Thank you, Claudia, and good afternoon, ladies and gentlemen. Good morning to those of you connecting from the United States.

Welcome everybody to the ENAV 9 Months 2020 Results Call. I'm joined here by Paolo Simioni, ENAV's CEO; and Luca Colman, ENAV's CFO, that will be running you through the formal presentation.

After that, we will be happy to answer your questions. And with that, I'll leave the floor to Paolo.

Okay. Good afternoon, ladies and gentlemen.

Welcome to another 9 months' 2020 results call. As you know, in the first 9 months of 2020, the aviation sector has been heavily impacted by COVID-19, with the service unit down 59.6% and 58.8% for en-route and terminal, respectively.

After the lockdown, when the traffic was down approximately 90%, we saw traffic volumes recovering during the summer season, with September traffic trending at minus 60.1% year-on-year. Second wave of COVID-19 currently afflicting Italy and Europe has halted this recovery leaving October traffic at approximately minus 60% year-on-year.

Despite this challenging environment in which we are operating and the lockdown measures undertaking in Italy from March to May, we keep full business continuity and at the same time, we took care on the health and safety of our employees. Let's focus now on our 9-month 2020 financial results.

As you may see, the net revenue decreased by 14.8% year-on-year from EUR 691.3 million to EUR 589.1 million, despite a 62.6% year-on-year decline in revenue from operations, largely offset by a positive balance, which includes our best estimate on the effect of the temporary derogation to the performance regulation proposed in July and published the 4th November by the European Commission for 2020 and 2021. In the first 9 months of 2020, we were able to offset a large part of the EUR 102.3 million net revenue decline, thanks to several cost efficiency measures put in place, leading to EUR 175.7 million EBITDA, down EUR 61.2 million or 25.8% year-on-year.

EBITDA margin stood at 29.8%. Notwithstanding the revenue decline, we closed the first 9 months 2020 with a net profit of EUR 55.3 million compared with EUR 98.8 million achieved in the same period last year.

This -- thanks to the efficiency measures put in place and the solid traffic risk-sharing mechanism. CapEx was EUR 47.4 million, that means 12.1% lower than 2019.

As you see -- as you will see later in the presentation and as well to deal with the COVID-19 dramatic situation, thanks to a solid balance sheet and a strong liquidity profile further enhanced by 2 new ESG-linked term loans recently signed for a total amount of EUR 150 million. Let's move on the Slide 2, to look at the traffic trend recorded in the first 9 months of 2020.

En-route service unit decreased 59.6% year-on-year, reflecting the effect of the COVID-19 pandemic. This decline is combined effect of a very strong growth in traffic experienced in January and February, while service unit growth was 8.5% and 11.2%, followed by a sharp slide in March, reaching a 90% decline in April and May, a recovery started in June until the end of September, which saw a year-over-year decline approximately 60%.

It's worth noting that within en-route, the largest percentage decline over last year was related to international flights, with national traffic and our flights recording a less severe decrease. You can see the traffic splitting the upper right on the slide, a slight account for 20 -- for 42% of total traffic, international for 36% and national for 22%.

To be noted also that traffic decrease in Italy in the first 9 months of the year was in line with the other major European countries performance. As a core for en-route, terminal traffic was also severely hit by COVID-19 pandemic, showing the service units decrease of 58.8%.

All 3 charging zones were impacted with Terminal Zone 1, having the largest percentage decrease year-over-year, followed by Terminal Zone 3 and Terminal Zone 2. As already said, in the second wave of COVID-19, currently afflicting Italy and Europe has halted the traffic recovery leaving October traffic in line with the first 9 months of 2020 at approximately minus 60% year-on-year.

Looking on Slide 3, as already said in the highlights, we can see net revenue decreasing by 14.8% year-on-year from EUR 691.3 million to EUR 589.1 million, due to a 62.6% decline in revenue from operations, largely offset by a positive balance amounting to EUR 286.7 million. We saw a material decrease in both en-route and terminal revenue, down 65.5% and 63.4%, respectively, mainly as a result of the COVID-19 pandemic, combined with a lower 2020 tariffs versus last year.

