Prysmian Capital Markets Day 2025

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Prysmian. Dear guests, welcome to Prysmian's Capital Markets Day and allow us to introduce on stage our CEO, Massimo Battaini.

Good morning to everyone and welcome. I see many familiar faces that were in Naples last time but also many new ones. Thank you for joining us, thank you for being here with us today. Thanks also to those who are connected remotely, thanks to our board members that have joined us today with this important event, also thanks to all our employees that are connected from remote. My colleagues, without them I would not be here today. It's only thanks to their continuous effort that we performed what we did in the last few years and we will continue performing. I'm very excited to be here today. It is really a special day. You know why? It is my second Capital Markets Day, first of all. Secondly, we made an important announcement of a new acquisition last night. And thirdly, we are here in the US where I used to serve as CEO of North America a few years ago after the General Cable deal. I had great memories of that time, even if during a moment I had to spend eight months in lockdown in my home in Cincinnati by myself while my family was in a different place in Italy. So a challenging moment. It was also challenging. I remember when we started integration of General Cable, I had a big question back then. I thought, how to effectively engage the people of the two different companies, how to make them work as one single team. So I thought to engage them with an inspiring vision. I organized the town hall, I gathered all people, and I told them we have a goal, we have a vision. We want to turn North America into the largest and most profitable region inside the Prysmian Group. It is not going to be easy, but if you work together with a proper spirit, passion, and innovative approach, we will make this happen. And we did. A few years later, North America accounted for 40% of the revenue of the group and 50% to the EBIT of the group. So my vision became reality, and that's why this place means a lot to me.

So why are we here today? Why did we gather you again after only one and a half years from last time, from our last Capital Markets Day? I think you know the answer, obviously. It is because in 2024 we beat the goal of 2027. For those who were not there last time, we set the goal of 2 billion EBITDA in 2027. It was a very ambitious goal because we were coming from 1.5 billion EBITDA in 2022, a few years before. But we were confident to be able to achieve it in 2027, in four years. But we didn't make you wait four years. We did it in just one. In 2024 we reported 2.1 billion EBITDA pro forma. So how has this happened? How could we deliver the target of 2027 three years in advance? It is because this is a new Prysmian, this is our new leadership style. We are agile, dynamic, innovative in the way we move in the market, in the way we seize the opportunities for growth, in the way we drive our market leadership.

You always appreciate Prysmian for delivering a consistent and superior performance over our history, but you will notice that the last two years have been different. We are in a new mode, we are in accelerating mode. If you look at EBITDA in 2022, it has increased by 7%. We committed at the last Capital Markets Day to deliver a 6% increase from 2022 to 2027. We actually delivered 20% in the last two years. So what is the reason behind this acceleration? Threefold: strong market demand, strong market demand across all business segments, especially strong in transmission and power grid. Our consistent enhancement of profitability due to our revived focus on innovation, on solutions, on expansion of our business portfolio due to our M&A agility, proven by two large M&As in less than 12 months. And we will continue with this acceleration in the coming years as we capitalize on our leadership and our strengths in order to deliver both organic growth and inorganic growth.

Yes, we will keep pursuing growth in every sense. Talking about growth, think of what we were 17 years ago. We were just one of the main cable players. There are few like us with similar size. You see Prysmian, you don't see the others. There are names but I think you can figure them out. So where are we today? We are three times the size of the first direct competitor. Also here you can guess who is the competitor. Number two and number three do not exist any longer, we merged them, and competitor number four has remained a tiny one. So we significantly expanded our company, we significantly transformed our company from one of the cable makers into an undisputed global leader. An undisputed global leader that has distinctive assets, capabilities, the global footprint, the unparalleled portfolio, the large customer base, and the innovation power that is impossible to match. Thanks to these asset capabilities we can provide a unique strength, growth combined with resilience.

Let me tell you what growth combined with resilience means. Back in January this year, we were all done, all set with the Capital Markets Day preparation. The targets for 2028 were defined and the equity story was ready to go. Then we noticed some dynamics in the North American market. We saw some softening in price in the industrial construction space. We shared this with you at our last earnings calls, we disappointed you, the market panicked, and we lost 12 percentage points of stock price in one single day. Fortunately, we didn't panic. We reflected a more moderate growth of the ISC business in our four-year plan. We leveraged, we embedded a stronger growth in transmission thanks to the solid backlog. We ended up with the same EBITDA as before, but with a different contribution, or different business elements, a high quality mix of contribution. So this is the beauty of this company, this is our strength. We enjoy and we rely on a multi-business portfolio, on a multi-geography footprint, and often these geographies, these businesses don't move in sync. In fact, they never move in the same direction, one goes up and one goes down. But what matters is that the bottom line of the company always grows. Take for example the last four years, 2021-2024. We experienced all sorts of negative, adverse impact from the market. We had the raw material shortage, inflation, soaring energy cost, pricing normalization in ISC, the stocking in digital solution in telecom in North America. Have you seen any impact to our EBITDA? Obviously not. Our EBITDA has grown unabated from 1 billion in 2021, I think you can tell the number, to 1.7 billion in 2024, excluding Encore Wire. So this is what growth with resilience means. It is not a slogan for us, it's a real history, it's our track record of performance, it is our DNA, it is our ultimate value. And if this is also your value, this is the company you should invest in. And you should invest in the company in a way, the stock price is very attractive these days.

So how did we create this combination of growth with resilience? It has been a long, deep, and successful transformation of this company over the last 17 years. Back then we were a European-centric player. We are no longer a European-centric player. We are a global leader. We are a global leader with a dominant position in fast-growing markets like the US, where we had 10% EBITDA then, and now we can count on 50% EBITDA. Over this period we also significantly transformed this company. We shifted it from a cable manufacturer, from a cable manufacturer player, into a world-class solution provider leader. So we do play in a different league. We play in the more rewarding and profitable innovative electrification and digital solution space.

You notice that alongside the growth in EBITDA and in revenue over the last periods, we also drove significant value creation. We were 3 billion market cap in 2007, we ended up with 9 billion in the last Capital Markets Day one and a half years ago, we now sit on 18 billion market cap. And by the way, a few weeks ago we hit 21 billion before we disappointed the market. So clearly a story of great value creation, a story of value creation that also shows an acceleration of the last 12 months. The TSR grew 470% from our IPO, but it has grown 75% from our last Capital Markets Day. And by the way, those of you who invested in us, who bet on us last time, well done, you clearly made a good choice. So I speak as CEO of the company, but I am also a shareholder of this company. And as shareholders, I'm particularly proud, extremely proud, to lead a company where 50% of the employees are also shareholders, including the shop floor workers. And as shareholders, we will continue creating value for this body as we capitalize on organic growth, on the M&A opportunities, on the strengths, on the tenacity of a company that has great ambition on the one hand but also solid foundation on the other hand. And I'm not referring to the plants or the equipment here, I'm referring to the invaluable know-how gained through our inclusive M&As.

We will also capitalize on the strong drivers from the market that we've seen over the last four years. It's bringing new life to the cable industry. Take for example the electricity generation. It is today based on 30% renewable sources and 70% fossil fuel. Tomorrow this will shift from 30-70 to 70-30. Tomorrow is 2050. The electricity demand is surging with a factor of two and a half times. The power grid, in order to cope with the additional demand, electricity is going to double in size. And the digital transformation is further fueled by data booming and AI expansion, data center expansion. We designed our organization with four business units which exactly match the four drivers of the market. We are the only one that could do so. We are the only one with the luxury of a portfolio so large and comprehensive that covers the entire demand from the market. Unprecedented, unique.

Have a look at this video to show how we play in the different segments of the energy and digital transformation.

From when the sun rises, we are the one-stop shop with our synergistic portfolio. We are building the future from high voltage transmission solutions to the power grid electrification and digital solutions. With undisputed technological leadership, such as complete transmission solutions boosting operating efficiency and cost-saving, unleashing new service standards and boosting connectivity in the digital world. We are maximizing innovation and sustainability to drive growth, and we've been investing to meet demand, increasing our capacity and making the largest acquisition in our history so we can bring the new products and solutions with the highest quality, efficiency, and lowest environmental impact that is helping to connect and decarbonize our planet until long after the sun sets.

So we already beat the target of 2027 in 2024. We are now a solution provider, we play in the electrification and digital solution space. We want to inspire you with a new vision, with a new ambition. Obviously you already read the numbers, but let me play the story. From 2 billion EBITDA in 2027 as per our last Capital Markets Day to 3 billion EBITDA in 2028. Imagine 1 billion more in one year. Our EBITDA will grow to 3 billion 50 million. Our free cash flow to 1.6 billion. The EPS will increase by 15-19%. And the share of revenues that are considered solutions in our footprint will move from 28% in 2024 to 55% in 2028. These are great targets, very ambitious targets. But as ambitious as they are, I'm sure that you will challenge them with your consensus. You will stretch us with your consensus as you did one year ago. We acquired Encore Wire, it was our target for 2027 was to build. We added a 600 million EBITDA business with synergies included. We were at 2.6, you took the 2.6 as a start, you ran it up to 2.7. Where did this 100 million come from? You know how difficult it is to deliver 100 million EBITDA in this company. So this time, unfortunately, we came with an ambitious number, 3.050, but I know we have a problem. It is not a round number. And I assume that you would not round this down to 3 billion, that was our original idea, and you would probably round it up. But 3.1 doesn't make any sense, and you probably want to round it up to 4 billion. Please, not yet, we are not ready for that. One day we will be there. And also this time is different from last time. To prevent you from thinking that we set goals and then we beat them with the M&A as we did last year with Encore, this time we embedded the M&A upfront. The 3.050 includes the M&A, the Encore acquisition obviously.

