Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Trevi Group conference call on full year 2025 results and business plan 2026/2029 and financing package. 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. Giuseppe Caselli, CEO. Please go ahead, sir.
Thank you very much. Good morning, everyone. First of all, the results of 2025 show a solid operational performance. Our recurring EBITDA is +2.2%, like for like, with a record EBITDA margin of 13.7%. We had a strong improvement in group net profit, +56.7% reported and 24.4% adjusted. We have a well-diversified backlog at 31 December over EUR 747.48 million, supported by a strong order intake in 2025, over EUR 734 million, +21.3%, compared to year 2024. Our Middle East activities are not affected by the current events, and they are progressing as they should.
Regarding our business plan 2026-2029, we aim to reinforce our leadership in complex and high value projects, basically continuing to proceed in the same path that we initiated some years ago, four years ago, five years ago. We will continue with our diversification in trying to get contracts around the world in a different geographical area with always a very disciplined approach in terms of risk balanced with profits. Soilmec division is the one that went through a long journey in terms of improving its results. Now we are focusing on new products and dedicating to a new production line to support our commercial growth. In 2029, we expect revenues exceeding EUR 750 million, with a recurring EBITDA of EUR 100 million.
Third element that is, the new element for this year is, the financing package. The net debt returning to in bonis position. This will help us to support, accelerate business plan towards 2026 to 2029. We strengthen our capital structure, reducing net debt close to zero by 2029. This will allow us to finally seize some potential future acquisition, each acquisition in our cluster of activities. In terms of 2025 results, we see that our revenues have reached EUR 634 million. That is within the guidance that we gave, compared to the EUR 663 million in 2024. In terms of recurring EBITDA, we reached EUR 85.5 million, compared to the EUR 83.6 million in 2024.
Despite having less revenue, 5% less revenues, we have increased our EBITDA compared to the previous year of 2.2%. The total adjusted net profit reached EUR 19.4 million, +24.4% compared to the total adjusted net profit in 2024. That was landing at EUR 15.6 million. That in turn was +31% compared to the previous year. The free cash flow from operation, we reached EUR 51.3 million, +18.7% compared to 2024. That was standing at EUR 32.5 million in 2024. Net debt, EUR 187.4 million compared to EUR 199 million roughly in 2024.
The leverage ratio is standing at 2.19 compared to 2.38 in 2024. One of the key elements of our performance is based on the fact that we have a well-diversified order intake across different geography. You can see that there is a mix between North American projects where we are extremely focused and we expect an increase in this business plan in terms of opportunities and revenue. Middle East project is stable, reducing from the past, but stable in the plan. Of course, it will be across Saudi Arabia, United Arab Emirates, Oman and Kuwait, plus of course other parts of the world like Far East, Philippines, Australia, New Zealand, and the like.
Of course Italy, Spain and South America, Argentina, where we are focusing our activities in those opportunities that are mainly related to specific business that can support the level of profitability that we expect from a project. In addition to that, we have seen in the first two months a positive momentum in the commercial activities. Our order intake in the first two months was EUR 157 million, January, February, compared to the EUR 110 million that was in the first two months of the previous year. We have, at the end of 2025, a backlog of EUR 734 million. In the next slide, you can see the backlog evolution that, as mentioned before, was EUR 748 million at 31 December.
The geography of this backlog, you can see is split in different parts of the world. We have 40% the Europe area, 18% the Middle East, 17% North America, 12% Far East, 8% Africa and 5% South America. This again is a proven proof of our diversification around the world. It has to be mentioned that by end of February, the backlog reached EUR 837 million. It's one of the highest, if not the highest level of backlog that the company has never achieved. This is another positive sign that will allow us to look at the future at 2026 in a more positive way. Now, I would like to leave the floor to our CFO, Mr. Auciello, in order to proceed with the presentation.
Thank you, Gigi, and good morning, everyone. Let's begin with the slide 10, which summarizes the main highlights of Trevi Group's full year 2025 results. In 2025, group revenues reached EUR 624 million, a 5.9% decrease compared to 2024. Despite the lower top line, the EBITDA increased by 2.2%, moving from EUR 83.6 million to EUR 85.5 million. This improvement was primarily driven by the strong performance of the Trevi division. We also recorded a further improvement in profitability because the EBITDA margin rose to 13.7%, reflecting our disciplined approach in awarding and executing projects with solid and healthy margins. Let me add also that our reported and recurring EBITDA are not materially different.
