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Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the INWIT Second Quarter 2023 Results Conference Call. [Operator Instructions]
At this time, I would like to turn the conference over to Mr. Fabio Ruffini, Head of Investor Relations and Corporate of INWIT. Please go ahead, sir.
Thank you. Good evening, everyone, and thanks for joining us. With me today is Diego Galli, INWIT's General Manager; and Emilia Trudu, Chief Financial Officer.
Before we begin, please allow me to draw your attention to the safe harbor statement on Page 2. As usual, following a brief presentation, we will open up the floor for questions. Over to you, Diego.
Thank you, Fabio, and welcome, everyone. The second quarter results show steady progress in the execution of the business plan. Industrial delivery of New Sites, continuous upscale. Organic growth was 13%, among the best in the industry with the new services up by 45%. Margin expansion and cash flow generation were solid.
Demand for digital infrastructure is structurally positive driven by mobile data growth, densification needs and urgency to optimize coverage, both outdoor and indoor. INWIT is building a solid track record in a challenging environment for the Italian telecom industry where operators are looking for cost savings and better returns.
Shared infrastructure investments can be part of the solution, a source of efficiency. And while this is typical for tower cost, INWIT is unique with 2 anchor tenants and also the role of neutral loss. We are extending this model from macro grid outdoor to microgrid indoor in DAS. Our companies can be at the center of a vicious cycle between location owners, public and private and mobile operators with value creation for all.
Moving to the key figures of this quarter on Page 4. Financial and operational indicators maintained a consistent growth rate in Q2 among the best in the industry. Starting with revenues, growing consistently at low teens since the beginning of the year. Growth with Anchors is material at more than 12%. OLOs continued to add new PoPs offsetting lower other revenues, which were particularly significant in 2022. Increased commercial effort led to a 45% growth in new services.
Here, the quarterly revenue figure is 2 digits for the first time. EBITDA after lease growth was more than 16% leading to margin expansion to 71%, and we are on a path to 76% EBITDA after lease margin by 2026.
Cash flow generation was strong. We captured the benefits of net working capital efficiency actions on legacy items. These benefits are structural and support the progress towards full year targets. After dividend payments, leverage was 5x in terms of net debt-to-EBITDA against 5.6x a year ago, confirming our ability to deliver quickly.
INWIT's industrial delivery machine continues to operate at a high level. The rollout of MSA New Sites is in line with targets, and we started the delivery of other 2 BTS programs, next-generation EU 5G and Open Fiber. Strong in New Sites supported the volume of new PoPs at 1,060 with tenancy ratio inching higher at 2.2%. Real estate transactions were more than 500 with the majority of acquisitions supporting margin expansion, a quarter of further progress along the trajectory of the business plan.
And now I will turn it over to for a more detailed review of the results. Thank you.
Thank you, Diego, and good evening, everyone. On Page 5, the evolution of macro sites, about 23,500 today and growing 3% year-on-year confirming INWIT's leadership in the market. Demand for the site is strong. Operators are focused on optimizing coverage of the market and upgrading to 5G to drive densification. We invest with a minimum threshold of double-digit IRRs, highly visible cash flows and the tenancy ratio of 2 from day 1 on every MSA New Site. Over the past couple of years, we made New Sites our priority in terms of both being able to grow on a quarterly base and being less volatile. We have built a consistent track record going 70 New Sites in 2020 to about 800 in 2023.
The second quarter of the year shows a total of 225 New Sites, a sequential improvement for the MSA from quarter 1 and the initial rollout of the other 2 BTS programs. We continue to address the administrative challenges that still makes building a New Site a long process, adjusting to the higher delivery scale we have reached.
Let us now review on Anchor PoPs on Page 6. We added 650 new PoPs with TIM and Vodafone in the second quarter of 2023 with total PoPs reaching nearly 40,000 and growing 7% year-on-year. INWIT's mission is to deliver an efficient solution to the ongoing upgrade to 5G. And this means both new PoPs and to existing on New Sites and the continuous effort to optimize the grid on existing sites. Contractual commitments are the main driver of this growth and with nearly 14,000 new PoPs added this year. We are progressing in line with our full year target. Moving on to OLOs on Page 7. We see that hospitalities with other clients were up significantly, plus 17% year-on-year for a total of nearly 13,000 PoPs at the end of June among the best trends in the industry. We added 410 new PoPs in the quarter, an improvement as compared with Q1 and still a bit below the yearly run rate.