So how are we going to grow to 3 billion 50? We are going to grow organically to 2.9 billion. The next bit to 3.50 is 150 million euros coming from Encore acquisition including synergies. So how are the different business units going to contribute to the 3 billion 50 million? This plan hinges on a strong, remarkable growth in transmission which is totally in hand, supported by a strong backlog, a high quality backlog of 16 billion euros. Why did I call it high quality? High quality is our backlog because it's reliable, it is large, it's secure, it is ready. Reliable because it consists of projects located in Europe with transmission system operators which are reliable customers. We don't have any fancy projects belonging to financial developers in our backlog that most of the time are either delayed, postponed, or cancelled. Large, our backlog, because it's large enough to cover all the revenue through 2028. We don't have any speculative business in our plan as far as transmission is concerned. It is secured because it's based on notice to proceed and down payment. It is ready, guys, it is ready because we have the capacity expansion ongoing. As far as the other business segments are concerned, power grid, electrification, and digital solutions, while they still benefit from stronger drivers from the market, from solid drivers from the market, in light of the lower visibility and the shorter backlog that is specific to these businesses, we planned a more moderate growth in our career plan. So the plan is solid, backed by transmission growth. But should the drivers of the market in the other three segments further strengthen, we might see some upside. Not enough to bring the EBITDA to close the gap to 4 billion probably, but we might see some upside.

So let's deep dive on each single business. Transmission first. You see the market here has surged from a 3 billion market level in the last decade to 13 billion in the last four years, 2021-2024. And the market continues to remain strong. So strong that we recently decided to unlock additional capacity for submarine and land capacity increase in Europe, not in the USA where we don't steal the market growing, but in Europe, in order for us to remain market leader with a 35-40% historical market share. So why are we market leader in this space? What is it that makes us unique in transmission? First of all, we master a full vertical integration in this space. We are the only player that is able to install all the cables that we produce with our eight vessels without resorting to third-party installers, which is crucial because we have the best control of the margin, the cost, the timing, and the quality of execution thanks to the comprehensive installation activity. Secondly, we offer the market a unique inspection, maintenance, and repair solution to fix network damages either from internal failure or external damages. You know why it is unique? Because most of the time everybody repairs asset, repairs network, but the assets are normally busy with our project. So this solution is unique because we have a vessel, a crew, jointest installation engineers in standby, ready to intervene, to be mobilized and fix the network. And thanks to this solution we can shorten, I would say, half the time to repair from the usual 14 weeks that takes today with conventional solutions to less than six weeks. Think of the benefits for TSOs in terms of reduction of the revenue losses they incur when there is an outage in the line. And this solution becomes also particularly strategic these days that cables have become targeted to geopolitical conflicts.

But what truly distinguishes us from the others is our technological leadership, something that we pursue with determination, with passion, with obsession, with innovations in three dimensions. In cable, in installation, and in sensing. Cables, we keep developing a system that can transmit more power so the cost per megawatt transmitted is lower and this makes the energy transition financially more sustainable. Installation, we keep enhancing our capabilities like the 3,000 meter water depth installation. It's unique, we are the only one to have it. Thanks to it we can open the market to new connections, new routes like that between North Africa and Italy and Europe. Sensing, we offer cables with integrated sensors that can maximize the flow of energy in the cable and allow a fast detection of the cable fault. So we are not market leader by chance. Technological leadership is key, it is crucial to maintain and grow our market leadership. We will pursue it forever, in every sense.

Please watch this video to have a sense of how innovative our solutions are.

At Prysmian, we are connecting our planet. We are driving the progress of new forms of energy, meeting growing demand with the best solutions in a rapidly evolving world. We are guaranteeing energy security, helping to reduce the cost of the energy transition while protecting future generations. These are the projects at the forefront of technology, innovation, and human achievement that are making our planet safer and our society more prosperous and greener. We are the undisputed leaders with a portfolio spanning 60 major projects in 25 countries. Our extensive reach and proven track record mean that no challenge is too great. From the largest advanced marine vessel fleet on the planet to the most sophisticated tools and the deepest expertise in the industry, our innovation is unrivaled. We are always available, monitoring 24/7, to ensure that these investments are in safe hands and that no challenge is too great. From land to sea, Prysmian is pushing the boundaries of what can be achieved. From the longest ever interconnector world record cable installation to the highest voltage and most efficient transmission systems. And we're not going to stop. And at the same time we are thinking about the impact we have on our planet to keep what we love safe, because these projects are our shared legacy, our investment in tomorrow. And we're accelerating because tomorrow is coming today.

So how will we grow from the result of last year, 361 million, to the new targets? We will grow capitalizing on the capacity expansion, on the better margins of the project in our backlog, with a CAGR of 25-28%. I heard that some of you were surprised this morning when you read the press release. Is it real? Yes, it is. We mean it. I'm not giving you the number of 2028, but I give you a hint. The chart is exactly to scale. You can measure the height of the bar, you figure out down to the last million. It will be an impressive number.

Let me move to the second segment.

Great. Power grid segment.

Power grid segment is made of three subsegments. High voltage, you see, power distribution, so medium voltage and low voltage cable to expand the grid, overhead lines, and then we offer all sort of sensors applicable to all these segments of business to monitor the network. The grid is huge today. The grids account for 80 million kilometers of cables. But the demand of electricity is so strong in the next 25 years that this grid will double in size, from 80 million to 160 million kilometers. So 80 million more kilometers going to be deployed in the next 25 years to allow the flow of renewable energy and to satisfy the users' demand of additional electricity. Yeah, we did super well. I would say we already beat in 2024 the target that we set for 2027. 474 million last year, target 410. But more remarkably, we grew the EBITDA margin from a not exciting, I agree, 5%, but only two years ago, into 13% now. Is it sustainable? Obviously this is your most asked question. The answer a month ago was yes, in the range of 12-13%, and I confirm it. In the range of 12-13% this will be our margin in power grid for the next future. Then it depends on the mix of geographies and the different imbalance between capacity and demand. But the demand as I told you before is super strong. We are the only global leader in the space. We are unique because we are the only one with a large footprint. We have at least 40 factories in the world that make power grid cables, located close to every customer. So we have a large footprint, we have very close proximity to all utilities, and then we have this unique exposure to the medium voltage, low voltage power grid space of the United States. So we are also unique because we drive innovation and sustainability through the whole value chain of this business, from supplier to customers, and we provide our customers with unique solutions, unique sustainable solutions that help customers achieve their sustainability goals. We work in this regard in two dimensions: scope three and scope four. Scope three are the reduction of the emissions of cables during the cable operations. It's an important KPI for our customers to underpin their goals. We deliver cables that have energy losses reduction, thanks to sensors, that are made of recycled material, copper, aluminum, polymers. But the most innovative piece is the scope four. This is the new frontier. It is about no reduction of emission, it is about avoidance, avoidance of CO2 emissions. Here we offer a solution that our head of innovation, Sarini, will tell you more about in a moment. It is called E3X. It is a special coating applied to existing overhead lines whereby the power that the line can transmit is enhanced by 25-30%. In this case, the reconductoring of the line is avoided, the expensive investment to reconductor the line, so to replace the conductor with a new more powerful conductor, is not required, and the emissions are not emitted.

So why is sustainability so important in this business? It's important because for us it is a competitive advantage. A couple of weeks ago we participated in two tenders in HVAC space in Northern Europe. We were not the cheapest in price, but we scored high in sustainability. Now sustainability criteria are everywhere in the tenders, in transmission, in grid, everywhere. And we won the projects. So differentiation, sustainability, innovation is key to drive our growth.

Let me move to the electrification segment. The INC business is one of the segments. Industrial construction specialties is the second subsegment in INC. We deliver low voltage, medium voltage cable to electrify buildings. Electrify buildings means to connect buildings to the power grid. This is a business where we connect residential, but more importantly for us, non-residential buildings: industrial factories, plants, commercial centers, airports, all that stuff. Specialty is about the electrification of equipment: automotive, solar park, crane, mining, defense, marine. This market is undergoing a significant transformation because of the electricity demand that I mentioned to you. The electricity demand is going to surge. Today it is 20% of the total energy demand worldwide. In 2050, electricity will be representing 45% of the energy mix. And this is for twofold reasons. There are fossil fuel-based applications like gas heating that are going to be replaced by electricity-based applications, heat pumps. And there are already existing electricity-based applications that are further expanding, like data centers. Here in the US, data centers already consume today 6% of the total demand of electricity. This number tomorrow, in 2030, will surge to 14%. How did we do here? We beat also in this space, we beat the 2027 target in 2024 organically, but more importantly, of course, thanks to the acquisition of Encore Wire. Why are we unique in this space? We are unique because also here we drive sustainability, innovation, differentiation in the whole value chain. Think of the E.P.A.T. product lines. It's a new line that we launched two years ago. It is made of products that are compliant with the most strict low carbon footprint. In 2022 it gained momentum in the market. In 2024, 35% of the total electrification revenues, 35% means 3.5 billion, were made of E.P.A.T. compliant products. Amazing.

We are also unique here because we own what I consider the most innovative and powerful and unique asset available in the INC space worldwide: Encore Wire in McKinney. What is it that makes Encore Wire so special for us and for the customers? It is that this is a large production compound, basically a concentration of 12-14 normal-size plants. This is a compound fully verticalized upstream with production of rod and compounds. It is also verticalized downstream with a large-scale distribution center attached to the manufacturing site. With this we offer quality cables in very short lead time. We can perform 24-hour service of cut cables across the United States. Unprecedented, and nobody can copy it. You would need to restructure your footprint, close 14 plants, rebuild those 14 plants in one site. Impossible to do it. So thanks to this asset we can capture more demand and enhance our profitability. And now I'm touching a sensitive topic because I know you have millions of questions about the sustainability, actually millions of doubts about the sustainability of these margins. But these margins are sustainable long-term because they are driven by solid market drivers: the electrification demand, which stems from data center expansion, reshoring manufacturing plants in the USA, investment in infrastructure. Short term we might see some softening in price, of course, but should this happen, we can still leverage the service to mitigate this price pressure and use it as a competitive advantage to outpace the market. So thanks to this asset, when the market grows we can grow more than our competitors. When the market softens, we soften less.