It's worth highlighting that the just mentioned positive balance posted in our first 9 months 2020 accounts was mainly driving by materially lower-than-forecasted traffic for both en-route and terminal and includes our best estimate on the impact of the European Commission New Regulation on temporary derogation to RP3 performance schemes for 2020 and 2021, approved November 4. As we know, the derogation indirectly poses a cap of the amount balance that can be recovered by the service provider over these 2 years in order to help the air traffic sector in such a difficult scenario.

This investments made is built on our assumption of a reduction of ENAV's total actual determinated cost of 2019 to be applied to the cost recoverable in the tariff of 2020, assuming a recovery over 5 years starting from 2023 of the capital balance accumulated in 2020 and 2021. Nonregulated business in 9 months 2020 almost doubled year-over-year, reaching EUR 16.4 million, mainly driven by revenue from IDS AirNav that was not consolidated in the first 6 months of 2019.

Finally, other operating income was EUR 26.4 million -- excuse me, EUR 26.4 million compared to EUR 29.4 million recorded in the same period of last year, mainly due to a lower level of EU-funded projects. Moving now on Slide 4.

We can see that in the first 9 months 2020, we continue to deliver on our cost efficiency plan to offset as much as possible the revenue decline and reduce our cash bond. Overall, we were able to reduce total cost by 9% year-on-year at EUR 413.4 million.

As shown in the graph in the first 9 months, we -- of the year, we recorded a 10% year-on-year equal to EUR 10 million external cost savings, driven by lower utilities and telecommunication costs resulting from the lower consumption in our facilities for most administrative staff and smart working from March onwards, the lower costs related to our full IT digital network, the lower cost SGA and business trade costs coming -- from the reduced mobility coming from COVID-19 countermeasures undertaken. This meaningful reduction were partly cut or balanced by higher cost for external services linked to COVID-19 specific initiative undertaken by the company, including the extraordinary sanitization of our facilities.

It's worth noting that the external cost savings, excluding the impact of IDS AirNav, which was not consolidated in the first half of 2019, would have been a material 14.2% on a like-for-like basis. Personnel costs in the first 9 months decreased by 8.5% year-on-year to EUR 342.9 million.

This notable result was mainly driven by a material decrease in variable pay and social security costs, thanks to reduced overtime, especially during the summer period, and the use of outstanding vacation balances of all our personnel. The fixed salary component that increased 2.1% year-on-year due to mainly the inclusion of IDS AirNav employees, not included in the first half of 2019, coupled with 2019 labor contract renewal.

Also, here, it's worth noting that excluding IDS AirNav, personnel costs would have decreased by a material 9.8% over last year. Lastly, capitalized internal works remained stable year-over-year at EUR 20 million.

So let's move to Page 5, which summarize certain developments occurred in the first 9 months of this year. As you know, ENAV has undertaken several measures to cope with the consequences of COVID-19 and had -- and will have on the aviation sector for 2020 and beyond.

Eurocontrol and most of this -- of its member states agreed to postpone payment of traffic charges due by airlines to ASPs related to the period of February, May 2020 from November 2020 onwards. The aim was to allow airlines to deal with the liquidity issues they are facing.

As shown in the slide, February 2020 invoice will be cash-in, in this month, while March, April and May payments will be postponed to 2021. However, it's worth noting that in April and May, traffic was down approximately 90%, which means a minimal impact on cash flow of roughly EUR 35 million in total for the 3 months from March to May.

Starting from the traffic flow in June, the normal 2-month billing and settlement cycle has been restated and receivables from airlines have been cashed in regularly. Let's turn to Slide 6, where you can find a summary of the regulation status.

As you will recall, the RP3 regulatory framework was approved in January 2019, and the EU-wide cost efficiency targets were set in May 2019. Based on this framework and targets, each country submitted its performance plan for RP3 at the end of 2019.

The approval by European Commission of country-specific performance plans for RP, originally scheduled for May 2020, was put on hold due to the current pandemic. In July 2020, the European Commission published a proposal that has been approved on the 4th November for the temporary derogation to single sky (sic) [Single European Sky] performance and charging scheme, allowing for special rules for setting -- for the setting of revised union-wide performance targets for 2020 and 2021 in order to mitigate the impact of COVID-19 pandemic and ensure the long-term viability of the segment.

