DOM.MCDOM.MCBME
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Operator: Good morning, and welcome to the disclosures. Before starting, I would like to remind you that once the presentation is over, and as usual, we will move on to the Q&A session. [Operator Instructions] So we're going to start with the presentation. We have Mikel Barandiaran, the CEO of Dominion; and Roberto Tobillas, the Director General; and Patricia Berjon, who's the Director for Corporate Development.
Unknown Executive: Well, good morning, everybody, and many thanks for attending this call for 2025, and many thanks for being so patient, too, because we are starting somewhat later because of a technical issue. So many, many thanks, many thanks for waiting. But before talking about the figures of the year and to understand how this evolution has been in the different business areas, I think that what we should do is mention how the year 2025 has evolved and also refer to the many events that have happened at the global level that have had a direct impact on the company's evolution. And I think that compared to previous years, geopolitics has now become an ingredient that we have to take into account because we are facing a context where what is improbable has become something possible. And this global paradigmatic shift also includes other things like elections in those countries in which we have a significant presence like in Chile and the paradox that still exists in France where it's difficult to carry out structural reforms. But as regards to macroeconomic events, the most relevant ones have focused on the tariff war that was kicked off in April by the North American government and the effect that this has had for global trade. But although this has not affected the company directly, it has done so indirectly because it has affected the decision-making of some of our customers or different economic agents. And another consequence, another relevant consequence is the strong depreciation of the North American dollar, which has produced significant exchange rate differences and conversion differences in the figures of this year. And what this proves what we already observed since we presented our current strategic plan or our most recent plan, and it shows that there's more uncertainty, which is not disappearing. It's only increasing. But as regards to the strategic plan, this fiscal year of 2025 has been a year in which we have consolidated the transformation that we initiated in the previous fiscal years, and we materialized many of the objectives that we had set ourselves within the pillars of recurrence, simplification and sustainability, which are the 3 fundamental pillars of the plan. So in the year 2025, we initiated the new reporting where the businesses and environmental activities for the industry have their own strategic area structure on the Global Dominion environment. And the creation of these 2 major areas, Global Dominion Environment and the rest of the businesses under Global Dominion Tech Energy want to simplify and regroup the activities in such a way that it's easier to understand the company and also be able to value its elements. And this also means that we can work on different options to develop the strategic area of GDE, where the company has put its focus on organic and inorganic growth, which is the end result of the potential that we can see nowadays where the buildup opportunities are numerous and where the optimization of markets by geographies and activities is a fact. This process has already been addressed in the second part of 2025 with several acquisitions of companies and infrastructures, and we hope that we will add more in the short and medium term. And at the same time that we are developing greenfields in different strategic locations like the case of Tarragona and the United Arab Emirates. And finally, and as regards to the simplification process, we already made the most relevant divestitures of activities in previous fiscal years. And in the month of July, we carried out the divestment of the PV facilities we had in the Dominican Republic that has improved the balance sheet. And we also divested our activities in France where the possibilities of growth were below our objectives. And this divestment doesn't have any impact on the year's figures because this was as of December 31, but in any case, it's going to change things in 2026. But apart from the qualitative improvements, if we were to have to underscore the figures of the year, well, we are growing organically by 4% and we are doing so because both GDE as well as GDP services, in other words, the recurrent areas of the company are growing above the guidance. They're growing at levels of 6%. And this means that this year, the projects have not contributed as much as in other previous years. And we also have to underscore that the simplification of nonstrategic activities is improving our profitability. It's growing and our EBITDA over sales margin is 13.7%, which is a maximum figure for the company, a historic maximum figure. Thirdly, the depreciation of the dollar affects the balance sheet as well as our net profits and this has a one-off effect because of the correction of the divested assets in the Dominican Republic. And this one-off is EUR 18.5 million. And without that correction, our net profits would have been 10% higher compared to the figure reported in 2024. But an important thing is a strong reduction in the net financial debt, which at the end of the fiscal year is EUR 137 million, and this is 25% lower than the figure reported in '24 and 35% -- sorry, and 34% lower than the figure we saw in the first half of the year. So that means that the leverage ratio is 0.9x EBITDA. But before talking about the figures in detail, I would like to remind you that the figures for 2024 have been pro forma to be able to compare identical parameters because the divestitures are significant. And we have applied a pro forma formula. So in other words, these divestments, it's EUR 134 million and EUR 7.5 million in and EUR 5.2 million in net profits. So we are going to compare this with this figure with this pro forma figure that gives us a real snapshot of what this looks like. We've closed the year with a business figure of EUR 1,045 