We are done with integration of this business. The integration is fully completed, implemented. We are working on the synergies. Most of the operational and commercial synergies will be captured by the end of 2026. There will be some additional operational synergy that will come on stream in 2028 once we have completed the investment in the new equipment for rod production. But you've seen probably this morning, yes, this morning we made, the board actually made an important improvement for a brand new medium voltage plant. Four additional medium voltage lines are going to be built somewhere. We cannot tell you where, but you can guess. In the US, to provide medium voltage cable to the INC space, further cross-selling opportunity, and to provide medium voltage cable to the power grid space. In both cases leveraging the unmatched service level coming from an asset like McKinney.

Let me move to the fourth one. Digital solutions. You see how strong the drivers from the market are in this space. Mobile data, data center expansion, AI expansion, all sort of data booming is fueling additional demand of data. In this space, here in contrast to the other business segments, we are far from the target that we set in 2027. Of course we cannot excel in all places. We are far because we suffer from a significant stocking that occurred in the last two years in digital solutions in the US. Fortunately the stocking is over, the panic buying that was in 2022 will not happen any longer, but the demand of the market started to rebound, very solid and very resilient. We will beat the goal that we set for 2027 organically and also thanks to the acquisition of Channell. This is the space, by the way, that you keep asking us why do you keep telecom, isn't it a distraction in your business portfolio? We see differently. We see differently because for us digital solution is really relevant to our strategy for twofold reasons. There is convergence in the market, there is convergence between the energy grid and the digital solution grid. And if you missed the optical portfolio you would miss this opportunity. So digital solution is complementing nicely the portfolio of energy cables. It provides a synergistic portfolio. That's something that enables us to sell one-stop shop solution to our customers. So we will continue to invest in this space as we capitalize on innovation in fiber and optical cables to meet the growing performance required by challenging customers like carriers and hyperscalers. And we will invest to further expand the portfolio solutions.

The Channell acquisition comes into play here. Channell is a large acquisition in the US to enable us to combine our strength in cables and in fiber with connectivity. It's a full-fledged player in the connectivity space. And you know, we were discussing this morning with some friends, connectivity is probably the most important piece for our business. If you don't join cable, you cannot produce cables long thousands of miles. Connectivity is essential to the deployment of any network, be it the energy network or the digital network. So the rationale behind this acquisition is straightforward. It of course strengthens our position as solution provider. It makes us an important player in the US space. The US in digital is by far the largest fiber-to-the-home, fiber-to-the-X market in the world. We also have access to a fantastic platform of commercial strength and innovation strength from Channell that we can capitalize on and further expand organically our position in the US and outside the US. Now, in light of this important acquisition, in order to avoid that we lose focus on the integration and on the delivery of synergies, and frankly speaking also in light of this volatility that we noticed in the financial market in the last two months, we paused the decision of a US listing. We pause it while we still recognize the strong value creation associated to it.

So you've seen how strong our targets are for 2028, and some of you might wonder, will they be able to achieve these goals? I tell you, we are highly confident to be able to achieve this goal. We are highly confident because we count on our market leadership. And our market leadership is based on a solid foundation that dates back 140 years. It dates back when, here in New York in 1886, I'm sure you don't know it, we electrified the Statue of Liberty. And then we electrified it again in 1986. So obviously cable cannot last beyond 100 years and we had to replace them. Then we fortified our leadership thanks to our rigor, our discipline, our remarkable track record of M&As. Today our leadership is centered on three great assets: synergistic portfolio, the people, the people value, and the relentless pursuit of technological leadership.

Synergistic portfolio. With our four business segments and our comprehensive cable set we can address the entire demand coming from the market. We can capitalize on the organic growth opportunity and further amplify this opportunity with our innovation and solutions and focus on sustainability. Let me give an example. This synergistic portfolio in action: data centers. After the acquisition of Encore Wire, thanks to their exposure to the electrification of data centers, now with our portfolio we can address the entire demand of cables coming from data centers. All our business segments, the four of them, transmission, power grid, electrification, and digital solutions, are exposed. This means that we make significant revenues with the data center thanks to the data center expansion. Second value: people. This is the real strength of this company. It's the real strength of the company because we develop it, we created it with our inclusive approach in M&A. Two-thirds of our people belong to former companies. Two-thirds of our people belong to Channell, Encore, General Cable, and Draka. So it is obviously true that we do M&A because we want to buy assets, expand the portfolio, and a larger customer base. But the true reason, the real reason why we do M&A is because with M&A we buy talent, we buy competence, we buy know-how, and then we engage these people with our company values: teamwork, innovation, and passion. Third: technological leadership. Technological leadership is key for us to further grow our market leadership, but is also essential to continue our transformation from a cable manufacturer into a solution provider. We came a long way from 18% of revenue that were solution in 2010, 28% last year, and 55% is our goal for 2028. That means that more than half of the revenue of this company will not come just from cables, but service, component, connectivity, differentiation, sustainable solutions, a lot of other things that help us enable differentiation and pricing power.

So innovation, technology, performance, speed, and sustainability, all these are key ingredients to our strategy and our success. And they are not just ours. We know there is another Italian company, an Italian champion, that capitalizes on these values to succeed in the market. Please watch this video and see what this other company is.

How do you tell the story of a passion? A passion born of the spirit of racing, carried in the hearts of enthusiasts everywhere, that defies time, age, language, and culture, that unites young and old, individuals and team, employees and owners in a lifelong sense of belonging. How do you capture the constant desire to push boundaries, master new technologies, adapt and evolve to blend tradition and innovation, yet still stay true to your DNA? How do you capture the essence of what must be lived to be understood? For this is the essence of what it means to be Ferrari. To epitomize the power of lifelong passion, to do what others only dare dream, to audaciously redefine the limits of possible.

Dear all, I am very excited to welcome on stage Benedetto Vigna, CEO of Ferrari.

Thank you for coming. Thanks for having me here. Nice being with all of you.

I was given a few questions, actually I had a million questions that everybody wanted to ask you, and I chose some official ones and then some personal ones.

That's better, the best one.

Okay, you want me to start on the best one? No, let me start on the official one. So what does innovation mean in Ferrari? What makes Ferrari unique in terms of innovation?

I think that innovation is the only thing that each company in this world has to pursue to manage with the uncertainty of the future. I have the luck to work in a company that makes innovation at the center of what we do. I've been working more or less 30 years in my life on innovation. And this morning I was chatting with our IR responsible. Many people have many different definitions. For me the definition of innovation is very simple: innovation is the way to go from know-how to money. That's it. I mean, you can find any definition in business review, strategy, no. That's it. For us innovation is important. We do innovation of product, innovation of process, innovation in management, innovation of system. So without innovation, I think Ferrari, Prysmian, many other companies cannot have a sustainable future.

So it is a strong driver of your brand, of your growth, your market position in all markets?

Definitely. As I said, I have been, before I was working at a company making chips, so fiber to the home, you were a client. There is only one thing really that can keep alive a company: innovation.

And I have to say I made a phone call before buying some shares in Italy. Anyway, it's not as simple, especially for you. I mean, we are in a cable business, a B2B business, but you sell cars to private corners. I believe it's not simple to conjugate or to integrate innovation with luxury, because you consider your brand a luxury brand. So your engineers come into a great clash every time when they invent something that makes innovation relevant, but at the end of the day you have to sell a product that looks real, has some heritage and those things.

Look, one of the points I'm working a lot in Ferrari, and I'm telling to all my colleagues, starting from myself, is that we are lucky because when we have to explain what we do everyone understands us easily. But there is another point that I'm telling to the people in Ferrari, and I got a sense when you were speaking today, that I can see in the eyes of many companies. Like I saw you before, also the companies that are digging and mining the aluminum, also the people that are doing very, let's say, unsexy, unpopular, unfamous things, there is the same kind of traction for innovation. So this fact must be always remembered, especially when you are in a company that is Ferrari, a luxury company, where you have to put two dimensions together: the past and the future. I like to say, to simplify, that we have two eyes, one looks at the past, one looks at the future, and one brain to put them together. That's what we have to do. In each company. I was working in Itch, and I think also here the past, quote unquote, is useless, but in a luxury company the past is important. So what we do, we have the people of Ferrari that go in our archive, that is part of Italian national treasure, and we go to study, because we need to study the past otherwise we make something that has no relation. So in this sense there is a difference, but great.

I think you have a different challenge now. In this time sustainability has to be present everywhere. But how can you lead sustainability in your company, be innovative also in sustainability? I mean, you emit sound, not noise, somebody will tell noise, sound, CO2 emissions by design. Your cars are emitting CO2.