Extraordinary costs amounts to roughly EUR 3.5 million, demonstrating the quality and stability of our operating performance. Moving down the PNL, the adjusted net results reached EUR 19.4 million, compared to EUR 15.6 million in 2024. We still refer to adjusted net profit because both 2024 and 2025 were affected by the reversal of non-monetary financial impacts related to our successful 2023 restructuring. These effects, mainly linked to IFRS 9 accounting on that, will phase out progressively in 2026. The difference between adjusted and reported net result equal to EUR 10.8 million reflects the portion of IFRS 9 reversal absorbed in 2025.
As a result, the reported net profit was EUR 8.6 million, a solid figure and higher than 2024. Free cash flow was also very positive, reaching EUR 51.3 million, an improvement of EUR 19 million year on year. This confirms the progress made in cash conversion and demonstrates our ability to translate margin improvement into cash generation. Moving to slide 11, you can see the geographical breakdown of our revenues. In 2025, Middle East remained a significant contributor, even if with lower revenue in absolute value versus 2024. However, our revenue base is well diversified across the regions, ensuring strong positioning in multiple markets and enhancing our capacity to capture new commercial opportunities. Let's now review the performance of our two divisions, starting with Trevi.
Revenues exceeded EUR 500 million, down 5.8% from last year. This reduction is mainly attributable to lower activity levels in Far East. As I said a few seconds ago, Middle East also registered a decline versus 2024. However, the projects executed in the region were highly accretive for the group's profitability. Lower revenue in Far East and Middle East were partially offset by stronger activity in Europe and North America. The recording EBITDA is almost EUR 79 million, up 7% year on year, with an EBITDA margin of 15.5%, which is an increase of 180 basis points compared to 2024. This improvement was driven by a favorable geographical mix supported by projects in Saudi Arabia, UAE, Tajikistan, and other countries.
Naturally, this EBITDA growth has been instrumental in strengthening the group's overall economic and cash flow performance. Turning now to the Soilmec division, we see a similar dynamic as in Trevi, slightly lower revenue but stronger margins. The revenue decline was concentrated in the first half of 2025, influenced by the uncertainty surrounding the potential U.S. government tariffs, which temporarily slowed sales in North America. This gap was almost fully recovered in the second half of the year, thanks to improved sales momentum in U.S. The overall revenue were down 1.9%, but recurring EBITDA increased both in absolute terms and in percentage of revenue. The margin improvement also reflects the impact of an internal program focused on enhancing production efficiency and procurement processes.
You can see already the slide 14, and so we are now focusing on the group profit and loss. We have already commented on revenues and EBITDA, so let me now highlight the main items below the EBITDA. Depreciation amounted to EUR 27.8 million, lower than last year due to reduced depreciation on leasing contracts under IFRS 16. Financial expenses decreased from EUR 13 million to EUR 27.5 million, despite slightly higher non-monetary IFRS 9 charges equal to EUR 10.8 million versus EUR 10.1 million in 2024. This improvement mainly reflects lower interest on our debt, because in 2025, we recognized EUR 13.4 million interest, down by EUR 2.3 million compared to the previous year. Moving to the income tax.
The income tax totaled EUR 11.4 million, related to taxable income generated in jurisdiction where we have no tax loss carryforward available. Finally, the net profit reached EUR 8.6 million. The portion related to minority was limited around EUR 600 thousand, meaning that almost the entire profit belongs to the group. Let's move on onto the cash generation section. As shown on slide 15, we maintained a strong focus on cash generation with the objective of reducing our debt. At the end of 2025, operating cash flow is nearly EUR 72 million with a cash conversion of 80%, and free cash flow to firm is EUR 51.3 million.
This positive result was supported by strong operating performance, positive working capital dynamics, and it allowed us to fund EUR 20.5 million of CapEx and, as we will see shortly, meet our debt obligation. Moving to slide 16, this shows the evolution of our net debt position.
Cash generated during the year improved our net financial position by EUR 22 million on a pre-IFRS 9 basis from EUR 221 million to EUR 199 million, and by EUR 11.5 million on a post-IFRS 9 basis from EUR 199 million to EUR 187.4 million. The 51.3 million of free cash flow enabled us to cover EUR 14 million of interest payments and dividend to minorities, and to cover also EUR 3.5 million of extraordinary expenses, despite a negative Forex impact of EUR 10 million due to the depreciation of U.S. dollar against the euro beginning in March 2025. On slide 17, we show liquidity and gross debt as of December 2025.
We have, at the end of 2025, a solid liquidity position of EUR 98.1 million. Other current financial assets totaled EUR 1.4 million, decreasing by around EUR 12 million due to the collection of receivable linked to 2020 disposal of the oil and gas division. Gross debt amounted to EUR 286.9 million, improving by approximately EUR 25 million versus last year. Reducing the gross debt, let me say that really reducing the gross debt remains a key priority for Trevi, and it is one of the pillar of our new strategic plan.