In terms of mix, we added new hospitalities with every client category, including MNOs, where the potential is limited by the remedies, process, and dispute. While demand from some FWA clients was soft due to specific developments. Other clients supported volumes, in particularly in Utility segments. INWIT business model is based on hospitality services to multiple client categories and technologies from mobile to FWA and IoT. Growing mobile data use needs for better coverage and the emergence of new use cases confirm our positive structural outlook for the market.
Next, on Page 8, we review New Services. New Services were up 45% year-on-year, outpacing the rest of the business and reaching EUR 11.5 million in the quarter. This compares with only EUR 3.4 million 2 years ago. The business expanded more than 3x in 2 years mostly on the back of increase in the coverage services through DAS, distributed antenna system and highway tunnel connectivity. This will continue to be a key growth driver for the Business Plan to 2026.
INWIT micro grid asset nearly 8,000 remote units and 1,000 kilometers of road tunnels and multi-tunnel solutions that provide connectivity and capacity in indoor and in traffic locations. They will become even more important with our pervasive distribution of standalone 5G. Demand is growing. In the first half of 2023, we added about 130 new locations in a variety of verticals, in particular in the public administration, leisure, transportation and healthcare. Some of the notification flagship locations include luxury hotels, important transportation hubs and the iconic museums. Moving on to the P&L on Page 9. Quarterly revenues were up to EUR 237.6 million, up 12.8% year-on-year and plus EUR 4 million as compared with Q1 2023 supported by the CPI link of our contracts where the MSAs has no cap. The run rate benefits from growing volumes of hospitalities with all clients, anchors and OLOs on a year-on-year basis, we booked fewer other revenues such as installation, maintenance and technical services, which limited the overall trend in our second revenue reporting line. This is broadly in line with our expectations and will normalize over the course of the year. As mentioned, New Services were up materially plus 45% and plus EUR 3.6 million year-on-year.
With regards to costs, OpEx were up year-on-year, plus 12.2%, in line with revenues also discounting accelerated phasing of maintenance. This resulted in an EBITDA margin of 91%, in line with guidance. Below the EBITDA line, we booked higher D&A in line with our CapEx cycle, higher interest driven by the variable portion of our debt position and higher taxes in line with the phasing of the tax scheme entered into. Including these effects, a relevant portion of which are noncash. Net income was up 9% to about EUR 81 million. Finally, ground lease cost went over efficiently in real estate more than offset the higher number of sites and/or projects as well as inflation, driving EBITDAaL margin up 2.4 points year-on-year. On Slide 10, we'll discuss Cash Flow. Cash flow generation in the second quarter was up materially year-on-year with recurring free cash flow at about EUR 187 million. On a 6-month basis, approximately EUR 324 million. We added more than 50% of 2023 guidance. We had minor cash outlays for recurring CapEx, EUR 3.9 million and tax, EUR 4.8 million. As anticipated in Q1, we recorded sequentially better trends in lease costs and net working capital. [ Within the sales ], the EUR 37 million positive net working capital figure was related to efficiency actions linked to legacy items with a number of clients. This positive effect will not materially reverse in the coming quarters, contributing to our full year guidance. Total CapEx was about EUR 60 million in the quarter up from about EUR 39 million in the second quarter of 2022, mostly due to a higher volume of New Sites. Moving to the balance sheet. The financial position was up quarter-on-quarter to EUR 4.3 billion, including IFRS 16 liabilities. Net debt to EBITDA moved up to 5x from 4.7x at the end of March, essentially due to dividend payments. When comparing end of June leverage in 2023 and 2022, we can appreciate INWIT's ability to quickly deliver 0.6x leverage turns in a year. Our debt profile continues to be efficient. Cost of debt remained low at 2.4%, more than 75% of debt is fixed, and we do not have any relevant maturities before 2025 with the expiry of a term loan for EUR 700 million. We are mindful of the importance of capital allocation for any business infrastructure in particular. In the coming months, we will continue the buyback program and look for opportunity to deploying more CapEx at attractive returns. With this, I thank you, and I'll leave the floor to get to Diego.
Thank you, Emilia. Before some concluding remarks, I'm pleased to share an update on the sustainability plan as we do on a semiannual basis. Sustainability sits at the core of what INWIT does, sharing infrastructure so that there is less duplication and better use of resources, as evidenced by a growing tenancy ratio, connecting communities to high-speed networks. We added 140 PoPs in wide and vulnerable areas in the first half of the year.