million, which means that an organic growth of sales of 4% with lots of inorganic growth and also growth of ForEx because ForEx has taken off 2% and inorganic growth, 11%. And although there's been a slowdown of projects whose causes that I will be describing later on in the information divided by segments. And as I said, we are growing at a very good speed over in -- especially in activities, the recurrence of GDE and GDT services and the margins are growing and EBITDA has reached a maximum figure of 13.7% of the sales, which shows that this simplification has been very handy with the divestitures of those activities that had lower margins, and we focused much more on activities and businesses that have much more profitability than are related to the environmental world. And the results of 2025, some of them stand below EBITDA, and it's important to detail this and the most important things would be a progressive reduction of financial expenses that finishes with a reduction of 8%, another EUR 2.5 million less in absolute terms. And this reduction came from the reduction of interest rates, which we expect will continue in the next quarters, motivated by 2 factors because there's been a reduction of the financial debt in our balance sheet and the normalization of the interest rates, especially in the United States, where the company also has debt denominated in dollars, interrupted operations. And well, we have the relative figures for the Cerritos wind farm and losses have been reduced by EUR 3 million compared to 2024. And this reduction is mainly due to a reduction of financial expenses associated with the funding of the wind farm and with the commissioning of it, which would generate income. And this commissioning of the wind farm was one of the necessary conditions to carry out the divestment in the infrastructure, which started in the second half of 2025. And right now, we are working on the negotiation of a PPA with different companies so that we can maximize the value of this infrastructure. And finally, this correction that has been brought about by the depreciation of the North American dollar in the assets of the Dominican Republic represent an extraordinary effect of EUR 18.5 million. So the attributable net profit is EUR 10.2 million without taking into account that one-off of EUR 18.5 million. So the figure would be EUR 28.7 million, which compared to 2024, it's a recurrent profit that is 10% higher. But let's now review -- let's review each one of the segments, each one of the business segments, starting off with Global Dominion Environment. And this segment has a turnover of EUR 472 million in the fiscal year, which is equivalent to an organic growth of 5.9%, which is nearly 6% that we mentioned before, a percentage that stands above the guidance of the strategic plan. And so this, we have to add positive in organic growth totaling 1.1% as a consequence of these acquisitions that we announced in Q3. In other words, we're talking about Ecogestion de Residuos and UREC, which is a recovery unit for water in Cartagena, which is in the area of circular economy and the German company, ZCR that operates in the area of decarbonization. But sales have had a negative impact on ForEx of about minus 3% and this area has reached a contribution margin of 10.3% of sales, which is somewhat higher compared to the figure reported in the previous fiscal year. And as mentioned on other occasions, within this area, there are different activities with very different margins. And we have those margins of circular economy that are higher than the rest. And right now, the circular economy represents 25% in the area of GDE. So as the weight of circular economy grows, the objective would be that this should reach something like 50-50, and then the margins will carry on growing. Regarding the total figures of the company, this segment, GDE accounts for 45% of our turnover and 28% of the total margin of the company. So -- and in relation to what we've already said about the strategy of the company in this area, we are working on a relevant pipeline with lots of acquisition possibilities, and we're looking for new capacities, new capabilities and a new position so that GDE can become a European reference in terms of environmental services and infrastructures. And not only that, we also have the organic development of this area, which is very significant. And I have to underscore that as regards to the circular economy, we're signing new contracts for the recovery of hydrocarbons and both in Spain and Latin America, but especially in Chile and Peru, where this activity -- where this automatic cleaning activity is a new development, and it's something that only we do and where we are consolidating our presence, and this is becoming a recurrent activity. As regards to decarbonization, we're still signing new contracts with existing and new customers. And we've signed the first thermal optimization contract in the United States. So we're opening up this market to this activity, and this has an enormous potential. Let's move on now to Global Dominion Tech Energy. And here, we explain the 2 segments, GDT Services and GDT projects. On the one hand, GDT Services closes the fiscal year with a business figure of EUR 460 million, which is organic growth of 5.8%. And this segment is what actually has the divestitures -- the divestments are focused on this segment, and they subtract 23% of the turnover, and we have to add that ForEx is subtracting 2%. So this year, anything that is related to this area is affecting us in other areas, too. And the GDT Services segment accounts for 44% of the total sales. But if we were to add this segment to GDE, we'd be talking about 90% of the company's turnover. And these segments are recurrent, as I said before. So therefore, we have achieved this objective, this recurrency objective in the plan that is exceeding 60% of our total and also 60% of the contribution margin related to recurrent activities. And these recurrent activities are the ones that have grown organically above the guidance. So this gives us lots of visibility in terms of turnover and in terms of future cash flow generation. So we have the margin -- the contribution margin in the segment that reached 19.7% over sales. And as