A more detailed overview of the gross debt is provided on the right-hand side of the slide, where we can see that IFRS 9 assets and pay interest totaling around EUR 15.5 million were more than offset by EUR 40.5 million of debt repayments, including both long-term amortization and repayment of short-term facilities. Let me now spend some words on the short-term debt. All in all, the gross debt amounts to EUR 286.9 million, of which EUR 269.2 million is classified as short-term. This amount include EUR 29 million of short-term facilities and EUR 214 million of debt that was rescheduled under the financial restructuring agreement signed in 2022. According to that agreement, the rescheduled portion matures on December 31, 2026.
For these reasons, it has been reclassified from long-term to short-term debt in 2025 balance sheet. This debt will be fully addressed within the new financing package that I will illustrate in a few minutes. The package provides, among other measures, a significant longer maturity of the debt, ensuring full coverage of this exposure. Coming back to the calculation of net debt, after deducting the cash and liquidity and as well as other current financial assets from the gross debt, so we have the net debt at year-end that stood at EUR 187.4 million. Our leverage ratio as net debt over recurring EBITDA stands at 2.19, and it is comfortably below the 2.75 covenant threshold set for December 2025.
Let me now hand back to Gigi for the strategic plan.
Thank you very much, Vincenzo. Now we have a look at what are the main elements on which we based our 2026 to 2029 business plan. Fundamentally, we could say that we have a good way, a good start in terms of initial of 2026, that is deriving from the tremendous amount of work that we have done in the previous year. I would like to reinforce the fact that so far in all these years, we have also maintained what we have declared to the market, and we have even sometimes overachieved the figures that we gave to the market.
It means that the way of how we are approaching how to plan our future is based on fundamentals that stands. Now we have to enrich, we have to improve, we have to increase the efforts that we have done so far in order to continue delivering to the market what we are promising. Regarding Trevi, basically our aim is to strengthen the position in a complex project. Complex project, of course, they have a risk and reward situation where, basically, considering the fact that our know-how, our capability, our knowledge of business, let us take on this type of project, so we have a major reward. This is what we are looking for. Unfortunately, we cannot base our plan just on this type of projects because these are the one that the market offer.
We have to live also with other activities that we consider bread and butter business as usual in our normal activities worldwide. The second element is to try to diversify as much as we can to balance our operation around the world. This will be visible from the other chart that we are going to present in the next slide. Of course, last but not least, to improve our corporate and operational structure. We have done quite a lot, I would say, but we never, ever think that we reached the level that we should. We supposed to keep on improving, trying to find any possible solution in order to improve our corporate structure.
In terms of Soilmec, again, Soilmec went to a long journey where we started in the beginning with a new industrial approach, starting from high production to lean production. Applying the concept that come from automotive to our industry, our equipment. We have rationalized all the production site along Italy, having improved the way how we build things, how we construct things. We have concentrated in just in one only area production, that is Cesena. Now, since we keep on trying to improve our KPI in production, definitely we have to we have started to develop new products that so far, the one that we have presented even recently in the fair in the States, the most important fair in the States, have a lot of audience and a lot of attention.
It means that our thinking is found extremely positive to the market. We will try, since we have reinforced, we will reinforce our financial structure to present ourselves on the rental market with a limited number of equipment. In order to avoid some barriers that are dictated by rules and regulations, specifically customs rules and regulations, we have dedicated a new production line in South America for a specific market with a specific type of equipment that has quite a market in South America. I am proud to say that in less than eight months, with a minimal investment cost, we have produced the first two equipment; one has already been sold, and the other one is already under negotiation.
Again, it means that our idea in trying to find out where and how with the limited resources that we have to try to improve our market penetration is proving right. Last but not least, to improve our supply chain and procurement. This is one of the key elements that will definitely drive the EBITDA of Soilmec higher than the others. Simply because we are convinced that we can buy better. We can have those equipment and parts that we need in order to assemble machine in a more just on time approach. This will be even helping us in penetrating the market to provide the equipment in a shorter time. We have seen that in a certain equipment, so far we have been able to reduce our time to market from one year to six months.
This is where we are going to work aggressively in the next, in this plan. On which basis we have developed our business plan? Well, usually, as we have done so far, and again, the fact proved that we were right, we have a bottom-up approach. We don't reinvent the wheel. We base our analysis on fact, and the history is our fact, where we based our construction of the plan based on those opportunities that are visible and are tangible. However, we confront what is the result of this plan with what the market, the compound annual rate that the market give us in order to see if our assumption, our analysis are comforted by this type of approach.