And in certain cases, enabling innovative services, which directly protect the environment and its biodiversity, such as smart sensors in national parks. We set ambitious targets in terms of reduction of environmental footprint and choose to have them validated by highly regarded international bodies. This has been progressively reflected in improving ESG rating and in entering the most important indices, such as the FTSE4Good. Looking ahead, we will be carbon neutral by 2024 and net zero by 2030, while fostering the widespread adoption of broadband connectivity in a sustainable way. A few more words on Page 12. Our business plan aims to make INWIT structurally stronger. We invest at attractive returns to grow the asset base more macro sites, a nationwide network of DAS indoor locations and a growing proportion of land ownership. We do this with a renewed focus on industrial processes, able to manage the growing complexity scale of the company and enhance commercial capabilities on the micro grid where we are building momentum more clients, more sales channels, innovative service proposition. In industrial context where clients are focused on efficiency and improving returns, we stand as a source of efficiency and a trusted industrial partner. With this, I thank you, and we are now ready for the Q&A session.
[Operator Instructions] The first question is from Andrew Lee of Goldman Sachs.
Your results show clearly continued strong delivery. So I just wanted to ask a question about kind of potential risks to the underlying delivery and just taking into account the recent M&A in the Italian space and more broadly. So just first question, the basic question is, have you seen any change in behavior following EQT's Wind Tre active equipment acquisition or suggestions of changing behavior, potentially more actively pursuing sharing equipment and putting downward pressure risk on tenancy long term?
I'm also minded that EQT bought Radius in the U.S., which has had some modest success in Europe in terms of consolidating landlord sites. So just wondered if you've seen any kind of increase in efforts to consolidate sites given that some of this -- this activity could focus initially on Italy?
Andrew. In terms of market, we -- no, we don't see any significant change in the market coming from the Wind Tre transaction operation in general. We do see that transaction that structure going into the direction clearly of a separation between service company and infra company, which is, we think, something which makes sense over time and is consistent with our view for the medium, long term for also tower companies get into a broader space and extending the perimeter also broadly and on top of the passive equipment gradually towards managing also the active equipment. We don't see it in the short time, but we do think it's a rational opportunity for the industry over medium, long term. With regards to landlord as well no significant change. We continue to pursue our targets of continuous efficiency through both renegotiation as well as buying of land. We made good progress also in this quarter, and we are progressing towards the target of achieving 20% of land owned by the end of 2026.
That's really helpful. So no change in pace at your ability to kind of buy in that land?
No, no, no.
The next question is from Roshan Ranjit of Deutsche Bank.
I've got 2, please. Thanks for the extra detail on Slide 5 with the New Sites. So just -- so to make sure I understand it correctly. You're saying that this quarter, you had 55 New Sites from a combination of the next-gen EU fund and Open Fiber agreement. So firstly, can I check that's right? And secondly, how should we expect that to trend in the second half of the year, please?
And my second question is on the working cap. So you highlighted a big positive this quarter, which, if I hope correctly, I think you said will continue or should rather carry forward to the end of the year? You've reiterated your recurring free cash flow guidance for the full year. So should we -- did you anticipate this big working cap gain? Or are there any other kind of drags which this working cap gain will offset for the full year?
Roshan on Slide 5. Yes, we made in the quarter 170 sites for the MSA programs with Anchor and 55 in relation to the other program. So we started the next EU -- next-generation EU and picking up also on the Open Fiber program. And we do expect to continue a good base for this quarter -- next quarter. So we will see similar numbers for the next quarter. So we will end up the fiscal year with broadly overall 800 New Sites in the fiscal year.
Concerning the net working capital trend and the recurring free cash flow. Yes, as already anticipated in Q1, we anticipated the reversion of the negative net working capital. We -- this positive trend, positive move in the quarter is structural. So we do not expect to reverse it in the coming quarters. And going forward, we do expect a continued trend of strong recurring cash flow supported by ongoing EBITDA growth, lower recurring CapEx in the order of 2% to 3% of sales, be relatively low cost of debt, efficient tax payment and ground lease costs that will be stable or almost in line with this quarter.
The next question is from Jakob Bluestone of Exane BNP.