regards to the total figure of the company, GDT Services accounts for 53% of the company's contribution margin. Finally, GDT Projects closes the fiscal year with a figure of EUR 113 million, which is 14% lower than what we reported a year ago. And as mentioned, not only in this period of time, but this behavior has to do with the temporary slowdown in the execution of projects. And this is a consequence of the situation of geopolitical uncertainty that we're facing and also because there's been a change. There's been a change of strategies in renewable projects where we do not execute anything until we incorporate a financial partner. So we want to have a greater financial discipline. So this slower rhythm of execution does not represent the loss of any projects or the collapse of any projects. So our pipeline is still strong and will eventually become income for us. And on the closing date of the fiscal year, the pipeline is EUR 413 million, which I think is well more than 2 years of project execution. The contribution margin now reaches 28.5% of sales in the year. And in Q4, the percentage has been higher, much higher than the average, and this can be explained by the reversal of some provisions because of costs that we have not incurred in a project that has already finished. So we made an adjustment and the adjustment was positive, and it's the transmission line or transport lines in Angola. As regards to the total figures of the company, GDT projects accounts for 11% over sales and 30% of the contribution margin. So once -- now that we've taken a look at the P&L, both globally and by segments, let's move on now to the main movements of the balance sheet. With regard to fixed assets, we have -- they have remained in line because this has coincided with the amortization of the CapEx of the year and also with the changes of perimeter. And there have been changes in the infrastructural assets where this reduction of nearly EUR 62 million comes from divesting in the photovoltaic assets in the Dominican Republic. The variation of the operational net circulating capital -- working capital is -- represents a net investment of EUR 250 million and there's also variation in the rate of exchange and elimination of the debt positions associated to renewable assets in the Dominican Republic. With regards to financial debt, well, it now stands at EUR 136.6 million, which means that it's a reduction of 25% compared to December of 2024 and 34% compared to the last debt figure reported in June 2025. And this reduction has been brought about by the generation of operating cash flow in the year and also because we've collected EUR 70.3 million because this operation was signed in dollars and in euros, it means that we'll be collecting EUR 70.3 million for the divestment of the wind farms in the Dominican Republic. So that means that the leverage of the company is equivalent to 0.9x EBITDA. So in other words, it's 0.9x for this fiscal year. So this generation of operating cash flow was EUR 71.7 million. So that means 5.4% higher compared to the operating cash flow that we generated in 2024. And of course, in 2024, we generated EUR 76 million in cash flow, but we have to discount a number of activities. So the figure for comparative purposes is EUR 78 million. Cash generation has been used to pay an earn-out totaling EUR 1.2 million that corresponds to the acquisition of the Gesthidro company in 2023 and also for the payment of dividends to the shareholders were EUR 50 million in July as well as the minority shareholders, EUR 1.9 million and the investment of C&O related to the divestment in the Dominican Republic and EUR 6.3 million that correspond to interrupted operations. In terms of CapEx, it has to be underscored that in addition to the EUR 20.1 million of maintenance CapEx, which is a figure that remains stable year-on-year, and we've even managed to optimize our levels, we have destined EUR 37 million to the expansion of different activities, among which we have the renting business for mobile devices, the development of renewable infrastructures and greenfields in the area of circular economy in Fujairah and in Tarragona. So as a conclusion of these results in this year, we have achieved the targets established for the fiscal year. So this is thanks to the transformation we've carried out with a very positive evolution, and we have materialized many actions that were geared towards the simplification exercise established in the plan. And we've done so within the context that is pretty turbulent too, with lots of complications. So therefore, we have reached this final year of the strategic plan with most of the changes made and decisions taken in order to carry on progressing in our focus on the environmental world through Global Dominion environment. And we also confirm that in 2026, we will be presenting a new strategic plan where we will lay down the foundations of Dominion of the future and where each strategic area will play a very important role. And before finishing, I would like to remind you that the dividend policy establishes a payment of 1/3 of the attributable net profit. But even so, the Board is going to suggest or propose to the AGM that we pay a much higher figure, much more than the EUR 3 million that would result from applying that policy. And this is so that we can preserve the remuneration to the shareholders. So we will suggest a dividend of EUR 8 million in 2026, which is equivalent to about 50% of the net profit of the continued activities, in other words, without taking into account those activities that were interrupted. And I would also like to remind you about another operation in the area of our shareholder composition, which was done about 1 month ago with the departure of Mahindra. Mahindra owned 4.16% of our shares. And the relevant thing in this case is that this figure, 4.16% has been acquired by the main company shareholders that is by the biggest shareholder we have as well as by the Chairman and the CEO by the company, therefore, increasing their possibilities. So I would like to thank you for your attention, and we can now move on to your questions. So you can either write them in or you can raise your hand on the screen -- zoom screen. Thank you very much for your attention.