Well, first of all I would like to say that the challenge we have, and I don't want to make it easier, is the challenge that any market leader has. A leader, a company is a leader if and only if he is able to dare when the people are not daring anymore. I don't think they deserve to be called a leader. I believe it. So what I want to say is that it was 1947 when our founder, after 61 years after Ben's tricycle, started to make a combustion engine. Why? Because that was the only propulsion that was available, the roads were not even existing. Now we go fast forward to 2010, 2015, the people start to talk about electric cars, and people are scared. Why are people scared? Because each one of us is scared about three things: whatever is diverse, whatever is new, and whatever is about the future. So change. Maybe it is a matter of preservation. But I think the reality is that today we are talking about electrons, we are talking about digital solutions. Twenty years ago, when I was, you remember the bubble of 2001, the bubble of we do remember it. I was making chips and we were making a lot of things, and the people told this market is faded. Not at all true. So what I want to say is that yes, electric cars are posing some challenge, but this is nothing with the challenge that someone else had 78 years ago when there were no roads and when he was doing something that other people were already doing. So we want to be a leader. Yes, then we have two days, we may do some mistakes, and so what, we will recover. The problem is not to make a mistake, the problem is to recover. So we are making something, a car that will be unveiled in Q4 this year, that will be unique. Something unique because we will not just put four wheels with a battery and an engine like other people do for cost reasons on the mass market. We are doing something that is exciting, that is making the experience unique when you drive it. So there will be still the sound, there will be something. When you enter a Ferrari you interact with Ferrari with eyes, with ears, and with the full body. So you have to wait a little bit. So this is a luxury, you have to wait.

So that was your first experience with Ferrari?

My first experience, I was in an F50, end of 90s. I was living here on the west coast, I was in San Francisco. I had some friends, one of them got an F50. An F50 is a car, 12 cylinder, done in 1995. And yes, it was a pretty unique experience.

This was just before the dot-com bubble.

Love it. Yes, I remember now. We were in Silicon Valley when we heard on the radio the situation. So it was a unique experience because when you are in a Ferrari you don't go from one place to another. It's a full body experience.

I usually go on track every month, on ice or regular roads, winding roads. But it's unique. There was a sentence here: you can understand only if you live the passion.

It's difficult to describe, also because not my mother tongue, I may miss a lot of adjectives. But it's unique, so you have to try.

So what is it that makes the Ferrari experience so unique? Is it the performance, the super performance with the sound, or is it the fact that when you drive a Ferrari everybody on the street stares at you and is very jealous?

We have different kinds of clients. There are some people that buy the cars because they want to try it. Some people that buy our cars because they want to show. We have the luxury to have a lot of our clients buying the car because they want to live it, not because they want to show. Other brands go more in this direction, but our brand is more culturally relevant. Having said that, which are the dimensions that we exploit to develop a Ferrari? One: performance. Two: design. Three: driving trails. Four: sustainability. Sustainability is fundamental. And when you talk about driving trails there is the linear acceleration, there is the lateral acceleration, there is the braking, there is the sound, there is the gearbox, there are many dimensions and we are considering all of these. And the last one is sustainability. I remember when I got in the company, there were only few people believing in it. Now if you come in Ferrari everyone can tell you what is the carbon footprint of each material we buy. One kilo of aluminum, 10 kilo of CO2. One kilo of steel, one kilo of CO2. We have all these things, the people know it. We changed the mindset. This year, 2025, we cut by a factor of three the CO2 emissions, scope one and scope two, versus four years ago. And you know what is the capex we put on the table? Only the capex for solar panels is in the range of 10 million euros. Only the ideas of our people, we throw away less, we save 5% of the aluminum because we throw away less and we buy less, capex zero. Sustainability becomes a sustainable goal but also something that makes the company more efficient, more cost effective. If you come in our company, you find solar panels, fine. You find fuel cell hydrogen ready. You find the latest generation e-building that got the LEED certification. It is the only industrial plant in the world with a LEED certification that is usually given to buildings, not for industrial use. So we believe in it, we make it, and I'm sure we'll get there.

Thank you. I have a last question, which is probably more a desire than a question. Can we swap the two positions in one day? Why not? So you come to have an experience on one of our vessels, we are the Ferrari of the subsea cables, and I can finally experience how to drive a Ferrari down there.

I will come. Just tell me. I like a lot those boats with a long cable.

Grazie, thank you. Thank you again.

Thank you very much for coming.

So thank you. You've seen a lot of stuff, but more has to come. I would like to welcome to the stage Sarini, our head of R&D and innovation.

Wow, thank you Massimo. It's a pleasure to join you on stage. And what a nice surprise having Mr. Vigna here. Loved his vignettes. My favorite one: know-how to money. That's what I tell my team because they're always dreaming. Again, hey, thank you all for being here. It's my pleasure to spend some time here talking about innovation and a little bit about the future. So as I reflect on our company's innovation journey, it absolutely exemplifies what Massimo said: the strength and unmatched global presence, our talent, and finally technological leadership leading to innovation and sustainability as strong business growth drivers.

Now, the best evidence for this is seen in the growth of our new product and solutions vitality. We define this as the portion of our revenues coming from the previous three-year time frame. We started the journey in 2007 with a laser focus on our product performance and cost control, which by the way remains to date in our DNA, because the past is important. From there we have grown to an industry-leading 24% with a major acceleration coming from the last three years. Now, how exactly did we achieve this growth? We achieved this growth by starting with a foundation of seven R&D centers with a very Eurocentric footprint. Since then we have built a global footprint of 27 R&D centers worldwide, close to our factories and most importantly close to all our customers. We started with 400 inspired professionals with expertise in energy cables and grew threefold. Today our global R&D team has more than 1,100 professionals, engineers, scientists, world-class experts in all four business units. And the result, we're really pleased with it. We were able to get 4 billion euros of revenues in 2024 from innovations that did not exist three years ago. Please think about that. What is our aspiration? We're not done. In Prysmian you're never done. We want to be at 30% by 2028. Now when we do that, we're going to be world class, we'll be among the top innovative companies, 5% across all industry verticals.

And you may ask how are we exactly going to do that. For me it all starts with our customers. We are closer to our customers, or at least we aim to be closer to our customers than any competition. We take every opportunity to see our products in use across their entire life cycle, and that gives us precious ideas to come up with solutions to do two things: one, make our customers' lives easier, and two, expand the application spaces we play in. And that's the role of a market leader. Now this relentless external focus has really helped us set this trajectory to go from being a cable manufacturer to a solution provider. And we're fortunate that we also get to play a meaningful role in the evolution of electrical and digital infrastructures of our communities. Now the interesting part: I want to take you all on an R&D tour, in a Ferrari, a sneak preview behind the scenes on exactly what is fueling this desire to be a solution provider and our pipeline of future solutions. The tour is going to have these four stops.

Let's start with the first one: our core technologies. Our core technologies are the building blocks of our business. When we get these right we set the company up for long-term commercial success. And here I'm excited to share that we're investing in groundbreaking technology platforms in not one but all four business units. The world's smallest optical fiber for the next generation telecom networks, to a very innovative hollow core fiber technology that we announced last week, a partnership with Relativity Networks, which is going to help with the deployment of AI data centers in a much quicker way. The most stringent solutions, E.P.A.T. as Massimo mentioned, E.P.A.T. is the industry's first low-impact cabling solution and our customers have come to love it in the last three years and we appreciate that. Next up is a personal favorite, an exciting one. We're going to talk about systems. Systems for our transmission business unit where we expect the fastest growth over the next four years. These systems are what allow us to provide turnkey projects and services to our customers. Here, as Massimo said, we're the undisputed technological leader in high voltage and submarine cable systems. We are the only player who has two extra high voltage DC technologies including our proprietary P-Laser technology. These technologies can push over 2 GW of power, that is enough power for 1.5 million homes. And by the way, these technologies are very relevant to us money-wise as well because they account for two-thirds of the 20 billion euro backlog that Massimo mentioned.

Going on to the next one, it's even more interesting. Our ultra high depth. We are the only ones in the industry who have a synthetic armor technology and the vessels that can help us install cabling systems up to 3,000 meters. We just shattered the world record last year with a successful sea trial of the Tyrrhenian Link at 2,150 meters. Next up, we're fortunate to have a very advanced fleet of vessels, and these help us actually extend the energy transition across many geographies. We're not done yet. Last month, if you've noticed, we also announced our latest innovation in this area. We are the only player now in the industry to have a full suite of medium voltage inter-array and export high voltage cables with dynamic conditions for the acceleration of floating wind. This innovation will expand the space of offshore wind into deeper seas in Europe, especially like the Mediterranean Sea as well as the North Seas. So again, the engineer in me loves to talk about these innovations, but I think it's better if we actually hear from a customer who's equally excited if not more than me.

Amprion. The development of our grid is an important part of the German energy transition. Besides the common goal of a carbon neutral future, it is part of the backbone of the social and economic welfare of Europe. Amprion itself is becoming more sustainable as a company. We set ourselves clear objectives and methods and track their implementation. We at Amprion and Prysmian are accelerating in the same direction, delivering the energy transition in Germany and Europe. Prysmian is known for leadership, engineering expertise, and a relationship which is based on exchange and finding solutions. Prysmian is the sole player in the market who is able to offer two different technologies for 525 kV HVDC cables. For our project A-North we chose the P-Laser technology due to a combination of reasons. The most important one is higher performance in terms of operation at high temperatures. The application of P-Laser technology also for submarine cable systems could help to overcome challenges we see in the offshore business. We are not just talking about technological aspects, we also talk about the execution of these whole systems. We do all possible together. Communication and collaboration are the key factor of success. We have a high level of trust between our teams and the management because future is our mission, and I'm proud to be part of it.