I have 2 questions, please. Firstly, can you maybe just provide a little bit more color around the outlook for FWA revenues given there's obviously some changes happening within some of those players? So do you think that might slow down? And if so, is that -- can you maybe just remind us how much lower the revenues for FWA or tenants are versus sort of MNOs? And then secondly, I think you made some comments around OpEx phasing within the year. So if you can maybe just clarify what are those OpEx phasing elements that we need to bear in mind for this year? It sounds like you had some additional maintenance costs this quarter, which maybe don't recur later in the year. So if you can maybe just clarify.
Yes. Thanks for the question, Jakob. On fixed wireless access, yes, pricing is overall 1/3 of an MNO mobile tenant. In terms of trend, we do see the market soft right now with specific customers. We remain positive on the structural business and structural opportunity. So we do expect some recovery and coming back to more sustained level. Generally, I have to say half 2 is better than half 1. So as I said, relatively soft right now. We do expect some improvement in half 2. And structurally, we continue to see it in -- the opportunity in the market because the technology is a valid alternative to fiber.
In broader terms, let me say that this conversation brings me also to other conversation last year and it takes me to the point about the fact that we have multiple sources of revenues and multiple source of tenants. So for instance, in this quarter, we do see very good performance on the other customers, such as utilities companies. So it's, again, a situation where we are -- we have the opportunity to compensate some low performance on one side with better performance on other sides. In this case, the -- so volume-wise, it's good that we are -- we keep our trend at above more than 1,000 tenants with OLOs per quarter. Clearly, we tell it to be the impact of price mix because the Other customers have price per unit lower than the fixed wireless -- fixed wireless access, so yes.
Jakob. As mentioned, OpEx in the quarter, we're discounting some phasing impact due to accelerated maintenance. But overall, on a full year basis, we confirm our guidance in terms of EBITDA margin at 91%.
Got it. If I can maybe just ask a follow-up question just in terms of the sort of mix. So I mean, from what you've described this quarter, your New Services growth grew quite a bit sequentially, first time in double digits, while your OLO revenues are down, I think, for the second quarter in a row. Can you maybe just comment on what is the margin difference between those 2 revenue streams? So is there any margin effects that we should think about as perhaps the mix shift a little bit away from OLO to New Services?
Yes, the -- on the OLOs, let me also highlight that the quarter-on-quarter trend is mostly driven by the Other Services kind of installation, maintenance, project management that the more volatile bit where we have seen less, less potential, less and less business than last year that was quite high. The -- in terms of mix between tenants and the new businesses. Let me say that clearly new tenants on existing sites is the business line with the highest margin, almost everything goes down to bottom line. When we develop new services, margins are still high and broadly in line with our EBITDA margin actually higher than our average EBITDA margin. So clearly, not as good as a new tenant on existing sites, but on the high side is still clearly quite high.
The next question is from Fabio Pavan of Mediobanca.
Yes. I would love to go back to the New Services, in particular I was surprised by the strong acceleration in the development of DAS in the quarter, which was super strong. Could you just provide some more color on this? It was in line with your expectation, which kind of number, which we should expect for the next few quarters?
Yes. Fabio. The new businesses for us is a strategic priority. We strongly believe on the 2 legs of our growth plan, one is macro grid, which will be complemented by micro grid. And in Italy, mostly indoor, in Italy, there is a huge number of indoor locations, which requires and deserves better indoor coverage. And we actually -- we have been leading the market since the beginning. We are putting additional effort to capture this opportunity in verticals such as health and hospitals, education, travel and transportation.
We have also strengthened internal capabilities and the commercial resources, and this is delivering the results expected. And we do expect to accelerate further coming, as I said, by the initiatives we put in place. And we are working with both the MNOs as final customer as well as with the location owners, which, in some cases, are so willing to improve the indoor coverage that are also paying parties, so they are willing and open and happy to contribute or to pay for the service. We -- in the targeted plan, we shared the goal to actually to deliver by 2026 an amount of revenue, which will be 3x the 2022 revenues, which was EUR 30 million. And we think we are on track. And we are building all the capabilities and the trajectory to get to that level.
The next question is from Stefano Gamberini of Equita.
Three quick questions, if I may, from my side. The first is the topic of the rising of electromagnetic pollution limits still on the table or the political agenda or definitively out. The second, do you have some novelties about M&A dossier? Do you have something on your table, something is changing on the market and so we could expect some small acquisition as you have in your Business Plan targets by year end? And finally, just a clarification about the OLOs target. If I understood correct that you expect to reach around 1,000 OLOs in the second part of the year? Or this is just a target in order to reach your growth of 2026 and will be reached probably later on?