Based on this proposal, the commission expects the National Supervisory Authority to provide us data and information about traffic forecast for the third preference period by December 2020, as the input for the setting of the revised union-wide performance target for RP3. Then the commission should adopt the revised performance target for RP3 within May 2021.

Later, the National Supervisory Authorities should submit the new RP3 performance plan up to 2024 to the commission within October 2021. Finally, the commission should approve the RP3 performance plan by year-end 2021 or in the first half of 2022.

Let me now pass the floor to Luca to detail the view of the 9-months 2020 financials.

Okay. Thank you, Paolo.

As you can see on Slide 8, ENAV net revenue in the first 9 months of the year decreased by 14.8% year-on-year, driven by negative performance in both en-route and terminal revenue, which were largely offset by a positive balance. Within the revenue from operations, the largest decline year-over-year came from the en-route [ to company ], which decreased EUR 354.4 million, while terminal revenue went down by EUR 113.3 million.

Both performance were mainly caused by COVID-19 pandemic, coupled with lower tariff supplied in 2020 on both en-route and terminal. The year-over-year increase in balance of EUR 362.6 million over 9 months 2019, offset a substantial part of the decrease in revenue from operations.

As previously mentioned by Paolo, the balance recorded in the first 9 months of 2020, was defined as the best estimate by the company on the new rules published on November 4, by European Commission with regards to the temporary derogation for 2020 and 2021 to the Single European Sky performance and charging scheme of RP3. Thanks to our relentless focus on the cost optimization, we managed to contain to EUR 61.3 million, the EBITDA decline, despite the EUR 102.3 million reduction in the top line.

EBITDA for the first 9 months' 2020 came at EUR 175.7 million, with an EBITDA margin of 29.8%. Looking at the below EBITDA items in the P&L on Slide 9, you can see as D&A remained stable year-over-year at approximately EUR 95 million.

Provisions and write-downs in the first 9 months of 2020 grew to EUR 3.7 million due to the application of valuation model utilized to measure the recoverability of receivables in light of the current issues faced by the air traffic sector. This is purely a prudential accounting approach since, as mentioned before, we do not have any issue with the receipt of payment used so far that were fully cash-in.

The item net financial income and expenses increased to EUR 4.4 million in the first 9 months of 2020 compared to the EUR 3.1 million recorded in the same period last year, mainly due to the balance of provision. Moving on to income taxes for the period, the material decrease was driven by lower taxable income and by the positive impact of the deferred taxes, for the larger part related to the balance actualization.

As a result of the bold movements, we were able to have a net profit of EUR 55.1 million in the first 9 months of 2020, despite the severe impact of the rev -- on the revenue caused by COVID-19. In the last slide, let's have a closer look at our cash flow and financial position.

ENAV's liquidity and financial position remains solid. In addition to the cash available at the end of September 2020 of EUR 156 million, we also have a financial investment for EUR 25 million and undrawn credit lines for EUR 297.5 million.

Our net financial position as of September 30, decreased by EUR 355 million compared with the end of the last year, reaching a net debt of EUR 228 million, mainly due to the lower cash income caused by the sharp decline in traffic and the postponement of receivables due from airlines, as well as the payment in May of dividends for EUR 112.1 million. We note that en-route and terminal charge from June onwards has been cashed in regularly, which means that within the normal 2-month billing and settlement cycle.

On the cost side, we have reduced our average cost run rate from approximately EUR 50 million per month, to EUR 45 million per month, thanks to further cost-cutting initiatives. We also have 2 additional liquidity buffer coming from the postponement of EUR 40 million CapEx and the new ESG-linked term loans for a total EUR 150 million, signed at the end of October 2020.

With regards to CapEx, as already said in the past, on a 2020 full year basis, we expect to set approximately EUR 80 million compared to the break of the expectation of EUR 120 million. Finally, I would like to highlight that we have no material debt maturities until 2022.

With that, we are now ready to answer your questions.

The first one is on the derogation to the regulatory framework approved by the European Commission. I wonder if the impact of potential EUR 65 million to EUR 70 million you provided in September is confirmed, also considering the recent downturn in the traffic evolution of these days?