I love Klaus's passion about the future and being part of the future together. Now, the next stop in our tour is going to be sensing. We live in a digital age where our customers expect not only greener products and solutions but also smarter ones. And in this area we actually offer a complete suite of advanced electronic and optical sensing solutions through our EOS unit. Now these solutions actually help our customers in many ways: operational excellence, preventive maintenance, intrusion detection, that's getting a lot of airtime now in Europe like Massimo said, and finally energy management, which is becoming very important even here. Shortly we're going to be announcing a breakthrough. For the first time our team has come up with a solution, an integrated monitoring platform with distributed acoustic and temperature sensing which can monitor lengths over 1,000 kilometers. And when this is available in the marketplace, it's not only going to be a game changer for us but for the whole industry. The final step: services. As Massimo gave a heads up, the combination of Encore and Channell now has really boosted for us this fourth area of services suite. We are able to now bundle cables, accessories, connectivity, and monitoring systems to give our customers a complete solution. We're also able to address another very important growing need: labor shortage, with pre-terminated cables, connectorized solutions both in the energy as well as the digital space. Now for those of you who will join us at McKinney tomorrow, you're in for some nice surprises. You're going to see some brilliant examples of advanced packaging solutions that not only cut the carbon footprint but also reduce the labor intensity on a job site. Now these services are extremely vital for large-scale construction sites such as the data center boom as well as the reshoring of manufacturing that's happening in North America. Again here I'd like for all of us to hear from a customer, a very important customer, Wesco, on how we are partnering together to win in this space.

Wesco serves seven key end markets: utility construction, network infrastructure and broadband, security, industrial OEM, and data centers. Across each of these markets there are secular trends driving growth, including AI-driven data centers, increased power generation, electrification, grid hardening, need for 24/7 security, and IoT automation. Of particular significance is the growth we're experiencing with our large hyperscale data center customers. Last quarter our Wesco data center solutions business grew 70% year-over-year. As companies, we share similar outlook on the growth opportunity across multiple end markets, supported by product innovation, sustainability focus, and Wesco's ability to provide supply chain solutions to our joint customers. During my 11 years at Wesco I've seen Prysmian's willingness to invest where the market is, and your most recent acquisition of Encore Wire for 4.2 billion, largest in your company's history, is a testament of your commitment to the North American market. It's a combination of Prysmian's broad product portfolio and Wesco's ability to offer highly technical and complex services. For our hyperscale customers, speed and accuracy are key, with schedules that are constantly changing. Wesco and Prysmian have partnered together to meet the needs of these highly demanding customers through supply chain agility. Together we're also investing in systems and solutions leveraging generative AI to better understand customer demand patterns and working together to deliver the product at the right time and at the right place.

So there you heard from two of our important customers. By the way, Amprion will be joining us tomorrow at McKinney if some of you would like to get a little bit more flavor from him in person. Again, our customers appreciate several things here: communication, collaboration, speed, and accuracy of our services and solutions. We're fortunate they trust us. Our journey of innovation and sustainability, and talking about sustainability, to share a little bit more about our sustainability efforts, it's my pleasure to invite my dear colleague Christina Beulko on stage.

Thank you very much Sarini, and good day to everyone. It's very exciting to return after one year and a half to share remarkable milestones, breaking news, and to set new ambitious targets also in sustainability for both short and long term. I need to steal you the point: sustainability is an important driver of our innovation strategy, but most of all it's the heartbeat of everything we do. And innovation fuels our sustainability goals and both are the twin engines accelerating our growth since they are the source of competitive advantage allowing us to keep our leadership in the space. The concept of sustainability keeps evolving and goes far beyond the carbon footprint. Our stakeholders, customers, investors, communities, they ask us, they help us to think bigger, to anticipate future needs, and to unlock growth opportunities which combine performance with security, resilience with nature protection. And as leader in our space we believe that our responsibility goes beyond our direct business perimeter and is to leave a positive impact, a long-lasting impact, a net gain on the ecosystems and the communities where we operate. Many of you are already familiar with our sustainability strategy. We updated it at the previous Capital Markets Day, so today I will focus on what's new, where we are raising the bar, which new chapters we are adding to our sustainability roadmap. So we will spotlight climate and biodiversity while reaffirming all our commitment to the previously announced targets.

Let's start with climate, which is where we are taking the boldest step. At Prysmian we believe that becoming bigger implies bigger responsibility. Our carbon footprint over the last few years materially increased, but so has our ambition. Our scope one and scope two baseline now exceed a million tons, 1,043,000 tons, showing a 20% increase in the last four years, accelerated in the last two to take into account of course the acquisition of Encore Wire, but also our own capacity expansions. Think about our investments: Leonardo da Vinci, Alessandro Volta, Mona. But despite this material growth we stick to the same ambition, which is to decarbonize 90% of our 107 plants and 27 R&D centers by 2035, being aligned with the 1.5 degree trajectory as validated by Science Based Targets initiative. So you may ask how this is possible. How can you stick to the same ambition despite this relevant growth? And the first answer is because we're innovative. We are not only innovative in the way in which we launch solutions, but we are also innovative in the way in which we tackle decarbonization. So since we have the pleasure to have Sarini with us today, can I ask you how innovation is backing decarbonization and what is making Prysmian unique?

Absolutely Christina. So for those of you who joined us in Naples for the last Capital Markets Day and are back here, what's the big difference? We've really taken out a significant portion of our scope one and scope two emissions. And how do we do that? One word, maybe two words: sulfur hexafluoride. So sulfur hexafluoride, or SF6, is a mouthful. All I can say is it is the most carbon-intensive gas regulated by the Kyoto Protocol. To give you an idea, one kilogram of sulfur hexafluoride is equivalent to 22,800 kilograms of CO2. And we used sulfur hexafluoride for several decades in our factories for testing high voltage cables and accessories. So Christina, what we ended up doing was putting together a very accelerated innovation roadmap, and in a matter of two years we eliminated sulfur hexafluoride from our footprint. Nada.

Fantastic. Proud of what you're doing, also because it counts more than half of the reduction we recorded in scope one and scope two in 2024 versus 2019. 20% out of 36%. So this is what is making Prysmian unique. But we also go after the basics. So we exploit all the energy efficiency actions from LED lighting to heat pumps, from biofuels to the on-site renewable generation, solar panels, to off-site PPAs. We pull every lever to make this happen and to get some cost savings as well. But this is just scope one and two, and this is not enough. If you look at where we generate the vast majority of our impact, it is for sure scope three. And there are two components here: upstream, how we source, and downstream. Over 90%, 94% of the impact of our emissions is related to the downstream part. These are the emissions related to the use of our solutions once in the hands of our customers. And the main reason here is the expected lifespan of the cable. Once a cable is installed, it is expected to last on average 35 to 40 years, in our case much longer than that. So if we look at where we are here, our baseline is 236 million tons. You can clearly appreciate the difference versus the million tons in scope one and scope two. At the end of 2024 we were able to cut by 57%, almost 60%, scope three downstream versus the baseline, which is amazing.

And you may ask how, how this is possible. We are outpacing scope one and scope two, and the main reason here, the first answer, is grid decarbonization. In 2024 the grid was greener than it was in 2019, our baseline. So the energy powering our cables was greener, thanks to the global investment in renewable generation that we contributed to develop. This is one of the reasons why we keep saying sustainability is what we do at Prysmian. My colleagues would say there can't be energy transition without transmission. But you may challenge us and you can say, okay, this is the grid effect, and I know you very well, so what is Prysmian directly doing to cut downstream emissions? So if we strip out the grid effect, at the end of 2024 we were able to cut by 21% scope three downstream emissions. And this is the pure effect of our innovative solutions. So Sarini, can you share with us an example of Prysmian unique solutions that help us to cut downstream emissions but also our customers' emissions?

Another one of my personal favorites: E3X technology. Since we're in the US, let's talk about overhead line transmission, because overhead line transmission has been identified right now as one of the most important factors

To improve the resilience of the US grid, over 70% of the overhead conductors today are more than 60 or 70 years old. Here we came up with a very elegant yet simple innovation: E3X technology. It's classified as an advanced conductor technology. The idea is you have a high MSVD coating, a highly functionalized coating that you put on the outside of an overhead conductor. When you do that you can benefit two ways: either you push more power, 25 to 30% more power, or you actually save the same amount in losses. We've gone a step further now. We've developed a set of robots which can actually be put on the existing infrastructure. We're talking about 600,000 miles in our country here where this upgrade can be done without reconductoring or bringing the lines down. So this is a very good example, Christina, of how we are combining innovation and sustainability for business impact. We also won an award, twice. We won the Edison Innovation Award, which are called the Oscars of innovation, twice for this. So I should have brought you a recycled copper statue today.

No, thank you very much. And can you share — I know that we have a few other options — can you share with us another example of innovation which goes also beyond scope three and which allows us to avoid emissions, the so-called scope four?

Since we're in New York, I'd like to talk about something which is more specific to New York. Just a piece of trivia for all of you in the audience: New York is home to the world's largest underground distribution network. Right under our feet is 100,000 miles of power cables and 300,000 underground volts or manholes where these cables are spliced together. Now Con Edison, which is a utility that manages this whole network — very important customer to us — they came to us two years ago and shared that the single biggest concern or source of failure they have in the network is poor workmanship. We're dreaming big together with Con Edison, Exelon, and the US Department of Energy to come up with the world's first fully automated splicing machine, which will reduce network failures from over 85% to 5%. Again, this is a great example of using automation technology to reduce not only scope three but also scope four emissions. And the most important part of all, we're improving human safety with this innovation. We're aiming to save lives.

Absolutely, this is amazing. Thank you very much, Sarini. So let's complement the view of scope three and move upstream. This is how we source here. Our baseline is 13 million tons, 5% of the overall emissions to value chain, so less impactful than downstream but more in our control. We are working, partnering with our suppliers to decarbonize the value chain and introducing new standards into the system through recycled copper, low-carbon aluminum, bio-based material, recycled polyethylene. And this is because the vast majority of the carbon footprint of the product is at the design phase. So Sarini, how innovative we are here and how we are helping to push the standards of the value chain. I was very pleased to hear Mr. Vigna share similar examples of what is happening at Ferrari.