Even this year, in this plan, it's visible that we have considered a compound annual growth rate of 5% for drilling, while the market, as shows slide 20, gives a variance between 5.3%-6.8%. Similarly, in the equipment, we are envisaging a CAGR of 5.1%, and the market shows between 7%-5.1%. If somebody will have a look to this, just this type of figure, you can see that our business plan is definitely something that is sustainable in terms of our activities. I just mentioned, in the previous slide, you know, what are the basic elements on which we built our business plan.
For sure, we are going to focus ourselves on those area where there is a high growth and better margin aligned with our positioning. It mean that we are going to concentrate for the next years in Americas. When I say America, I say United States that recently have seen an increase in terms of opportunities. In South America, but South America only on a specific opportunity driven by projects where there are visible projects and projects with that serves specifically business that has a remuneration. In this case, Argentina, we are working for the oil and gas sector.
Last but not least, to continue to have a presidium and a strong presidium in the Middle East, but rebalancing the weight of Middle East with other parts of the world, because we don't think that the Middle East could grow as it has grown in the last couple of years. Of course, we go to rationalization of costs that in turn mean rationalization of non-core branches. At the same time, specializing ourselves more and more in those that we are best of. In terms of high complex, high technical requirements projects where we can again value the risk that we are going to have doing this project, and well paid to have the remuneration that is in line with the risk and the knowledge that we have. More the knowledge rather than the risk.
Of course, it's our aim to look for a project that has a longer span in terms of execution, so a larger project. As you know, in our business, the project has a range between three to nine months. If we could have a project that even touch the one-year lifespan, this will improve our stability in terms of revenue and of course, our generation of EBITDA. One of the key element that has brought us to the level where we are is the monitoring of our cost and the reduction of our cost in terms of corporate and operational structure.
In terms of Soilmec, well, we are trying now, since we have gone through the various stages where we have changed our industrial approach, we have reduced our base cost of production, we have rationalized the production line together with the products that Soilmec is producing. Now is the time to have a portfolio expansion in order to penetrate better certain market. This is for instance generating the fact that last year we were thinking to have a production line, a small production line, but effective production line in Brazil, where, as you know, the cost of the customs are extremely high. Producing outside and trying to penetrate the market, producing outside of course has a tremendous barrier entry.
Nevertheless, if you produce in Brazil, you have the facilitation with the local financial institution that provide loans to the various companies that are buying our equipment. Proudly, I can say that it was a very fast-track project with a minimum investment that we have done and completed. We have already produced one, the first of its kind, of this type of equipment. The second one is just behind. Of course, the market has acclaimed this type of the product extremely positive. They are receiving it extremely positive. We expect to stabilize our production in a certain number of equipment that when it will be at regime, it will be in the range of 12 equipment per annum, one per month.
Nevertheless, if this type of approach is proven successfully. We are going to seek to produce another type of equipment that is one in a range that Brazil is using the most. Again, I want to see what is the result on the first one and to see if everything will go per plan when we start with the second line. As I mentioned before, one of the key element in order to reduce cost to have better profitability is to widen our supply chain and to improve our procurement efficiency, and nevertheless, is to reducing the time to market from producing the equipment and selling the equipment.
Last but not least, the other element of the business plan is since we are going to strengthen our financial structure to present ourselves also in the rental market for a niche number of equipment. Those equipment that has an appetite in the market and can be eventually reutilized in a different way, in the market, of course. It means that after a certain period of rental, they can be sold to other contractors that want to buy second-hand equipment. In terms of figures, what we expect.
What we expect that we will start from EUR 644 million in 2025, and considering a CAGR of 5.5% in line with the market, the minimum target of the market say, we are going to hopefully achieve above EUR 750 million. In terms of EBITDA reaching the EUR 100 million mark in 2029. In terms of CapEx from the current EUR 21 million per annum to reach cumulatively in the four years around EUR 90 million CapEx. In a nutshell, we want to deliver a resilient and sustainable growth to the best position our group in the market itself.
Regarding the division drilling, I'm expecting a lot of questions in terms of the Middle East, what is the situation, how we are going, what is going to happen. We can see that, drilling will have a CAGR of 5%, as I was mentioning, along the business plan. From the current EUR 5.6 million in 2025 to above EUR 600 million in 2029. In terms of recurring EBITDA, an increase from the EUR 79 million to above EUR 80 million in 2029.