Unknown Executive: Okay. Well, let's start off with the questions then. [Operator Instructions] So let's start off with the Q&A session and give the floor to the people that have raised their hand. And please make sure that microphone is muted. Firstly, we have Carlos Javier Trevino from Group of Santander.
Carlos Javier Treviño Peinador: I've got a couple of questions. Could you please give us an indication of the levels of growth that you expect for 2026? And could you perhaps give us some reference divided by businesses? That would be very grateful. And the second question is when do you think that growth in project can be reactivated because the 2 quarters have been pretty weak. And I would like to ask you specifically about the situation of the construction of the wind farms in Italy. When you signed an agreement in January last year, you spoke about 2 wind farms that would be built towards the middle of the year. And I want to ask you about that. And then could you please explain the reclassification that you've done with GDT services? And what kind of contracts have you got there? Could you please explain the nature of what's happened there?
Unknown Executive: Yes, as regards to the growth guidance for 2026, we are continuing with the current strategic plan. And therefore, we have to be over and above that figure of 5%. And that's what we have in our forecast, too. So we have to grow above that figure of 5%. And then you were asking about the issue of wind farms in Italy. Well, the first 4 projects that we had, we had an agreement with the partner. Well, these are already underway. And we're now seeing what kind of new project we could do. We think that it could be another 4 or 5 projects that could be incorporated once again with this partner with IPT. We'd carry out another search. But in any case, so that we can build these projects based on the fact that we have already identified the majority buyer from 70% to 80% up to 100% even, and this is what we have in Italy. And then -- as regards to the reclassification issue, well, that's a very minor issue. Well, yes, it's -- let's say, that this has to do with the quarterly aspect because this is something that I think that you do perfectly well because we have an activity in which we provide logistics services and these logistics services have to be recognized as an income based on added value. And this doesn't have to do with the logistics business, but it has to do with the added value associated with our logistics services. And in this regard, we've had some accounting entries that came from previous quarters that we've had to reclassify and adjust. But in any case, this is an accounting system. Well, as you can see, the figure for the year is the same one, but it's basically a focus between the third and the fourth quarters.
Carlos Javier Treviño Peinador: And when do you think that project growth can be reactivated? And when do you think you'll be going back to normal rates again, normal rates of growth?
Unknown Executive: Well, Carlos, the truth is it's very difficult to forecast anything because they are currently involved in public tenders. And you know that these projects are binary. But this year, we have good expectations. And I think that we'll be carrying out a project in Chile. And I think that green after divesting in the Dominican Republic will produce the development of new projects in Latin America. Yes, I would say, in the Dominican Republic, where we've identified the partner, and it's basically the 2 main pension plans of the company -- of the country, and we have the right partner. We have the projects. So well, the -- there was -- 7 or 10 days ago, there was a PV tendering process with storage and we expected this for August or September last year, but this has been postponed 5 or 6 months. And the process -- well, towards the end of April, that's when we'll know what's going on. I think that the prospects are very good, and we will have a very significant reactivation as from the second or third quarter in relation to Dominican projects. We -- in Italy, as I say, business as usual. And in Spain, we have some differences that to the extent that they can become self-consumption things, we could have a minor pipeline too to construct and to execute.
Unknown Executive: Let's give the floor to David Lopez from [ JB ] Capital.
David Sanchez: I have a question on the growth CapEx because this year, you've invested EUR 37 million in expansion CapEx. But could you please give me some more details on what activities are involved? And especially the level of recurrence, what level of investment or expansion should we consider for 2026 because the levels for this year, the levels were very similar compared to what we saw in 2024.