So yes, there's a lot of appetite right now across the value chain. And here the only point I'd like to highlight is I spoke a lot about customers, but our approach to open innovation and collaboration extends both ways in the value chain. And each of these examples have been joint technology developments we've executed with some of our strategic suppliers — everything from recycled copper, low-carbon aluminum that eliminates 75 to 80% of the carbon footprint of aluminum, recycled polyethylene, and more recently bio-based materials. Now bio-based materials have a negative carbon footprint. It's like you're sucking CO2 from the atmosphere.

Incredible, so yeah.

So we've got our engineers, our manufacturing facilities using all of these to reduce our carbon footprint.

This is amazing, thank you. So if we add everything up, it's clear that we are accelerating. We are accelerating our decarbonization journey and so we are able now to move forward the trajectory we were following for scope three from the well-below-two-degree trajectory to the 1.5. We are following the same trajectory for scope one, scope two, and scope three. So today we are proud to announce that by 2035 we will decarbonize 90% of scope one, scope two, and scope three, which implies that we are bringing forward our net zero year from 2050 to 2035. We are bringing forward net zero by 15 years. We will be net zero by the next decade, and this represents a new standard in our space. But this is climate and circular economy, and then I told you before we are adding new chapters to our sustainability strategy because it's never enough. We are introducing a new dimension, which is biodiversity.

Our relationship with biodiversity is not new. For decades Prysmian has been a pioneer not only in connecting the world through cutting-edge technologies but in doing so with the utmost respect for the ecosystem. From land to submarine installation, which is where our biodiversity impact is mainly concentrated, we have always followed a do-no-harm approach, making sure that we were minimizing any disruption and protecting the overall ecosystem. But today we are taking a leap forward. We are moving from a do-no-harm approach to a net-gain approach, and we are committing to be net gain on the most critical areas by 2035. Why? Because we are responsible, of course, but because also biodiversity is becoming a source of competitive advantage and is one of the most frequent questions I received from you in the last couple of years. If you take the most recent tenders in specific countries, especially EGL1, EGL2, but also EGL3 and EGL4, they all have biodiversity KPIs in the tenders. And since we are the leader in our space, we don't only want to meet requirements, we want to introduce new standards and push the industry forward.

A few examples of how we are doing that: we are using advanced sophisticated acoustic devices to direct and promote the nesting of protected species. We are using sensing and monitoring systems through the use of AI to deter marine life and monitor in real time marine mammals to make them safe. Something we did for the Elba-Piombino: 40 kilometers of route, we engineered specific equipment to protect the seagrass meadows, Posidonia, the lungs of the Mediterranean, because these represent a vital carbon sink. And all these actions are not only helping the ecosystem to thrive but also they are contributing to winning projects. What net gain means: it means that the overall ecosystem after our interventions will be in better conditions than we found it at the beginning of our operations. We will disclose our milestones through the most rigorous framework in this space: the TNFD, the Taskforce on Nature-related Financial Disclosures, and we are completing the process to be considered an early adopter of this framework.

We have been talking today about creating value for customers, communities, and ecosystems through a holistic approach. But let's see how all these dimensions come to life in action. Let's take projects that you know very well: EGL1, EGL2, but also No Connect. The overall aim of these projects is to bring electricity to households. The three of them will bring electricity to six million homes — green electricity. But on top of that, we are making sure that we even increase our impact. So we try to avoid or cut emissions: EGL1 and EGL2 will avoid 90% of the emissions through the use of biofuels, while No Connect will cut 13 million tons of CO2 emissions in 25 years. Wherever the technology allows, we will use recycled content. EGL1 and EGL2 have 20% recycled copper. We look after biodiversity, but we also engage with the local communities, providing education, scholarship, mentorship to the local students. We are even opening our sustainability academy to our customers and our suppliers. But this is not only about the transmission business; we follow the same approach across all the business segments.

We have KPIs that we use to monitor the sustainability impact of revenues in our business, which is the sustainable revenues. And these KPIs capture everything from P-Laser to EPATH. Sustainable revenues were 19% in 2022, 37% in 2023, 43% in 2024, and we are now targeting to exceed 55% by 2028. And you can clearly see the acceleration. This trend is not accidental because our customers — being them regulated system operators, utilities, distributors — they are all asking for green, secure, long-lasting, reliable solutions. And we are replying with cutting-edge technologies which cover all these aspects. We are using installation vessels and devices that protect the ecosystems. We are launching green labels like EPATH which combine efficiency and low environmental impact.

So net zero by 2035, net gain in biodiversity by 2035, over 55% of sales from sustainable revenues, at least 50% of our employees shareholders of the company. We definitely like these. These are not just numbers, these are not just simple figures, these are our values. This is our unwavering commitment to leave a better world for the future generations. And I'm sure you will agree. Absolutely, Chris, we've got our plates full here. So thank you very much for your attention, thank you very much for your support. And I have now the pleasure to call to the stage our Group CFO Pier Francesco Facchini, who will talk about value creation from the financial standpoint.

Thank you for the time you spent with us today. And I want to say that we have really many ways to bring us to the goals of 2028. We have many pathways. We certainly have a stronger position as a solution provider that is helping us to gain more share in the market and more profitable revenues. We have our acceleration in the market, our dynamic approach and flexibility approach. We have also — you heard this a lot today — technological leadership to make us succeed even more. But most importantly, we have a CEO and a team highly committed to delivering these goals. Highly committed. And my people, my colleagues, are here. This and you are one large team.

We met today after one and a half years from our last meeting at the Capital Markets Day. So where are we going to meet next? Obviously, don't know, nobody knows it for sure, but I tell you that myself and my team can't wait to meet you soon to surprise you again with more good news.

I have one important moment again together. I will welcome on stage Francesco Gori, our Chairman of the Board, for one more good news.

The good news is that the morning is over. It's been an intense morning, I think very interesting, and I want to thank you all of you and all the people that are following us via streaming for being with us today in New York. I want to thank Massimo, also on behalf of the Board of Directors and his team, for the hard work and the excellent presentation that I think was very interesting for us all, including the Board, because reviewing the full story with all the participation, including Benedetto Vigna's intervention and the customers, it's been very interesting. So that is for today. The last piece of information is the following: 2025 marks a very important moment in the life of Prysmian because it is the 20th year from when Prysmian was born. And 20 years, I think, that have been spent in delivering results, improving the company, sizing the company footprint worldwide, and growing up talents that allow the company to reach the targets that today Massimo showed you. So 20 years of leadership that we are now accelerating, and there is no time like now to look forward to the future.

Thank you. It's time for Q&A. It's time for your questions, definitely. You were looking forward, I see Danielle already raising hands. So we will take questions from people attending here, but we also have the opportunity to take questions coming from the web. Of course, let's start from you, Daniel.

Thank you so much. I just have two questions. It sounds like the big message is sort of pivoting more towards service. When we think about service, lots of the capital goods companies that we cover do significantly higher profitabilities in service than they do in product — sometimes two times or more. But you guys sort of power grid slightly down, the margins, electrification sustainable, it's not on the transmission bridge, it's all on the digital solutions. So can you help us understand over the long run what that pivoting for services can really mean on margins? Is service materially better margins than products for you, or not? It's just more about sustaining where you are and remaining competitive?

Service is a business that on the one hand there's still some pockets of commodity, and of course the building wire space is a commodity. Without the service, we will not be able to sustain the margin. But there are also important portions of our business where service is less important because the technological leadership becomes prevailing. And altogether we have a nice combination of cement, our business unit, service, technological leadership, sustainability — will help us grow this margin. Today we sit on 11%. The margin expectation — for two-fold points — the margin expectation on Transmission and Grid is going to exceed what we said at the last Capital Markets Day, when we said that we'd reach the 16.5% level in 2027. We are going to go beyond that level. It is embedded in the 2025-2028 CAGR. Partly will come from volume, but a significant chunk will come from incremental EBITDA margins in the region of 18%, maybe 19%, maybe 20%. And this, combined with also the acquisition of Chanel, which is extremely accretive in the Digital Solutions space where our margin will move from the current 12% to 17%, just thanks to the acquisition, brings the total margin, the EBITDA margin of the company in 2028, above 12%. How much above, we will see. It depends also a lot on the sustainability, as we keep talking about it, in margins on Power Grid. But we have solid drivers, we have a great footprint, we have a large intimacy with all customers, so we are best positioned than everybody else to leverage all this stuff, capitalize on it, and keep growing the absolute margin as well as the relative margin.

Thank you. And my second question is just more — you've just decided to do one more step in the US, and there's a lot of anxiety, I think, from investors about sort of which stage we are in in terms of the US economy, where are we in telecoms and data centers. But you clearly decided to do this move for Chanel now. Can you give us a little bit of context of why now? Was this a competitive process? Do you have a different view on the market? Maybe Chanel is not our last-minute mil chance?

We've been working on M&A target setting and assessment in telecom, especially in North America, for at least 18 months. We mentioned this to you at the last Capital Markets Day, and we said following that Capital Markets Day that we wanted to strengthen our position in telecom. We reached out to at least 12 targets in the last 18 months. Some were European with some strong presence in the United States; most of them were US-based, because the US is the largest market. So it is important to strengthen our position in Europe, but it is ultimately important to strengthen our position in telecom in the United States. We came across three or four or five opportunities in the US that were viable, in terms that they were willing to sell, and then for different reasons — price, good fit, a lot of different things — we singled out Chanel because it was the best fit. The best fit in terms of size, the best fit in terms of complementarity of portfolio, was the best fit in terms of financial sustainability. We didn't want — we had another target, large, you can also imagine who it is, but with a lot of financial debt that they were willing to offload to us, and we were not willing to receive it. Chanel was the one that met all, ticked all boxes. And now, because targets become available when they become available, and when they become available you have to accelerate and make them a real merger. We started talking to them in June. I reached out to the owner — Chanel is a family-owned business — in June last year. Then we got together, we understood each other, and we offered a non-binding price in December, and then the last three months we spent on the due diligence and the merger agreement. And here we are.