If you see on slide 23, the market distribution by geography, you can see that there will be a rebalancing of the various geographical area, especially in Europe, where we see currently we are at a 47% to 27%. The Middle East that dropped from 22% to 19%. Sorry, I made a mistake in terms of color. The Middle East is from 47% to 27%, and Europe to 22% to 19%. The other one, you know, the USA, we see as an increase of the portion from 14% to 26%, and the Far East from 9% to 18%. Basically, it's visible the reduction from the Middle East on the current situation in 2025 to 19.
Again, it is not dictated by the current scenario that nobody knows where it's going to end, but by the fact that the Middle East has gone to a tremendous increase of activities in this year, and we don't think that it can continue on this way for the year to come. We have to find out different area in the world where we can express our capability to work. As I say, one is the United States of America, where we have a strong and solid company. There are opportunities, and the outlook seems to be extremely positive. Together, we try to penetrate also in a different market in Central America, where currently we are building different projects. Regarding Soilmec, we can have as we...
We have currently EUR 142 million in 2025, and we expect with a CAGR of 5% to reach 155. The EBITDA will have a better improvement from the current EUR 13 million to around EUR 20 million and above. The distribution here is divided by type of equipment. Of course, we are concentrated in those equipment that have a higher technological value at the same time, of course, and a higher EBITDA value. Basically, we are talking about Hydromill, cranes. We don't do so many cranes, but you know, specific cranes for soil compaction, and piles in the middle range, where currently we are considered the best company in the world in terms of equipment efficiency.
I'm proud to say that we are reaching the same level in Hydromill. Basically, Soilmec now around the world, the reputation of Soilmec around the world, is extremely high for piles, equipment that do piling for, especially for the mid, medium high range and for Hydromills, where we are reaching a level of excellence, and we are even surpassing our competitor in terms of quality and performance. This is a process that took not so much considering that we have completed, we have bridged the gap with the competitor in Hydromills in a very short time. Now, I will leave the floor to Vincenzo for going through the financing package.
Okay. Thanks, Gigi. Let me now move so to the key objectives of the financing package at slide 26.
First, the overall goal is to bring Trevi's debt fully back to an in bonis position, completing the transition out of the 2022 restructuring perimeter. Second, the refinancing allows us to significantly extend the group's debt maturity profile up to 2031, ensuring greater financial flexibility and full alignment with the business plan horizon. Trevi's ability to pursue the growth and the strengthening of the equity base is a natural consequence of this measure. Fourth, the overall package enhances our ability to execute the business plan, providing the financial capacity needed to support organic growth and to secure new tenders and projects awards across our core geographies. Fifth, the financing package also puts the group on a clear deleverage path.
Leverage decreased from roughly 2.2% in 2025 to around 1.2 x at year-end 2026, and further down to approximately 0 by the end of 2029, in line with the strategic plan. Finally, with a more robust financial profile and significantly lower debt exposure, Trevi will be well-positioned to evaluate future growth opportunities from a position of strength. Overall, this financing package is fully aligned with our strategic priorities and is designed to provide stability, flexibility, and support for the execution of the business plan over the coming years. Let me now take a moment to walk you through the financing package that underpins our industrial plan. It is a comprehensive and well-balanced solution designed to give the group the stability and the runway we need to deliver on our strategy over the next few years.
I start with the refinancing. A refinancing of EUR 170 million. We have already secured a comfort letter from a pool of leading financial institutions, which gives us a very solid base to move forward. A term sheet has been agreed with the financial institutions outlining all the key terms, including a structure that combines a pre-amortization phase with a progressive amortization schedule extending to 2031, the maturity of the new debt. Final approval from the financial institution is subject, of course, to their respective competent corporate bodies approval. We expect to execute the agreement within the summer break, and at which point, we will provide the full visibility on all the terms. Overall, this tranche gives us long-term stability and capital structure to support, as I already mentioned in the last few minutes, the growth trajectory outlined in the plan.
The second component of the package is the EUR 100 million rights issue, which is already fully covered. This is a very important signal for the market. CDP Equity has provided a commitment to subscribe its pro-rata share, which represents about 21.3% of total amount. For the remaining 78.7%, we have secured a pre-underwriting agreement from a primary Italian bank. This means that the entire transaction is effectively covered before launch. Something that, let me say, especially in the current market environment, sends a clear message of confidence in our strategy and the direction the company is taking. We will submit the request for the relevant authorization to the shareholders at the extraordinary general meeting on May thirteenth. We expect to launch the rights issue at the end of second quarter and complete it before summer break.
