Welcome, thank you for joining the Webuild 2022 Results and Roadmap to 2025 conference call. Our call today is hosted by Pietro Salini, Chief Executive Officer, together with Massimo Ferrari, General Manager Corporate and Finance. 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. Pietro Salini. Please go ahead, sir.
Thank you. Good afternoon, everyone, welcome to our conference call dedicated to Webuild's 2022 results and to the roadmap to 2025. I am Pietro Salini, Chief Executive of the Group, and with me there is Massimo Ferrari, our General Manager. Today is an important day for three reason. We celebrate a decade as a group. We publish our 2022 results, thirdly, we present a roadmap for the next three years. The results and the roadmap to 2025 we are going to show you today come from a very clear strategy we have executed in a 10 years-long journey. We created a group that has become not only a national champion, but a global company, a group providing clients with a solution they need to face today's and tomorrow challenges.
It began with Salini Costruttori taking control of Impregilo in the first shareholder proxy fight in Italy, a business case that has since become a subject of study. In the years that followed, we grew both internally and externally. We acquired Lane in United States. We took over Astaldi, as well as Seli and Cossi as part of Progetto Italia with the support of Italy's financial and public institutions. In the meantime, we completed two capital increases for a cumulative EUR 765 million, and we distributed EUR 930 millions dividend to our shareholder at the same time. We acquired Clough in Australia, which has become our second biggest market. We significantly gained scale. We more than tripled our size since we began the journey, starting with Impregilo. With that EUR 2 billion in annual revenues to arrive today at over EUR 8 billion.
Scale is important in this industry. You can better manage risks and leverage on economies of scale. You can negotiate from a position of strength. You can invest in innovation and health and safety. Our backlog has increased from EUR 17 billion to EUR 53 billion. We also work to improve the quality of the backlog, shifting our focus towards market that are low risk, meaning developed economies with clear rules and political stability. Our backlog is now well-balanced in countries such Italy, Australia, North America, and Europe. Italy is our domestic market and is very important to us. Out of the EUR 16 billion of new orders, Italy accounts only for EUR 1.6 billion. While we went through this journey of change, this past decade has seen us deliver more than 270 strategic infrastructure.
I have said this in the past and will keep saying it. It is thanks to our people that we have achieved so much. 83,000 women and men daily teaming up in over 50 countries. The title of this presentation easily summarizes what we want you to remember at the end. The future, our future, is now, and we have already resources to deliver it. I now leave the floor to Massimo to go into details of the 2022 results. Please, Massimo.
Thank you, Pietro. Good afternoon, everybody. Let's start from slide six. The overall market in 2022 has confirmed its strength. We successfully got more than EUR 16 billion in 2022, exceeding the target. If you combine the orders received in 2021 with those of 2022 and the first months of 2023, we are looking at more than EUR 30 billion of new orders already signed. This is an extraordinary result confirming our ability to offer what clients need. Most of our orders still come from abroad, as Pietro mentioned before. We are talking about 75% of 2022 year-to-date order intake coming from abroad, mainly core, from core Europe, Australia, and North America. North America was responsible for EUR 2.7 billion.
In Australia, we were awarded the contract for the Western Sydney Airport Metro project for a pro quota value of EUR 2.4 billion. In the state of Queensland, we are the preferred bidder for a section of the Inland Rail project for a total value of EUR 2.2 billion, including Clough stake. The financial closing is upcoming. In Italy, we were awarded for EUR 1.7 billion in 2022 worth of contracts for strategic project that will support the economic development of cities and communities. I'm referring mainly to Sicily, where we are heavily involved in the modernization of the railway network. In late 2022, we won a contract for another section of the rail line between Palermo and Catania. We also have the breakwater that will be built for the port of Genoa.
It will allow the port to receive bigger ships. Slide seven shows our results for 2022. Webuild proved a very strong resilience notwithstanding the difficult scenario. As we told in the past, Webuild proved to be anti-cyclical, able to manage price increases for energy and raw materials, thanks to law changes or contractual provisions. At operational level, the group booked a very strong performance, closing the year with both revenues and EBITDA growing by more than 20%. Revenues overcome EUR 8 billion, overperforming the guidance of EUR 7 billion-EUR 7.5 billion of revenues, EBITDA come up at EUR 572 million. In terms of marginality, we achieved our guidance at the low touch point. Let me mention here that this result is affected by the accounting for revenues at zero margin related to the compensation of raw material cost increases.