Second question is still related to this derogation. Would you say that the EUR 65 million to EUR 70 million is also a good proxy of the reduction in operating costs you may achieve in 2020?

And final question, I'm wondering if there has been any internal discussion or reasoning that you may be able to disclose on the dividend?

Okay. Talking about the derogation, yes, I confirm, at the moment, our forecast of EUR 65 million to EUR 70 million of hard cut for what concern the balance could be a good proxy of the one we will have at the end of the year 2020.

Even if the traffic is decreasing -- even if, at the moment, the traffic that we are reducing, I mean, that we are recording, is not so bad as what we can hear from other operators. In this month, we are -- in the last month of October, we were around 60% decrease versus 2019, so still in line with what we had in September.

Let's see what will happen in the next month, but yes, I confirm also because the derogation, just to be more clear on that answer, I guess, we'll also add to the second question that you asked. As for 2020, 2021 -- into 2021, will be kind of -- it's a kind of a cost recovery with the cap of the costs that are eligible in the tariff that they have to be lower than 2019 level.

If we reduce costs even more, they will not impact the balance. So the balance will be the one we told you.

And more or less, our cost reduction will be not at this level. We will not be able to reach this level of cost reduction, for the level, I mean, the level of hard cap for the balance.

Regarding the dividend matter, the current as we all see, remains very vulnerable, especially given the second wave of COVID-19 currently ongoing in Europe. And it's now difficult to have a clear position on dividends for next year.

We will continue to monitor our cash flows and to evaluation of the business in the coming months. And based on this, we will discuss the traffic with the Board that capital -- the 2020 financials.

As already stated in the past, in any case, I confirm that in general terms, I'm in favor to company providing another great return on its shareholder like ENAV as always, but ensuring that this doesn't stress the medium-term prospect of the company.

I have a different question. The first one on the regulation.

So last November, the European Commission approved the draft published last July. So can you update us on the ongoing negotiation, how does it affect the negotiation, the traffic is not recovering, given this second wave?

Can the news about the vaccine somehow affect this traffic for the cash flow for 2021 and beyond? And are you more or less optimistic that you can achieve a recognized cost level similar to the pre-pandemic level?

The second question regarding the cash flow. So payments due from airlines in the period February, May, have been shifted due to the liquidity difficulties encountered by airlines a few months ago.

Given the current traffic trend, do you expect the airlines will ask for another postponement of payments? The third question is on the cost.

If the traffic situation does not improve significantly, do you think faster cost efficiency action are possible? And the fourth question is on the net financial position.

Can you provide us an indication of the net financial position expected by year-end and tax rate for 2020? My last question is if, you have an idea on when do you expect to present the new business plan for the market?

Luigi, long list of questions, five if I put together. So the first one was about the negotiation and the level of costs and so on the level of traffic.

So in general term, let's see that the negotiation now has been focused till a couple of weeks ago to the -- to close the new regulation framework. So with the published -- when the European Commission published last November 4, the new regulation for us, that was a very important first step.

In that first step, we actually found everything we expected to find. So we work together with our national authorities to be sure that this could be driven in the correct and the right way for our -- for [ Italian ] interest in general.

So looking at the general environment, we have satisfied with what's happened here. So there's nothing that could exclude or reach at that level.

So saying that now as before the CIO said, the next step would be the single -- every state has to present -- sorry, the first draft of planning, the cost, the planning and traffic planning within the 15th of December. On the base of that, the European Commission will take the -- we will try -- no try, we will propose some targets, cost efficiency target, that will be discussed and agreed with state within the 1st of November 2021.

The level of traffic that we assume to take is the one that Eurocontrol published just a couple days ago. They showed 3 scenarios.

On these 3 scenarios, what we -- what their control is seeing is to take the page one, the middle one, so the second scenario. So you may find this information on the Eurocontrol website, and we are using that one.

You will find that page -- scenario one is, I would say, the best scenario, the medium scenario and worse scenario. Talking about overall liquidity, we don't foresee at the moment to have other, I would say, postponement of payment from the airline.