Strengthening our equity base is a key pillar of the maneuver. It give us additional resilience, lower leverage, and position us to better capture new opportunities. The last element of the package focuses on short-term facilities and bonding lines. These are essential tools for a group like ours, given the nature of our contracts and cash dynamic of our international operations. The short-term facilities will support our working capital requirements, while the bonding lines ensure we maintain the necessary capacity to bid, win, and execute large projects across our key markets. About this topic, discussion with the banks are moving in parallel with the refinancing, and we expect to finalize these lines concurrently with the time of refinancing. To summarize, the financing package is fully structured, well progressing, and entirely aligned with the needs of our industrial plan.
Between long-term refinancing, the fully covered rights issue, and the support on working capital and bonding lines and bond facilities, we are building a capital structure that is stronger, more resilient, and capable of supporting the Group's growth over the coming years. Turning to the slide 28, let me illustrate the evolution of the Group's net debt and the impact of the 2026 financial package. Starting from the net debt of EUR 187 million in 2025, the financial maneuver, and in particular the rights issue planned for 2026, generates an immediate and significant reduction, bringing the net debt to around EUR 90-100 million by year-end 2026. From that point onward, the projected improvement in operating performance and margin under the business plan, along with the generation of cash, drives a consistent deleveraging path.
As shown in the chart, net debt continues to decline steadily through 2027 and 2028. Crucially, when combining the successful execution of the rights issue and delivering the business plan and this expected profitability and generation of cash in terms of free cash flow from operations of about EUR 160 million along the plan, so the group is projected to reach an essentially close to zero net debt position by 2029. This is a key takeaway of the financial maneuver.
The strengthening of the equity base in 2026, together with the progressive cash generation embedded in the plan, positions the group to achieve a net debt EBITDA ratio moving from 2.2 today to approx. 0 by end of the horizon, so significantly reinforcing our financial resilience. Now let me get back to Gigi for the closing, for the guidance and the closing remarks.
Thank you, Vincenzo. Well, in terms of we go to slide 30, where we give the guidance for 2026. In terms of group revenues, we are expecting in the range between EUR 640, EUR 670. This range of revenues is supported by our solid backlog that is being already secured.
As mentioned before, if you recall, we reached more than EUR 800 million in February, already in February in terms of backlog. Of course, Trevi and Soilmec both, they are two halves of the same apple, are going to contribute positively to the group growth. As I was mentioning in the previous conference call, our business is based on the fact that our jobs, our projects as they last between three and nine months, looking how they are going to distribute the revenues in the year, we will have a softer first half and harder second half.
It means less revenue in the first half and major and bigger revenue in the second half due to the fact that the projects are starting in phases along the year, but of course within the year. In terms of recurring EBITDA, the range that we are foreseeing today is between 70 and 80. Of course, the EBITDA goes in line and in parallel with the distribution of the revenues, so softer in the first half and better in the second half. Regarding net debt due to the financing maneuver that Vincenzo just explained, we believe that at the end of the year we will be between EUR 90 million and EUR 100 million. What to say more?
Well, what I want to say, the takeaway is that we have achieved the 2025 with a solid result. 2025 is not just the first year that we show this type of result, but is a continuation of the previous successful year. I would say that since 2020, we always, and I remark, and I underline, always maintained our forecast in terms of financial result, even during the COVID. We have a well-diversified backlog that has been already acquired, and we have a strong order intake for the first two months. We are seeing that there's a lot of opportunities around the world that are still and keep on presenting to ourselves. We are trying in the early 2000
In the first two months, we are seeing a positive momentum in terms of commercial activities that allow us to even move our sight towards area where we are trying to enter in order to better, even better diversify and to have more opportunity around the world. As I was mentioning, and of course, I'm ready to take all the questions related to the Middle East. So far, the Middle East has not been affected by the current situation, has been affected by other things, but not the current complex situation.
The business plan is expected to deliver sustainable growth along the four-year plan with the results that we have shown in the previous slide, where we plan to reach more than EUR 100 million in terms of recurring EBITDA. Last but not least, it is one of the key elements of this business plan, one of the fundamental elements. I could say a cornerstone of this business plan is a comprehensive financing strategy that is mainly tailored to enhance financial flexibility to support our mid- to long-term growth and strengthen our capital structure. I have concluded our presentation, and now we are ready to take the questions that the floor may raise.
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. We will pause for a moment as participants are joining the queue. First question is from Filippo Mazzoleni, Alantra.
Yes, good morning, everyone. Can you hear me?
Yes.
Yeah. Good morning, everyone. Filippo Mazzoleni from Alantra. First of all, congratulations on the results, particularly on the improvement in mix and the overall quality of earnings. I have a few questions, starting with the 2026. Is the expected decline in EBITDA mainly driven by project phasing effects, meaning that newer orders will ramp up later than previously expected? Or should we also factor in some normalization of margins? Then on the financial package, how much of the capital increase is intended to support growth versus deleveraging? Just to follow up on the medium-term deleveraging, you target a net debt close to zero by the end of the plan, and excluding the capital increase, this would imply a meaningful level of annual cash generation, circa EUR 30 million per year, compared to your historical track record.