Without this impact, the marginality would be much higher. EBIT rose more by 63% to reach EUR 321 million. On slide eight, we have the P&L below EBIT line. We booked the net financial income for EUR 180 million, improving by a loss of EUR 56 million in 2021. Financial expenses were at EUR 213 million, an increase of EUR 22 million versus 2021, mainly due to higher bond charges. Tax amounted to EUR 109 million, in line with 2021. On the slide, you can also see a bridge net profit adjusted and reported.
These adjustments refer to accounting non-monetary items such as EUR 53 million for the amortization of the positive bargain we got in 2020 related to the Astaldi acquisition, and EUR 55 million related to the impairment on the works completed in Ukraine in 2016, as we already discussed during our half-year call. On the next slide, the nine, one, we show our balance sheet by the end of the year. We achieved our guidance in terms of net cash, notwithstanding a 22% increase in revenues, better than expectations. We landed with EUR 265 million of net cash position. It is the second year we successfully managed to end the year with a net cash position. We reduced the gross debt by EUR 35 million. We managed to increase our net equity that stands now at EUR 1.9 billion.
Let me just make a last comment on working capital. We successfully managed to keep it negative with an improvement of EUR 560 million versus the first half of the year. This is in line with what we gave as commitment during our last call in July. In slide 10, we show main highlights of our corporate debt. In January 2022, we issued a bond for EUR 400 million. It was our first sustainability-linked bond. The issue let us get ahead of the increase in interest rates. The next relevant maturity will be after mid 2024. 86% of our corporate debt is at fixed rate, and we have limited debt maturities until late 2024.
We want to underline our strong liquidity position. We have around EUR 1.9 billion of cash, of which EUR 565 million held at quarters level, plus more than EUR 900 million of undrawn revolving credit facilities. I will now let Pietro show you how we shaped our business to become the group that we are today.
Thank you. All of this example of our scales shows our Group ability to manage the risks involved in building projects as large and complex as these, and complete them according to the requirements of our clients. We also have become a well-recognized player in the world. We are global leaders in the water sector, and among the top 10 in highways and rails for ENR, the most respected publication in the sector. It is undeniable that we are the 1st Italian contractor, but we are a global player. We are recognized also in the top 10 international players in U.S. and Australia, and we are ranked among the top 10 European players. Our order backlog of EUR 53 billion is large enough to cover nearly all our revenues throughout 2025, including EBITDA and EBIT in this period.
This slide gives us six years of visibility, enabling us to plan in a more structured way how we will deploy our resources. This slide shows also how our successful de-risking strategy has produced a backlog with an 80% exposure to the markets with developed economies. Italy takes the biggest share of 44%, followed by Australia with 13%-14%. Taking on the backlog of the companies that we acquired meant we have to finish projects like the second Panama Canal, kickstart those that had been blocked for years, like the high-speed railway between Verona and Padua and Milano and Genoa, and write off others in Venezuela. When it comes to the use of technology, construction is a sector that has been notoriously slow to change. Not anymore.
We are deploying hundreds of people and investing millions to offer our clients the best solution for the project they need. This slide shows a few examples. Robots that cleans and monitor the bridge we built in Genoa. Ground freezing to enable the excavation of tunnels under a river in the Italian side of the Brenner Base Tunnel. Energy-efficient tunnel boring machine and a remote-controlled robot that operates in tunnels where conditions can be hazardous to humans. Today, winning contract has less to do with the offering the lowest bid. It has more to do with the amount of innovation you offer. That is where we believe we also have a competitive edge. Turning to slide 15, we started with a company of 11,000 workers and become one with more than 83,000, direct and indirect. We have become more multinational and multicultural, representing more than 100 nationality.
With these people came skills, expertise, and experience that make us more competitive. We have made a concerted effort to improve the diversity of our workforce. Today, nearly half of our workers are under the age of 35. The growth of our workforce by 70,000 have been accompanied by initiatives that are undertaken like recruitment drives, training programs, scholarship, and university courses. We have even set up an internal trade school in Italy. The average number of hours we provide for training is 400,000 a year. Let us now have a look at the market where we operate, starting from slide 17. In the last few years, we have seen a paradigm shift into the sector. All stakeholders, including clients, contractors, and suppliers, are becoming more and more aligned for one goal: to deliver the projects that are needed for the well-being of communities.