We just had a talk with Eurocontrol yesterday about how is the payment of February. As you remember, we stopped for 4 months our billing and our cash-in cycle.

November is supposed to be the month where we should cash in the February traffic that was billed in April. At the moment, Eurocontrol can see that this is happening.

It is the very first day of the month. So it's not still -- we are not still able to understand if the payment will be full.

But in general terms, Eurocontrol can see that this is happening. So we will -- we could be more precise by 20 of the month -- 20th of November, where we could understand is the amount of money is not what we expect.

But at the moment, I still -- I mean, we feel that is okay. For what concern, the final net debt at the end of the year.

Let's say that we didn't give any disclosure on that but, in general term, if you look at the position that we are now, there would be a little bit lower, I mean, worse in some way. So -- but not so much, actually.

So this is by the end of 2020. I guess, we -- I said everything.

I'll leave the floor to Paolo for your last question.

Yes. Strategic plan, we kicked off a review of our strategic plan 2020, 2024 at the end of September.

And together with the management team and our consultant, we expect to have the new plan at the beginning of 2021. Let me say, however, that our strategic plan will depend on the targets that the European Commission will set in the mid of 2021.

As such, we have not planned at work -- at Investor Day to present the new plan, and we will only officially communicate our targets after we have a clear indication from the European Commission. So in terms of business initiatives, our updated strategic plan will maintain continuity with regards to the core activities, including previous one.

And we will include new elements that we provide a new lead to the company. This is the [ context ].

A couple for me. So you obviously mentioned that you saw a EUR 65 million, EUR 70 million headwind as a result of the temporary derogation.

So just a few kind of questions around that, really. I mean, firstly, is that as a result of the determined unit costs being applied in 2020 and 2021 being lower than what you previously expected?

And if so, if you -- any idea you can give us about what that determined unit cost was would be very helpful. Secondly, does it relate in any way to concerns about your ability to actually utilize that balance?

And in particular, whether you're going to be able to charge the airlines the necessary some actual tariff to be able to do that? And then the -- yes.

So that's for now.

Okay. So fourth quarter, the account -- we confirm what we said before, we believe that could be a good proxy of what will be the haircut by the end of the year.

For what concerns the balance, yes, still, we believe that with this new regulation, we'll have also the airline to pay when they will be to pay the balance, when they will be in a better shape. As you remember, the new regulations say that from 2023, we will start to recover for 5 years these balances.

So it will be splitting more than 1 year. So we believe we get -- I mean, we think that there would be not any problem to recover it.

So just expanding on your -- that second answer a little bit. I mean, obviously, I don't know what you have in mind for the balance receivable kind of at the end of next year or indeed at the end of the regulatory period.

But I mean, if one assumes that it's sort of EUR 500 million, EUR 600 million or so, then clearly, one would assume that tariffs are going to have to go up quite materially. And I guess my question would be, is that a reasonable way to think about it?

And secondly, how confident are you that you would actually be able to raise the traffic control tariffs on the airlines?

I guess, one of the first -- try to better explain this point. I guess it's useful also to say what the new regulation also on the airline.

From 2022, the tariff will be, let's say, reset. Even if the process of approving the performance plan will be not ended before the beginning of the 2022 year -- fiscal year, we will be able to apply the new tariff that we will present in October 2021 in the performance plan to the Proposal 1.

So this means that even in 2022, the tariff -- even there is no balance, the target will increase because the tariff -- the traffic that is planned now -- that we are planning now for 2022 is still much lower than the one that is normal is -- like in 2019. So if the tariff will increase in 2022, there will be, let me say, no more balance created in that year.

And in the future year, well, the balance for 2023, we will start to put the balance in the tariff. The traffic should be more or less in line the one we are used to have before the COVID pandemic situation.

So this happened -- in part, these tariffs will not increase -- sorry, these tariffs will not increase so much in 2022 level as we will have a substitution between the traffic that will increase and the cost that will increase by the balance [ that we input ].

Well, thank you, everybody, for joining us on this call. Thank you to Paolo and Luca.

For any further questions you may have, please don't hesitate. Feel free to follow up at the Investor Relations here in Rome.

Have a nice evening, and bye-bye to everybody.