Could you elaborate on the key drivers behind this improvement? Thank you very much.
Okay. I will take the first question, and Vincenzo will take the third one. All right. The first question is related to the fact that the EBITDA absolute value of this year is lower than the previous year. Well, as you know, although we are selective on the market opportunities, definitely we don't create the market opportunities. We have to take what the market. We have to be very fast in order to get those opportunities that the market present. What we have seen in 2026, we don't see projects with a very high profitability. This is happen in a specific case, you know.
It happened in the past, and for sure it will happen in the future. We don't see, for this year, those major projects that of course are embedding a bigger risk than the other, but at the same time as a major reward. Since we do our business plan on a bottom-up approach, the visibility that we have, not we pretend to have or we invent, this is the result. Definitely, this opportunity with a major profitability will appear in the year 2027, and we are ready to take those opportunity. We have to be extremely fast to snatch those opportunity whenever they appear. We don't see this year such a kind of normalization for this year of our expected EBITDA.
The fact that is the first semester will be softer than the second is again this is dictated by the fact that when the project starts and when we are going to end those one. In the beginning, there was this year, we have seen that there are certain activities that are having a slow start, not due to us, but due, for instance, permits that the client has to receive in order to proceed with the projects or reengineering of the foundation for certain development that the client is carrying on. Of course, we are there on standby, so the client recognize our cost, but definitely the cost is not equal to the revenue that you can express when you have a full-fledged project. I hope that I answered your first question. Then
Yes.
The second question, if you help me to remember, please.
Yeah. The-
The proceeds of the rights issue. Correct? No. Yes, the proceeds of the rights issue. Yes. What is dedicated. Well, in this period, we have studied quite a lot various opportunities in the world, and we are discussing around the world on certain niche, I repeat, niche opportunities in our cluster. Because we want to have, we want to try to take those opportunities where we can maximize our profitability, our level of profitability. The amount, well, it depends upon how these opportunities will be available to us. You know, in our scenario, we have three, four opportunities in front of us, and we are trying to see which one will materialize first and which of those will materialize in the next period.
Not because I don't want to give an answer, because that's the way. I don't have the answer, you know. Filippo, I think one of your question was about the proceeds of the rights issue. Correct?
Yeah, it was, you know, he already answered about that one. The next one was about the cash generation during the period. I calculated around EUR 30 million per year up to the full leverage expected in 2029. What are the main drivers that I mean should drive this reduction in that important reduction? Thank you.
Okay. Let's start from the proceeds. The proceeds from the rights issue are, again, an integral part of the overall refinancing package. The proceeds are primarily intended to reduce the group's debt, financial debt, and thereby increasing our financial flexibility within the new refinancing structure. There is a smaller portion of the proceeds that will remain available straight away as a liquidity. That's not the predominant part, the predominant component, but it provide us an additional degree of flexibility to assess potential growth opportunities in the cluster, as our CEO was saying. Regarding the cash generation, let's say, the free cash flow plays a central role in the net debt trajectory shown in the plan. We have seen essentially net debt close to zero in 2029.
That is, let's say, a combination of the rights issue of EUR 100 million in 2026, plus EUR 160 million, more or less a projection, EUR 160 million of free cash flow during the horizon. Let's say that this cash generation support both interest payment and amortizing structure of the new financing package, leading to a steady and visible deleveraging path and net debt position close to zero by end of the plan. I would say that the 160 are progressive. We start with the lower cash generation in 2026, and we increase the cash generation along the plan following the increase of EBITDA.
Okay. Thank you.
Next question is from Alessandro Cecchini, Equita.
Can you hear me?
Yes.
Hello? Okay. Thank you very much for taking my questions. The first one, it's if you can elaborate a little bit on the backlog. Your exposure is clear in terms of geographies, but if you can elaborate a little bit more if it's concentrated on single large projects or which kind of profitability the backlog has. If you can increase, I will say, the visibility on this. My second question is instead about, you spoke about a very good order intake in the first two months.
We would like to better understand if, I mean, in terms of orders, projects, et cetera, there is a sort of a slowdown linked to the Middle East war, not only Middle East, but in general to the market. Finally, my last question is about which kind of impact are you expecting in terms of financial charges. We believe a reduction, but if you could elaborate a little bit more on this. Thank you.