Many mega trends are affecting the choice of governments, by extension, our clients. These are trends that cannot be ignored, from climate change to the scarcity of essential resources, especially water. All stakeholders realize it is better to work together rather than against each other to face these needs. Nothing gets accomplished otherwise. We are witnessing a more collaborative environment to get projects done on time, safely and sustainably. Clients prefer more and more to share the risk of construction instead of challenging the contractor on each penny paid. Our construction of the Genoa Bridge set the tone in Italy, so much that the collaborative model that came out of it, known as the Genoa Model, is now being applied on other projects in the country. We are experiencing the same in Australia with an increasing number of share pain-gain contracts, alliance contracts.
Turning on slide 18, we show you how the size of our core market. We can start by looking at Europe. Between 2023 and 2024, Italy will continue to grow, driven by the recovery plan funded mainly by the next generation, with infrastructure market value accounting to more than EUR 113 billion. In Northern Europe, including U.S., U.K. and Nordics, spending is seen accelerating for the next years. North America and Australia will remain promising market. On this last market, I will go more in detail later. On slide 19, we show our own market, Italy. Our consolidation of the construction sector under Progetto Italia allowed us to create a group big enough to help the timely development of the projects under the National Recovery and Resilience Plan, with the best standard of health and safety and innovation.
The plan provided up of now 80% of funds to finance project that were already in execution. We are working on many of them. Around EUR 9 billion of our backlog in Italy is related to projects included in the PNRR. We are obviously not developing them alone. We are joined by around 10,000 businesses in the supply chain. We expect more than EUR 13 billion worth of projects included in PNRR going to tender in the next two years. The Italian construction sector is much higher than the one we address. We cover only 1%, 1.5% of the overall sector. On the bottom left of the slide, you can see an important detail. Before Progetto Italia, we had 37% of our backlog in Italy, but only 10% of the revenues came from out from the country.
Important contract strategic for the country were blocked and were not producing much revenue. The Milan, Genoa, and Verona-Padua high-speed railway, to name but two. The last aspect I want to emphasize here is how it is changing in terms of criteria selection for tenders. As I mentioned before, price is no longer the main factor considered. The technical aspect of a bid have become much more important. 80% of the offer is based on it. The competition among bidders for a contract has more to do with expertise, experience, innovation, and sustainability. Turning to slide 20, we want to give you a deep dive on our second biggest market, Australia. We have currently in the country EUR 12 billion of backlog, including a project for which the group has been recognized as best bidder, including backlog that comes out from Clough.
Most of these projects are strategic infrastructure for the country. Strong growth in major project investment is expected to continue over the next two years, with the infrastructure market value estimated at EUR 135 billion in 2023 and 2024. Public sector backed mega-projects, largely roads and rail, will be a key driver in the near terms, while major hospital investment is also rising rapidly. With Clough, you see an acquisition of EUR 23 million. For us, it is an acquisition of more than EUR 4 billion of backlog and more than 1,000 people who have experience and expertise we can leverage. Clough will be our platform in the Australian market. Clough will also allow us to explore promising segment on the energy sector.
Changing government policy is likely to boost electricity pipeline, supporting investment in major renewable energy, transmissions, and storage project. There is also the urea and ammonia market. These chemical product are important not only for fertilizer, but they could potentially be used as fuel. Green ammonia, for instance, could be used for green fuel production, thanks to the use of renewable resources. Just a reminder, Clough is not included in the 2022 results, since the process of acquisition has been completed in the first month of 2023. Slide 21 shows some additional potential markets where we see great margin of opportunity. The water market is forecast to expand rapidly due to the population growth and water scarcity. We are beginning to see it in Italy. In March, we have already warning about dried rivers and water basins.
