 20 million EUR, if my calculation is correct. How much are you going to invest in 2023? How much is captured by your guidance? The third question, again on these new projects, is, have you by any chance, already managed to discuss with potential clients about these edge computing data center or hyperscaler?
What's your flavor in terms of feedback from potential customers? Thank you very much.
Hi, Fabio. In term of CapEx, we expect to have actually in 2022, we don't have a significant amount. We will appreciate the first impact in term of investment in 2023, mainly in relation to the edge data center initiatives and the CDN. Consider that, all in all, if you look the our guidance we gave for the industrial plan in 2020 for the period, for the years 2020, 2023, we should reach the same amount we disclosed, that was EUR 220 million.
Taking into consideration the CapEx we had in, this of course, is related to all the projects we have in place, including the EUR 140 million of refarming. You may understand that we should expect to have an impact in 2023 more significant. The big impact will come once we will have finalized all the permitting step with the relevant municipality as concerned as concerned the hyperscaler data center. Actually here, if everything should go in a proper way, we should start to invest on this project in 2024.
Hi, Fabio. In terms of the discussion and talks we had with the possible future edge and CDN customers, we can say that are extremely positive, we are collecting, believe me, a great interest in the assets and in the services. The prospects are those we'd be highlighting in the slide. About the customer for edge data centers, by cloud operators, like mobile operators for the virtualization of the 5G network, so regional data center support, as you know, Cloud RAN. All the providers for who needs low latency and who want to provide low latency services. The infra business is of course a B2B, our customer can provide B2C services or if they want, or B2B services as again.
About the customers for hyperscale, considering the size, the most of the capacity optimization will be secured by the OTT or cloud service providers and the remaining parts by, a remaining part by corporate, but mainly for their private cloud ecosystem.
Let me add on the CapEx side as concerned 2022, in the year you may see the impact of the fiber optic project. That is something that is functional for both the new services but also the core business. Here the amount is of approximately EUR 10 million of CapEx that you will see in 2022.
Thank you very much.
The next question is from Stefano Gamberini from Equita. Please go ahead.
Good afternoon, everybody, and many thanks for taking my question. I have the just the recurring question regarding the update of possible consolidation in the sector. What is postponing any talk or the possibility to go ahead with this project? The second is considering that the timing is continually postponing, are you already scheduling when you can approve the new business plan, considering the existing one expired this year, in order to have a new target, including all this investment in edge data center and hyperscale? Many thanks.
About, yeah, just we reply you for the first question about consolidation. Despite the steps forward in 2022, as you well know, that the PCM, the shareholder advisors work, NDA between shareholder sign, the consolidation project has not yet come into full swing. A project that, as known, involves also actors that are other than Rai Way. I do not think there is a lack of will, certainly not ours. We remain convinced of industrial rationale, the relevance of opportunity. Therefore, we will continue to support the possible creation of a large national broadcasting infrastructure player, pending the aligning of all parties involved.
At the same time, we will keep the push and commitment to all the rest of activities and diversification we will be pursuing, on which we are equally confident in terms of value creation. A bit about the business plan. About our business plan, we are planning to present a new industrial plan with the presentation of the 2023 year-end financials. Next year March.
Thanks a lot.
As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to ask for a question, please press star and one on your telephone. The next question is from Pilar Vico from Credit Suisse. Please go ahead.
Hi, good afternoon, thank you for taking my question. I just have one on my side. It's regarding the debt refinancing that is upcoming this year. Is there any plan, any sort of a structure or, how are you managing this fund? Thank you very much.
Hi, Pilar. We're starting to talk with our main banks, with the banks that are providing our financing and also with other banks. The maturity is October 2023. Before that date, for sure, we will have in place something new.
Thank you very much.
For any further questions, please press star and one on your telephone. Mr. Benucci, there are no more questions registered at this time.
Okay. Thank you all, and speak soon. Bye-bye.
Bye.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.