Right. I start with the first one on the backlog. Usually, what we are trying to achieve is to have a backlog that is consumed in the year. Basically, we don't try to have. We are very cautious in trying to get as much backlog as we can. No. We are trying to have a backlog that is consumed in the same year. It's always a backlog that is renewing itself month by month. It means that if we have an average of EUR 40 million revenues per month, we try to get EUR 40 million, right, EUR 40 million of new projects per month. In order to have always a backlog that renew itself month by month.
It's because we don't want to take an excessive risk in terms of spikes that you can have in terms of cost of material, cost of transportation. You have always, you know, a sort of a check and balance situation of what you get and what you do in the month. In terms of major projects that are in the backlog, for instance, we have one big project in New York with the tunneling of that link New Jersey with Manhattan and the related activities. Plus, we have certain projects in the Philippines. If you recall in the latest year, Philippines has always been an area where we were expecting projects to come.
Now, since end of this year, a certain amount of project has been awarded finally, and we are taking an important part to it. Nonetheless, we are participating to other projects around the world that are extremely important, with a size that is bigger than the normal size around the world. I'm not allowed to say where because, you know, I'm bound by the confidentiality agreement with the client. But the pipeline that we have in front in terms of bigger project is not bad at all, put it this way. You have to be successful in order to have it on your backlog. In terms of your question in the Middle East.
In the Middle East, we don't have projects that has a large amount. These are projects of the medium size, the size that for us is business as usual. Projects that range in between EUR 7 million-EUR 20 million maximum are more on the size of EUR 7 million, EUR 10 million rather than EUR 20 million. What we have noticed even recently that all the even the pipeline commercial activities are proceeding. Nonetheless, we are expecting certain awards during these days. As you know, recently has been the Eid al-Fitr after Ramadan. That usually is a period when activity soften quite a lot. Now we are expecting that those activities will be concluded during this period in April. No more than that.
Nevertheless, there is a continuous amount of opportunities that are flooded to various contractors where we are working on it. The other question, if you can help me, please.
Yes. In terms of financial charges that with the new package.
Okay. I leave the floor to Vincenzo.
Thanks, Alessandro. Thanks for the question. Let's say that the new financing package marks a clear return to a normal, so to a market-based capital structure following the restructuring phase. As a result, the interest rates applied to the new facility are market based and fully consistent with a senior financing structure for a group with a credit risk profile. Also taking into account the de-risking effect of the capital increase. It seems, however, it's important to look at financial expenses in absolute terms rather than only pricing. The financing package is built around a significant lower level of net debt compared to the past, combined with an amortizing repayment profile. This leads to a progressive reduction in outstanding debt over the plan period.
As a consequence, despite the market-based interest rates, we expect financial expenses in absolute value to gradually decrease over time and, in line with the leveraging trajectory embedded in the plan. If we consider if we mention, for instance, what was something that I mentioned in the presentation, we're talking about in the range of EUR 14 million interest in 2025 on the net debt. Let's say this amount will be progressively lower during the plan, thanks to the effect of the leveraging part of the group we have explained. In absolute value, we will have lower interest along the plan.
Okay, thank you. If I may, just to recap, on the Middle East, in your plan, I don't know if it was executed before or after the war, but it seems that from your words that you expected already a decrease in turnover because actually making calculation 2029 sales are roughly minus 30% in Middle East versus 2025. You are already accounting a sort of normalization of the Middle East regardless the current situation. Is it right at this point?
Because the line is not clear. Anyway, if I got it well, your question is about what is the endpoint of Middle East in terms of revenue in 2029, where we were already planning a rebalance, more than a reduction, a normal physiological rebalance because we have seen a kind of explosion of investment in Middle East in 2023, 2024 and 2025. Our revenue has been, let's say, also boosted up by this cycle of investment in Middle East. We don't see the cycle of investment of Middle East at upside as last year. That's why in our portfolio of projects, in our portfolio of revenue in 2025-2029 is rebalanced. It's not an effect of the war, as also the CEO said.
It's more because in our strategy we don't see that cycle of investment, and there is a rebalancing of our portfolio project along the plan ending in 2029.
Okay. Thank you.
Of course, you know, what is important to say that we have seen since I arrived at the end of 2019. There was a period in 2020 where the Middle East was extremely low in terms of coverage. Then it exploded first in Saudi Arabia and now in the Middle East. For instance, in our plan, if for instance, The Line or anything like that on a major project will come to light again, definitely we are going to participate. But we don't count on those type of milestone cornerstone projects because as of today, we don't have the visibility.
Okay. Thank you.
Mr. Caselli, gentlemen, there are no more questions registered at this time.
Okay. Thank you very much indeed. Thank you for the audience, and have a nice day to everybody. Thank you.
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