Our subsidiary, Fisia Italimpianti, specialize in the construction of water treatment and desalination plant. It has been responsible for some of the biggest project in the Middle East. We want to bring that expertise to new markets. The last two sector where we see strong potential growth are data center and hospitals. Our subsidiaries, CSC in Switzerland and NBI in Italy, have strong competencies in these markets and could face a market of more than EUR 40 billion in the next two years. Let's turn to slide 22. As you can see, by 2025, we'll be a group with EUR 57 billion of backlog distributed for over 85% in low-risk countries. More than EUR 10 billion of revenues, with growth at an annual rate of 10%.
EUR 1 billion of EBITDA with improved marginality, leveraging the efficiency plan and the recently acquired high quality projects. A net cash position. In the next three years, we aim to generate cash and further deleverage in a range of EUR 200 million-EUR 250 million, distribute to our shareholders EUR 160 million-EUR 170 million of dividend in the three-year period. How can we achieve it? It's all in our hands. I described before, in this long journey, we have structured our company as a global company, with the organization, people, and know-how, order backlog necessary for what is ahead of us.
Last thing I want to point out is that these target do not include the potential upside coming from the great strategic projects such as the Texas High-Speed Railway, for which discussions are ongoing for the financial closure, and the Messina Bridge, which has returned to the news these days. Massimo will go now into further details of our strategy.
Thank you, Pietro. Let us discuss the first drivers of our roadmap to 2025 business evolution on page 23. One, leveraging our high quality EUR 53 billion backlog, which cover 100% of our revenues and EBITDA targets for 2023, and 90% of 2025 forecasts, making us confident in achieving our expectations. Two, addressing specific challenges faced by clients, reinforcing our position to be a strategic partner for clients to support them in climate and energy transition. We are leaders in sustainable mobility, building metro lines and high speed railways throughout the world as part of this shift towards more public transport. We are leader also in the construction of hydropower projects, which of course produce clean, renewable energy. With the acquisition of Clough, we are expanding our offer transmission lines and renewable energy sources, as Pietro said earlier. Resilient agriculture is a new area for us.
It comes with our acquisition of Clough. One of the projects for which our new subsidiary is a preferred bidder is an urea plant that will produce fertilizer, a product much in demand following supply disruptions caused by the war in Ukraine. Three, enhance our presence in core market, mainly in Australia, core Europe, and of course, in our domestic market, Italy. Four, valorization of some company of the group in order to seize new market opportunities also through the reorganization. Water scarcity, as described by Pietro, is a growing issue because of climate change. We are proposing our subsidiary, Fisia Italimpianti, that is a world leader in the desalination industry, to help countries face these scarcities.
There will be what we call Webuild Concessions, bringing together all our concessions into one subsidiary to make it easier to create partnerships with investors for the development of greenfield projects. We will also be looking at divesting some of this asset. The two companies we recently acquired, the Seli Overseas and Cossi Costruzioni, currently active in the construction of the main T, Trans-European corridors, will come under a single business unit called Webuild Tunnelling & Maintenance, in order to develop a single offer ranging from tunneling to road maintenance. Webuild Real Estate, Webuild a new vehicle for development and enhancement of the group's real estate assets and capabilities. Last but not least, as described by Pietro before, we will leverage the competencies and capability of NBI and CSC to address the growing demand of sustainable building.
On slide 25, we have the second driver of our roadmap to 2025, operating efficiency and cash generation. After successfully saving EUR 60 million in costs since 2020, reducing overhead incidence to 3.6% in 2022 versus 2021, we aim to save even more in the next three years, thanks to the larger scale. At corporate and project level, we target further EUR 180 million cumulated savings in 2023-2025 period. At corporate level, we are optimizing activity at our branch offices and subsidiaries, as well as looking at extracting synergies from our recent acquisition in Australia. An important part of saving will come from specific initiatives we have identified for some of our project. Finally, a part of cost saving will come from what we call back office automation. With the use of the latest technology, we can automate more of our back office operations.
We also have elaborated a plan of savings on capital expenditures with the reutilization of assets such as machinery from one construction site to another, and the optimization of contracts that we have with suppliers. We expect to be able to reduce CapEx plan in 2023-2025 period by EUR 50 million. Cost and CapEx efficiency plan will allow us to improve our 2025 margins by around 100 basis points within 2025. These levers, together with continuous and rigorous project management, an improvement of payment cycle, and the monetization of some slow moving assets, extracting cash from working capital, will allow the group to improve its cash generation and financial structure. On slide 26, we have the third and the last driver, investment in safety and environment. I cannot emphasize enough the importance of innovation. It permeates our entire operation and produce benefits throughout it.