Stefano, thanks for the question. On the EMF, yes. No, the topic is still on the table of the government. The government is well aware of the topic. And yes, it's on the table. I would say, actively on the table, let's see what will happen, difficult to make forecast, no clear visibility of the next steps. But yes, I would say, absolutely on the table.
On the M&A, yes, we constantly also assess a small bolt-on, the opportunity to broaden the perimeter to acquire part of sites. And clearly, we keep on looking at land and part of lands. So yes, we monitor, we assess and we are open, and we would like to make some small bolt-on to broaden quickly in a rapid manner our perimeters. With regards to the OLO and OLO trends, the -- we have the 1,000 -- sorry, I was before I probably made the -- made confusion on the OLO, we have a run rate of broadly 400 to 500 tenants per quarter, and this is what we expect to keep to year end.
The next question is from Usman Ghazi of Berenberg.
I've got 2 questions, please. The first one is on tax. Obviously, you've highlighted that for the full year, you'll come in quite below the EUR 35 million that you were planning at the start of the year. I can also see that in the cash flow, there's a EUR 14 million kind of payment or advanced payment made for the goodwill treatment. So I just wanted -- sorry, with the goodwill tax prepayment. So I just wanted to check if anything has changed with respect to your kind of tax outlook that you gave at the Capital Markets Day? Or is it that there's just a bit less tax in this year, and there's going to be a catch-up in 2024? So that was the first question.
And then my -- the second question was just going to the site additions that you've done, obviously, very strong number in Q2 and you're guiding to do 800 this year. I mean, if you keep this kind of run rate, you're probably a year ahead of your site build-out target that you gave at the CMD, right? So you'd probably be done well inside 2026. Is this possible? Or do you expect that this year, for some reason, is it weaker then things kind of begin to moderate back to normal levels next year?
Usman. Yes, the EUR 14 million are related to the goodwill tax payment and are in line with our expectations. While the -- let's say, the cash out for tax above recurring free cash flow slightly below -- lower than our expectations. So we do expect this level to remain low on full-year basis.
On New Sites, honestly, we are satisfied with the [ connection ] speed that we have achieved. Q2 is a strong quarter. Q1 was strong as well. Q4 last year was strong. So now we have really strong track record and delivery machine though we cannot yet say that we are ahead of plan. Hopefully, we will get there because actually, just let me clarify the 800, I did mention is a combination of the slightly less than 600 for the MSA, which we guided explicitly for and the broadly 200 related to the other 2 programs, the Open Fiber and the next-generation EU. So the current delivery is solid, is robust. We're very happy and overall in line with the Business Plan.
Right. Can I just clarify on the tax? So you're saying that this year is going to be EUR 20 million. And next year, it will be similar? Or will there be this difference between what you had planned of EUR 35 million versus the EUR 20 million that you will pay this year that there will be a catch-up of that in 2024?
We do expect, let's say, on full year 2023, we do expect about EUR 20 million to be a fair assumption, but we do expect this amount to grow starting from next year.
The next question is from Luigi Minerva of HSBC.
Thanks for taking my 2 questions. The first is a clarification on the 55 New Sites from the other BTS programs. Should we model these with 1 tenancy ratio or some of them come with more than 1 tenant? And secondly, on capital allocation. Obviously, in this quarter, you reached 5x leverage ratio. In the past, you mentioned consistently that a leverage ratio below 5x is inefficient. So I just wanted to check whether that is still your assessment? And perhaps if you can remind us your capital allocation priorities once the leverage ratio falls further?
Yes. On the 55, yes, the tenancy ratio will be below 2 something higher than 1. The next-generation EU funds will be broadly 2. The other -- the Open Fiber will be at least at the beginning 1. This is in terms of tenancy ratio. Let me say that the price or the revenue per unit will be consistent with the specific programs. So in particular, in the next generation EU funds, the price per unit will be lower than average.
On the leverage, yes, we -- clearly, we set the threshold event for the leverage between 5 to 5.5x in the overall framework of the capital allocation. The environment has not changed. We see this impact -- a reasonable level. And as always, we will keep on being consistent with our capital allocation framework. So we will assess opportunity having as a first priority, additional growth CapEx, then secondly, additional small acquisition bolt-ons as we talked. We keep on monitoring on bigger acquisition if opportunity comes. If -- otherwise, we will consider the additional shareholder moderation as we did last year.
The next question is from David Guarino of Green Street.