Hi, Chris Lenn from UBS. Thanks for taking my questions. I've just got two questions if I may. The first is on the target for 3 billion or so of EBITDA by 2028. If I do the numbers, it seems to me like the Electrification margin maybe will blow sort of 10% by 2028 if we take into account Power Grid staying at 12 to 13 and the growth in Transmission as well. Are those the right sort of numbers to be thinking about for Electrification? And does that imply the Anchor margin is slightly reducing out to 2028? Just trying to get clarity there, as I think you said in your remarks you'd see stability on margin. Just trying to understand Electrification to 2028 on low voltage.

Okay, super clear. Thank you for that. And second question on the capacity additions for Transmission: is there any sort of guidance you can give us on the capex we should be expecting there on Transmission to support that EBITDA CAGR of 25 to 28%? And how are you seeing, with that new capacity coming in, the supply and demand picture as well at high voltage?

At high voltage we are no different from what we told the market at the last Capital Markets Day. More or less, in the five years from 2023 to 2028, we will inject 2 billion of capex in Transmission. We removed the investment in Brayton Point in the US — we admit it doesn't make any sense. So when we make mistakes, we admit it. The market didn't take off, not because of Trump, guys — it's because already three years ago we thought it would develop. In reality it didn't develop even under the Biden administration. So the US is working more on electrification, which obviously in my view makes much more sense than what Europe is doing — investing in generation and also electrification at once, impossible to sustain. So capex: 2 billion. We removed an expensive investment for one brand new plant in Brayton Point, Massachusetts, and basically replaced all of it with incremental investment in Europe, which is where the market remains strong and where the market grows in the coming years.

Hi, VC from Citi. Thank you very much everyone, good morning. I have a couple of questions on Digital Solutions if I may. So the first question is a follow-up regarding Chanel. You've alluded to the EBITDA margin in Chanel. You've given us an absolute EBITDA number — it'd be quite interesting to learn what the margin is. And could you also give us a little bit of background on whether that margin has been stable over time, or has there been an improvement in recent years?

Fully understood, thank you. My second question, again on Digital Solutions, a bit broader. We sometimes get questions given some of the news flow in the US and some of the political chatter there — there's of course Starlink, and also more broadly the questions around the BEAD program. I'd just be interested in some of your thoughts around that.

I think the question is around market developments in the US specifically for Digital Solutions, particularly rural. The concern is probably about the rural broadband, which is certainly not what we factor in in our main plan, because there will probably be some rural subsidies, but they've been talking about it for many years and we didn't see any significant opportunities there. The real growth that's happening in North America is the fiber to the X, fiber to the data center. Already 45% of our volumes of optical cables in the US are based on data center expansion. They are rich cables that require high-density fiber. It's a market growing very fast, and they are long-distance connections in data center expansion. So we don't count much on the fiber-to-the-home rural band, as we count on fiber-to-the-home deployment in mid-cities, large cities, and mid-cities. The US is only at 35% deployment of fiber to the home, not because they're lacking rural opportunity, but because they're lacking mid-size cities and all the rest. And data centers will add additional demand on it.

Hi, good morning everyone, and thanks for your time. I've got two questions. The first one is on margins. So you said in 2028 we could be above 12%. Last year we were at 11.3%, and when we look at the moving parts, you have margin improvement, significant margin improvement in Transmission, significant margin improvement in Digital Solutions, some normalization in Power Grid, and Electrification largely stable. Now the question I have is more — when we look at your presentation today, and especially Sarini on innovation where you highlight these new areas where you are going into, and also a little bit following up from Daniel as well, more on the service side — so if you target a higher vitality ratio in the future, what is the upside from those new innovations on margins? Sarini talked about a couple of those — like this new groundbreaking technology in subsea cable that could be really revolutionary, and same with these overhead wires. So maybe a question about how you see the role of innovation playing in margins by 2028 versus where we were last year.

Akash, if you look at our last four years, you've seen our margin growing from 7% to 11%. Part of it is due to the market growing, is more demanding, and there's more imbalance especially in Transmission between existing capacity and current demand. Some of it is because we leverage this innovation already. We already leverage sustainability, pricing, differentiation, service as a way to increase margin. We were at 7% in 2021, we grew to 11% last year. And I agree that 12% might not be reflecting the full potential of this company. But you know, we — I think you appreciate our style — we want to set targets that we are confident to deliver and hopefully outpace these targets. And I'm pretty confident that this will be the case in 2028.

Thank you. And my second question is more short-term. So last month at Q4 results, when you admitted that there is some price pressure in Anchor, you told us that you expect improvement from March onwards. Now we are end of March, so can you confirm if you have seen improvement in Anchor pricing? Or will it take more time than what you previously said?

I had to wait to answer this question. Either I do it myself, or I ask the person behind me, which is the CEO of North America. You can ask this question, but I would love to have a combined answer. He told me and he showed me that in the last month of March, different from what happened in November-December, and more importantly from what happened in January and February where price pressure was still very high, in March we saw a strong rebound in profitability. Of course we had to be much more selective in the market — we were not chasing volume for the sake of volume, we were holding price nicely. And finally also those who were creating pressure in the market — I cannot name the company, but you can figure this out — have come to terms and set price improvement in the market. So that's why March looks completely different from November and December, and from January and February. I hope — maybe I anticipate your next question — that this is a trend, this sets a new trend which will bring the level of margin in line with 15-16%, which is what we delivered in Q3 last year. March itself is already at the level of margin that we saw in October and September last year. Sustainability of margins depends then on the seasonality effect that we see starting in March and April, as we enter the high season. And again, don't forget the usual theme: the balance between capacity and demand, which I think will remain favorable to the supplier side.

Thank you. Good morning. Alistair Leslie-Bernstein. Just a couple of questions. One on the US listing: you said that was paused. I think it's put a little bit of pressure on the share price. Do you sort of see that largely as a timing issue? This is maybe something you can return to once, I think, if Chanel completes in Q2 you can come back to this? Or do you think there's maybe a higher chance now that this doesn't happen at all? And then the second question: on data centers and in Digital Solutions, you've sort of said in the past that perhaps you were a little bit kind of underrepresented here. So does Chanel — with the acquisition of Chanel — does that now give you everything you need in Digital Solutions to really pursue all the opportunities in front of you there? Or do you need to continue to kind of innovate and develop organically and perhaps still do some bolt-on M&A deals here as well?

The second question was on Digital Solutions and the strategy we want to pursue there — if Chanel is complementing our portfolio, helping us to grow, or if we are still looking for further M&A to further complement the portfolio. You should be satisfied with two M&As in one year, guys! We have a very ambitious agenda in M&A, because as you know we built this company thanks to M&A, thanks to organic growth, thanks to resilience. But M&A opportunities where we create incremental value — so it's not simple to find available targets. Available target means a company that is for sale. It's not simple to find the best fit with our footprint. And our footprint is not just the cable footprint, it's also the cultural values of these companies. So it's very important for us that we find that cultural fit. That doesn't mean we have a culture equal to ours in the company that we buy, but we had to make sure that, you know, when we acquired Anchor, when we acquired General Cable, we said 1+1 makes 3. Now with Chanel, the owner of Chanel told me 1+1 makes 11. So the fit is essential. We will continue scouting the market for new opportunities. We need to have the fit, we need to have the availability, we need to have the financial ability to do it. I think for the next two years — not to say we pause — but we will further invest in identifying the proper target. Now we closed a big gap that we had in our portfolio: two gaps. One was Anchor — we were not a player in the electrification space in the US — ticking the box. We had another gap: we are not a solution provider in the Digital Solutions space in the US — Chanel closed the gap. We don't have any major gap left now. So all we will do in the future is to find something else that can complement the portfolio, increase our leadership in geographies, in different markets. But all gaps that we had have been closed.

Hi, thank you. It's Josh Miller from Morgan Stanley. Just, I guess, first question going back to something Chris was asking on the high voltage supply-demand environment. In the past you've talked about this longer-term view of being 30% undersupplied. Since then we've maybe seen a bit of a step-up from Asia competition in terms of expanding capacity in Western markets, and also maybe a weakening of the offshore demand environment. I guess if you were to take a step back and re-evaluate that statement, that view, what would that look like today? And I'll start with that question.

You know, the market is still strong. Of course the imbalance will reduce because everybody has invested in this capacity. It's like what happened in Power Grid: everybody has invested in medium voltage capacity in the United States. That's why capacity is not enough to lead and maintain market leadership. That's why innovation is a key element, which might not result in incremental margin increase, but it will result in becoming more cost competitive, more cost effective, and more competitive in the market. So one day there will be a full balance between the Transmission demand and the capacity. This day has not come yet. It is probably likely to be 2029-2030. Bear in mind that our capacity is already sold out through 2030-2031. So for the next three to four years we will live this imbalance between the market capacity and demand. And then remember that in Transmission it's not just a matter of cable manufacturing capacity. You are Chinese, you are Koreans, you are LS or whoever — they come to Europe with a lot of capacity in Transmission. They are qualified with 525, but while they are qualified with 525, we already work on the 600 kV solution. We also have 700, and we own it since 2018. Then when it comes to installation, they don't have any own installation vessel that works in Europe. That's why, despite the significant imbalance that we had in the last four years, you've seen probably only 5% of the market demand in Transmission satisfied with Asian players. It's not that we don't like Asian players, don't get me wrong, but you need to have a full spectrum of capabilities if you want to succeed and remain in this market. So I don't see them gearing up their company to the full spectrum. The market demand will be balanced one day with cable capacity. It will never happen that we'll have other competitors with global capacity capability in installation and manufacturing in this market. And this is what we will leverage to remain competitive and to gain market share and maintain our margins.