I just mentioned automation to help us to reduce costs like in back office. Out in the field, it helps improve the safety of our workers, a top priority, the top priority at our company. We have had great success in lowering the lost time injury frequency rate in the last five years. It has gone down more than 40% to 2.79, beating our target. This is the result also of nearly 3 million hours of training in safety in the last four years. We now aim to reduce it by a further 9% to be reached in 2025. Innovation also plays such an important role in making projects more sustainable that it has become a major feature in making our bids more competitive for future projects and to achieve our reduction targets of CO2 emissions. We have two targets here.
By 2025, we aim to reduce 50% in carbon intensity emissions with respect to 2017. This is the target linked to the sustainability bond issued in 2022. In 2022, we also obtained the approval from Science Based Targets initiative for our 2030 CO2 emissions reduction in absolute terms. We aim to reduce them by nearly 500,000 tons. All three of these drivers will let us reach the financial targets you can see in slide 25. As already anticipated by Pietro, we expect our average book-to-bill to increase more than 1.1 times. As described earlier, we will continue to focus on low risk markets, and this will bring our landing backlog in 2025, coming for more than 85% from those countries for around EUR 50 billion. It will be the remaining backlog at the end of the business plan.
Revenues to reach EUR 9.95 billion in 2023, finally EUR 10.5-11 billion by the end of the period for the business plan. Looking at geographies, 80% of cumulative revenues will come from our key market, such as Italy, Australia, U.S., and so on. EBITDA would stand to widen to more than EUR 700 million in 2023, and near EUR 1 billion in 2025. We aim to maintain our net cash positive position while reducing gross debt for EUR 200-250 million by 2025, paying our shareholders EUR 160-170 million of dividends. I thank you for your attention. We are now ready to take your questions.
As not to slow things down too much during the call, the investor relation team and myself, after the call, we are ready to answer to any specific questions you might have on one figures or another or some technical detail mentioned in the presentation. Thank you very much.
This is the 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 touch-tone telephone. To remove yourself from the question queue, please press star and two. We kindly ask to use handsets when asking questions. Anyone who has a question may press star and one at this time. We will pause two minutes as callers join the queue. The first question is from Matteo Bonizzoni of Kepler Cheuvreux. Please go ahead.
Yes, thank you very much. We will have two questions. The first one relates to the evolution of the margin from 2022 to 2025. In your target there is a margin increase, improvement of more than 2 percentage points from 7% EBITDA margin in 2022.
Sorry, Matteo, we cannot hear well. Can you change something?
Yeah, can you hear better now?
I understood something on the margin, on the evolution.
Can you hear better now?
Yes, much better.
Basically, the first question relates to the margin evolution in your target. You are planning to improve your margin from 7% in 2022 to more than 9% in 2025. You have said that 100 basis points will come from operational efficiency, mostly overheads. Can you please elaborate on your assumption for the remaining driver of the profitability, particularly regards the cost base for raw material and the pricing of the contract which is embedded in your in your backlog.
The second question is as regards the impact of Clough, because this 2% Clough improvement of the margin from 7% to more than 9% comes despite the fact that, if I remember correctly, in your February call dedicated to Clough is supposed to post a margin which should be somewhat below average between 6% and 7%. The question is, can you confirm that Clough should contribute around EUR 600 million of revenues in 2023, up to around EUR 1 billion in 2025? Number one. Can you confirm the margin of Clough around 6% and 7%? I was curious to understand better what kind of contractual renegotiation you have done as regards the Clough backlog compared to the previous situation.
You said in the February call that you are pretty confident to generate this level of margin, thanks also to the fact that you have secured a sort of contractual renegotiation on some jobs, which were previously maybe problematic and now maybe not anymore. Can you elaborate on this topic? Thanks.