Just wanted to kind of follow up on the last question on the New Sites from the BTS program. Could you maybe also comment on obviously lower tenancy, but what are the day 1 returns on those New Sites? And then also attached to that, were those New Sites from BTS programs included in the long-term business plan you presented back in March?
Yes, the next-generation EU fund, the -- there will be a subsidy on CapEx. So the returns will be in the range of 10%, slightly below 10% though the return is related to the net CapEx. So we will see, yes, lower revenues than usual. And this is for the first 10 years. After 10 years, the size clearly will remain of INWIT ownership and then will be marketed after, let me say, if market is under market prices.
Okay. That's helpful. And then switching topics on the share buyback program. It looks like -- I know we're early on, but you've been repurchasing a similar amount of shares each week. Is this something we should anticipate going forward more of a systematic approach? Or do you think there might be some variability in terms of your repurchase activity?
Yes. Let me say that we followed -- we decided approach to assign the mandates of -- to a broker. And so we are [ on top ] on this. Clearly, the framework is the 9-month period. What we do see is, yes, it's a pace -- is a stable pace. Obviously, we don't see any specific reason to see this changed. But as I said, it's up to the broker.
The next question is from Ben Rickett of New Street Research.
Two questions, please. Firstly, going back to the fixed wireless access demand. On Slide 7, you mentioned the structural demand tailwinds. I just wondered if you could provide some color as to what those tailwinds are. Is that rural fiber deployments? Or is it competition from Telecom Italia or any context there would be helpful?
And then second question, following on from that. As you look forward to your OLO tenant net adds. How should we think about the mix there between the fixed wireless access, MNOs, and also Other? I think in the past, you've said fixed wireless access and Other would be 80%. But how does that split between fixed wireless access and Other?
Fixed wireless access we do see it has a valid and market sees it has a valid alternative to Fiber, is a business which has developed quite well, starting from the COVID days, and it's a business which has been driven by specific companies dedicated to this service, which developed it quite well and has been very well received by customers considering the nature of the Italian territory and the number of places where Fiber or high-speed connectivity is not yet available. So it's a combination of technology as well customer service which has proven to be successful in Italy and by the way, the technology keeps on improving also in terms of performance.
Now that's why we remain with a positive structural view. Having said that, we see in our numbers, and we see the market is relatively soft, specifically with a couple of customers, but we do think it's more related to contingent specific situations. In terms of mix, we -- of all of tenants, the MNOs component, which we know is the richest has broadly a 15% weight to the remaining 80% plus is for the Others, different from MNOs. And within this, in the last couple of quarters, broadly 50% has been related to Other customers and 50% to fixed wireless access customers.
The next question is from Georgios Ierodiaconou of Citi.
The first one, Diego, is around the Gigabit Infrastructure Act. I know it's in draft stages at this point, but it would be interesting to get your reaction and opinions on it and also some of the other tower companies have been a bit critical of some of the recommendations within the draft.
My second question is on working capital. I know it was asked earlier about this year, but I'm curious whether there could be inflows in the coming years as well or whether it's something that just proves temporary for 2023? And if you can give us an indication as to what's driving that will be great.
And then the final one is just a follow-up also on the New Sites for the non-anchors? You mentioned the initial tenancy ratios, and I'm guessing that these sites are available for others to colocate. Do you expect to see demand? How long do you think it would take before you see it? And I was also curious whether there's any restrictions in you making them available initially?
Yes. On the global -- George, on the global infrastructure act actually on the Gigabit Infrastructure Act, actually, there was some areas of concerns in the first draft. We think that the following drafts have gone in the right direction and we think that the potential concerns are been -- we do see them greatly addressed in the developments. So at this stage for us is not an area -- an area of concern. We're also thinking about the spirit of the act, which is actually to foster -- to support the development of connectivity and so the development of services, which companies such as our and tower companies do deliver. The -- I go to the third one, which is related to the other BTS. Yes, no, they are open. There is no restriction. Those are new programs. So we will see shortly, it's a little bit too early to comment. Yes, we do expect other tenants as well. But let me comment with more details as soon as we understand a little bit better, and we have a little bit more visibility.
George, concerning your question about net working capital, we do expect it to remain positive in 2023. But starting from 2024, to be in the, let's say, neutral to positive net working capital impact on cash flow.
Gentlemen, there are no more questions registered at this time.
Thank you, everyone, for connecting. Have a good day.
Thank you.
Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.