Amazing, thank you. And just a second question again sort of linked to high voltage. You're now guiding for sort of an 18 to 20% margin for 2028, that's what it sounds like. I mean when you look at new orders, obviously you had some new orders at the end of last year — when you look at these new orders you're still taking in, is there room for this to push higher in the sort of out years beyond 2028? Do you feel like this is now the right level for this business going beyond into that mid to long term?

I think the question is — Joshua, if I get it right — you know, we are targeting 19, high teens on the EBITDA margin for Transmission in 2028. So if we see the incremental projects we are taking now, there's room for further expansions. Considering everything we are discussing, we already have these projects with high margins, the 16 billion euros. That is why we think that with good execution, we will raise our 15% margin in Transmission to 17-18%, theoretically to 20%. So I can tell you we have a margin in our back that is as high as 20%. We still like to deliver it, but if you look at the margin it's already at that level — 20% — today. We are still winning projects at very high margins because we are not yet there in terms of balance between capacity and demand.

Yes, hi, it's Akash again from JP Morgan. A couple of follow-ups to Facchini. So the first one is on the Chanel deal. I think when you acquired Anchor you gave us what sort of EPS accretion you were expecting from Anchor. Could you quantify what sort of EPS accretion we should expect from Chanel? And then the second one is the bridge between EBITDA and EPS. Because last time when we had the previous Capital Markets Day you did not give us EPS guidance, but this time around for 2028 you have given EPS guidance. So maybe if you can talk about the big ticket items that go from EBITDA to EPS, so we can see what your assumptions are behind some of these lines.

A question for Facchini on the link between free cash flow and working capital. So in 2024 you generated 1 billion free cash flow, but more than 40% of that was working capital, which makes sense because in 2023 you announced big orders and so you took the advanced payments. My question is basically over your plan, what are your assumptions for this item of the working capital? Also in relation — and that's the second question — to your projection of 15 to 20 billion intake per year, which is a big number for Transmission, because some of your peers guide more 10 to 15 and not 15 to 20. So I would like to know a little bit more, first of all the composition of this 15 to 20 billion across interconnector and offshore wind, if you can provide a little bit more color. And second, in relation also to the intake in high voltage, the dynamic of the working capital to understand if it's going to continue to play a big role in your free cash flow.

Maybe I didn't get exactly the assumptions on the working capital coming from Transmission. Considering that in any case we are considering a 15-20 billion market, which is higher than the estimate of our peers because they are guiding for a lower market, in between the 10 and the 12 — the question was how did you build the 15-20 billion, because it's different from what your peers typically say. Where did you take this assumption? How did you build this assumption on the market evolution?

If you do this exercise, of course you also end up with higher numbers, which is not far from some of the other competitors. But we are taking a more prudent approach, lowering a bit the estimates. And then — we see the pipeline of projects from customers. They've already given us a lot of volume to cover revenues for us and other competitors through 2030. They launch in 2025 and 2026 projects that will be executed in 2031, 2032. So we have this visibility and the comfort that they are working on these projects as we speak. So 15 to 20 billion is our best estimate, bottom-up estimate, of how much demand or intake over the next five years.

Hi, Simon from Jefferies. Thank you for taking my questions. So my first question is on medium voltage. I remember back in Q4, as you were launching the 20,000 ton new capacity onto the US market, you were very transparent about some margin softness that you see on the spot market. Now you have this new 245 million investment in medium voltage in the US ramping up from Q3 2027. Can you give us a bit more color on how you're comfortable with the 12 to 13% margin with more capacity? And maybe in particular how you see the competitive landscape in the US, given your biggest competitor here is a private player — we don't really have a lot of visibility on how much capacity they're adding.

I think the question is about medium voltage, US only. Power distribution — so we have low-voltage cables for the grid and medium-voltage cable for the grid. It's a market high in demand, but over the last three years everybody, everybody, has invested in capacity. But different from everybody else, we have three channels to the market in this space: Power Grid — utilities —, renewable business, and public power distributors. So we are better positioned than the others to leverage this through our channels to saturate our capacity. Capacity has increased significantly in 2024 and 2025, will continue to increase, and with a new investment approved last night we will further expand it. But we have three channels to play with. And the most difficult channel to own and to retain is the utilities channel. Utilities are, I mean — I think you explained it before — the most conservative customers in terms of cable specs and the most demanding customers in terms of service. So service matters. Service means you have to have cable in stock to deliver the demand in the shortest possible time. You have to have supply security. You have to have qualifications to enter in this space. And that's why in this space we have frame agreements — so there are contracts that last three, four, five years, and most of the time, if you performed service-wise and delivery-wise, they don't even go out for a new tender. They just extend these five years by one or two more years.

So that's why this is the most difficult space to possess. On the other hand, we have renewable projects — it's a spot business, tender projects you can win or lose, and you move on to the next opportunity. Public power is the equivalent of a distributor for electrification space, so they buy spot. So it's easy for all those competitors to remain players in renewables and in public power distribution. In fact, I'm aware of one large competitor in the US that has tried for 10 years to enter into utilities — they're not yet there. So we have this beauty: we can play on the three segments, and so we think we own all the assets and capabilities to succeed in this space, no matter what is the balance between the existing capacity and demand. We will have one chance more than the others to remain high in volume, in saturation, and in profitability.

Thanks very much. So my second question is on the vertical integration of Chanel. Fiber optics is the most important expensive part in the telecom cable. I think in the European market Asian imports make up a lot of the supply, given their cost advantage. Is it the same in the US market? If so, how do you see tariffs play in Europe and in the US?

In the US, that's the question. The US is a protective market, not only in terms of optical fiber — that's across the board. We don't have a Chinese player in the US. We have some Indian players, one Indian player very minor, which is by the way struggling. And on the contrary, Europe is open to fibers and to other stuff imported from Asian players. But as the US is already super protected, also Europe is becoming more aware of raising fair barriers to this unfair competition. Because the digital network, alongside the energy network, is a critical infrastructure for the US as it is for Europe. So Europe is becoming more aware. We succeeded one or two years ago with our anti-dumping case for Chinese imports into Europe — tariffs as high as 25-40% have been applied since then to Chinese cable imports into Europe. There is another case that we filed two years ago for fiber importation into Europe. So gradually, also Europe will raise this obvious protection towards the local producers. The US is not protected by this tariff — the additional tariff — that tariff has been set already. There are little shares of the current market in the US, across the board — Transmission, high voltage, Power Grid, Electrification, Digital — where foreign players can play as major roles.

Thanks very much. My last question, if I'm allowed, is on the Transmission market size. You commented on this 15 to 20 billion that you expect between 2025 and 2030. I saw the APAC bar is growing. So previously you already commented on Transmission business being a global market. I'm just wondering, and recently you were selected as a preferred supplier for the Malaysia-to-Singapore link. So in this market, what specific countries maybe do you have in mind for this growth?

I caught the first part of the question, or the last part. So the market is foreseen at 15-20 billion. 85-90% of it is European market. The US, as said before, is not in a position to be a player in this market because on the one hand they don't have the needs of investing in offshore wind — they have plenty of space onshore, and they're investing a lot in renewable onshore and solar onshore. So why would they spend or embark on expensive offshore projects to generate the same quantity of electricity that they can generate green in onshore applications? And second, they don't have the morphology of Europe. Europe — all countries are surrounded by sea, and the fastest way to deploy high-voltage long lines is to go via sea and not via land. In the US it's the opposite: they are using overhead lines because the density of population is very low, nobody is disturbed by these high overhead lines, and overhead lines is the best way for them to transmit green electricity across their states. So the US will never become a sizable market in submarine space or HVDC land underground. But APAC is an important market for us. China — we cannot enter that market, we are not allowed to participate in bids in China, and we don't even want to. Europe and APAC are the two important markets to have a global presence in Transmission business.

Hi, this is Andra Cartana from Federated Hermes. I have a question for Sarini. I really enjoyed your presentation. Can you help me understand how you allocate capital? Because I'm sure you have plenty of projects right where you can invest. How do you think about which one you want to prioritize? Is there any financial KPI in mind? And secondly, it would be interesting to understand if some of the innovation comes from clients coming to you and asking for XYZ, or you going to them with sort of like breakthrough innovations?

I can do the second one if you want. Let's start with the second one — it's easier. Yes, we have customers coming to us, but more importantly we are proactive in this approach. So P-Laser technology, the one we highlighted, the world was not asking for it — it was our idea, and customers embraced it. And then you have E3X, same thing. It was something we envisaged in our labs, and customers are embracing it. Then you have other solutions, like the automated splicing and a whole bunch of other things, where customers are seeing the need. And quite honestly, it's a luxury to have the second part because things go faster. It's really a good mix of both for us.

Yeah, when you innovate and you are the only one providing this solution to the customer, some customers want to have a double source. So this is when innovation is not enough to penetrate a customer. But again, when medium-voltage P-Laser solution was invented, customers were reluctant because they could not find the same alternative among other suppliers. But then with time you break this barrier and you are really able to push your innovation through all customers.

Thank you very much, everyone. My pleasure. Just another follow-up if I may. So I can see on the appendix you've not assumed an impact from import tariffs. I was just following up again on that question. But in terms of the pass-through mechanisms, it would be great if you could just walk us through how those work, maybe by business, particularly around some of the metal tariffs that have been proposed recently.

Thank you. I think we are unfortunately running out of time. We are 10 minutes late on our schedule. It's probably my fault — I overran by a few minutes. So thank you again. Some of you will join us with a tour to Anchor Wire, so you will see how large and impressive this site is. Some of us will return to your location, and I hope to meet you soon. Really, thank you.