Thank you, Matteo. Let me start from the last one, question regarding Clough. First of all, we put in the business plan the plan approved by the commissioners, by the public administrators, without any synergies, just putting the new contracts that the administrators renegotiated, you are right, with the clients. All the contracts are now cost-plus, while they were before lump sum. We have a pretty sure picture for the coming year without including any synergies, and improving that Clough can have from the new order and the commercial activity that we will push in the coming year. It's right also the contribution in terms of revenue for 2023, it will be around EUR 1 billion equivalent, coming from Clough.
An additional information, the net backlog added by Clough to the Webuild Group, it will be EUR 3 billion. If you consider the works that we are performing together, it is now EUR 4 billion, but the additional one net, it will be EUR 3 billion. Regarding the trend of the improving marginality, it will come from operational efficiency, as mentioned before, both from the overhead incidents that will go decreasing, lower probably than 3.6% of revenues. That is our actual average, thanks to the improvement of the action that we already launched and we will launch in the coming weeks. There will be also an efficiency coming from the indirect cost program. Totally, we expect 1% of EBITDA margin coming from efficiency.
Another contribution to the path of the improving marginality come from the new orders acquired in the past two years that are with an EBIT margin expected higher than the average that we put usually in the business plan. Regarding the cost, the increase of raw materials, we got in 21 and 22 after accounting check that we made in the past few weeks for the accounting closure, closing of figures, we got a neutral effect at portfolio level, so we can say that we have been able to pass through any effect in terms of increase of raw materials and other costs. This thanks to, new laws, managing the contract with the clients, adjusting with them, all the issues and fix them.
Thank you.
Thank you, Matteo.
The next question is from Emanuele Gallazzi of Equita. Please go ahead.
Yes. Good afternoon, everybody. I have three questions. The first one is just a clarification. Massimo, you said EUR 1 million of revenues from Clough in 2023 or 2025?
23, EUR 1 million.
Okay. Then, on the net financial position, if you can just clarify the dynamics that you expect, which are the main moving parts, and on the net working capital are you expecting to?
Sorry.
Yeah.
Let me correct. We expect EUR 600 million of revenues in 2023.
Okay.
Including the contract that you we already have. This is the confusion. We already consolidate, fully consolidated this contract. EUR 600 million plus coming from Clough in 2023.
Okay.
Thank you. Sorry.
Yeah. The first question was on the net financial position. If you can help us understanding the dynamics of the net financial position, which are the main moving parts? On the net working capital, if you are expecting to maintain a negative net working capital in the period. The last one is on CapEx, considering the EUR 50 million CapEx saving, you announced, basically, can you provide a guidance on CapEx for upcoming years?
Let's start from CapEx. We can give you just the average of around EUR 350 million per year in the period 2023-2025. This includes efficiency that we already mentioned, and the different timing of investments and development of production from this different project around the world.
All right.
Regarding the working capital, of course, we expect to provide cash during the business plan period, both from working progress and from, in general, from client fronting. We can manage better having achieved this size, the relationship with the client as we made in the past two years, but we can extract more cash on average during the period, also in order to reduce the interest charges.
Okay. Thank you very much.
The next question is from Enrico Coco of Intermonte. Please go ahead.
Good afternoon. My question was on the contribution from Clough and was already answered. I have another one on the EBITDA margin. You said that 1 percentage point of improvement will come from efficiencies, then you will have also an improvement because the contract you took in the past two years-
Right
...had a better profitability. My question is, you refer to contracts in Italy, from the PNRR and it would be the same also for coming years. The contract from PNRR that you will take in the coming years has a better profitability than the average of the mid-group now. Thank you.
Yes. We can say that on average on the portfolio. We can split on geography on segment, because it depends from different condition, different timing, different kind of risk and complexity. On average, we expect to have an higher marginality from the new orders that will give a very little contribution to the plan. Of course, it will be very important for the remaining part of the future for our colleagues that will drive the company in the next future.
Okay. Thank you. If I may, I have another one, again.
Sure
on profitability and referring the Snowy project. You said that, now your contract in Australia are on a cost-plus basis. Also the Snowy contract is included in this. Is it right?
No.
The snow now is on the cost-plus.
We just mentioned the Clough contracts, where Clough is leader, and the contracts that we acquired through the acquisition of Clough. The other contracts that Webuild already managed in Australia are completely different, and there are some lump sum, some other type of contracts.
Okay. Thank you.
What probably is worth to underline is the different attitude around the world to manage contract in order to realize and to get the infrastructure delivered by the client, because this is the expectation of the public clients that we have. This is the expectation coming from the PNRR in Italy. There is what we call the paradigm shift, because both the customers and us are in the same table, in the same part of the table in order to get the infrastructure delivered in the time planned.
The next question is from Alessandro Tortora of Mediobanca. Please go ahead.
Yes. Sorry. Good evening to everybody. I have three, four question, if I may. The first one, it's just a follow-up on what you mentioned before on the moving parts for the, let's say, cash generation. If understood well, let's say on the working capital side, you still see, let's say, the networking capital in negative territory, let's say, moving to 2025, or if, let's say, more neutral, okay, compared to the recent past, you know, when we also saw, let's say, very favorable, let's say, you know, advances coming also from Italy. This is, let's say, the first follow-up I would like to understand. I don't know if you want to go one by one, Massimo.
Sorry, I didn't hear the second part. The first one regarding the working capital, I confirm we expect a negative working capital as a stock in order to release cash-
Mm-hmm.
during the business plan and at the end of the business plan for 2025.
Okay, good. Okay. The second question was related, let's say, to Clough. I understood, let's say now the contribution you're projecting on Clough for in the coming three years. Can you help us also to understand, let's say, the EBIT margin level of, let's say, the acquired company? The third question is related to the program you mentioned the presentation on asset rotation, real estate, concession and so on. Are these initiatives included in, let's say, your assumption for maintaining the net cash in 2025? The, let's say, fourth question are a very, let's say, simple check for the Italy modeling. The level of, let's say, D&A, considering that you mentioned, let's say, the around on average EUR 350 million CapEx for you.
The level of D&A you see for the group, including now Clough, the level of financial charges for 2023, and also if you can help us to understand also the tax rate level for the group now including Clough. Thanks?
Before Massimo answers, I would like to make some color on the acquisition of Clough and what Clough means for us. As you see, we spent around EUR 23 million for the acquisition of Clough. What we got? We got a company without debt, which has more than EUR 3 billion of contracts which are accretive on us, not included in our consolidation. We got more than 1,200 people of very high competence level and very skillful people, which are needed not only to make the works of Clough, but also us using Clough as a platform. Will help us speed up and conclude our business, the one that we are doing there for the other clients. All their contracts we renegotiate and renegotiate together with the administrators are cost-plus.
Mm-hmm.
or, cash positive. I think that this is something that is important because of course, do not take into account, for instance, the fact that Clough is one of the very, very few company in Australia which can deal with the defense program that Clough that the government of Australia is now bringing over for the cooperation with the U.S. government. Not only the government of Australia will of course strengthen all the defense in the Pacific area, but there are very few players in Australia that are able to deal with the difficulties and the qualification to work with the defense. We are working with the defense, for instance, in Papua New Guinea. This is something that is very important to us. I spoke to the Minister of Defense.
The Defense Minister has an enormous program for in the next coming couple of years to do this. This means that the Clough platform will change the. It is a game changer, you know. It's not only a EUR 23 million acquisition, it is something different. Now, Massimo, go on with the details.
Regarding the tax rate, we put the 39% tax rate as we had in the past few years on average. Regarding the net financial charges, excluding Forex, of course, because we are not managing, we are not able to manage Forex for this line of the balance sheet, of the P&L. We are estimated around a range between EUR 160 million to EUR 110 million in the period 2023, 2025. Regarding D&A, Amarilla will provide you further details. Regarding the marginality provided by Clough, having assumed the one put in the business plan by the administrator, we have an EBITDA margin in a range between 7%-7.5% in the business plan period without synergies, efficiency and so on.
Okay, Massimo, sorry, just to come back to one point, and then the last point on the, you know, on the asset location and all the other initiatives you mentioned in your presentation. When you said, sorry, net financial charges or only financial charges when you mentioned the EUR 160 million-EUR 100 million on average let's say per year?
Only financial charges. No, no.
Financial charges.
Yeah.
Okay. Okay.
Gentlemen, I hand you back over to Mr. Salini and Mr. Ferrari for any closing remarks.
No, no, other thing to add. Thank you very much for attending this conference call, and all the best to all of you. Thank you for attending it. That's it.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.