Unknown Executive: Well, yes, in that growth figure or CapEx figure, we have the CapEx that is related to the renting of mobile devices, and that would be well just over 1/3 of that total CapEx of EUR 37 million. And then we have the developments that are taking place in the area of renewables. We have developments in Italy, in the Dominican Republic and which, as you know, we've invested part in that development so that we can then allow our partners to join and then carry out the conversion of the EPC where you allocate much more capital. And we do this in the minority manner by -- well, by the arrival of the partner, we've recovered most of what we spent on developments. And then we have what we have invested in the greenfields in the GDE greenfield in the area of circular economy. And we'd be talking right now about something like, well, in Tarragona, where we've invested in the purchase of land in Fujairah, where we are also going to create a MARPOL plant. In other words, a circular economy facility, whatever is for MARPOL. It has to do with sea pollution. So this is going to focus on the circular economy applicable to polluted water, seawater. And these are the 3 chapters that is devices, renewables and GDE.
David Sanchez: And what about 2026? What level of CapEx and expansion should we consider?
Unknown Executive: Well, I think that lower as regards to the development of renewables because they are much more mature. And then what we are starting to see now are greenfields that have been better identified in the case of GDE. So I don't know. I think that perhaps and perhaps with a different kind of distribution, we'd be able to reach those levels, although it's very difficult to forecast anything like that straight of the cup. So yes, but as Robert said, it will be a different kind of distribution where GDE would be more present.
Unknown Executive: Okay. We're now going to review the questions that have to be answered from the chat. And if you want to send in any more questions, it would be the time to do so before finishing. Let's start off with Luis Padron. He's already asked several things. But anyway, when do we expect to present the new strategic plan? That would be the first one. Why are we reducing the dividend when there's a significant improvement of our debt? And the final one is that would you be considering a buyback of shares. And that's why the dividend has been reduced.
Unknown Executive: Well, as regards to the presentation of the strategic plan in the second half of the year, well, after the summer, we'll give you the specific date, we would like to present that on the Capital Markets Day, which is when we'll be able to analyze the different issues in greater depth. And then as regards to the dividend, as you point out quite rightly, I think that there's an issue here, like Patricia pointed out, that has to do with net profits without bearing in mind the interrupted operations, we've increased this up to 50%. And compared to previous year, previous years, cash generation has been significant and the levels of net debt have been reduced, and we're comfortable underneath 1x EBITDA. But I think that on our road map, we have attractive investment ideas. And as Patricia pointed out, we've tried to compensate things. And we've tried to be adequately reasonable in our remuneration to the shareholder, although we know that there are internal projects that will generate value -- more value for the shareholder. Yes. Well, this is linked to an aggressive investment plan. And then we have the issue of the buyback, the buyback of shares. Well, this is also something that is being dropped into. It's an issue that we would analyze under the new strategic plan as from this year.
Unknown Executive: Let's move on to the questions from David [indiscernible] from Scotiabank. And both of them are asking us about GDE. So there are questions on Q4 in 2025 with a business figure of EUR 140 million and contribution margin of EUR 8.9 million, which represents 6.4%, which is much lower than previously reported figures. And why has there been this slump in the margin over sales?
Unknown Executive: Well, this always happens to us in the most individualized part of GDE and Q2, Q3, well, these are much more powerful in the Central Europe or East Europe. But this is part of the company that we are individualizing and which -- what happens is that in December, when they achieve 100% of what they've committed to, we become a little bit more relaxed, but this doesn't really mean anything else. There's no really no significant element here to be considered.
Unknown Executive: There are several questions here on Cerritos. So we're going to group them up. Okay. [ David ] from [ Destino Fortunato ] is asking if the situation in Mexico is affecting the negotiations for the sale of Cerritos. And then Diego Martinez and [ Ignacio Joaquin Andreu ] are asking us about our forecast for the net debt once Cerritos has been sold.
Unknown Executive: Well, I'd say this is something that we mentioned with Cerritos. And Cerritos 2, 3 years ago became a problem because of the policies that were in place. It's no longer an issue. Now I don't know if this is going to be done on April 1 or May 1. But as you know, this is a project that is rated as an operation available for sale. So the value is about $100 million with a debt of about $85 million or $90 million because this is in euros. And we believe that the net asset value is properly reflected, and we're also actively working to round off the value of the project and defend its worth with an interesting PPA, something bankable, something that can be much more attractive for sale purposes and the sale for it to be operational. We -- well, we are going to -- we're now talking about 3 or 4 main leaders with whom we are negotiating things. and 3 or 4 bidders. And I think that this is a project that will become liquid. It's going to become liquidity, and we're now focusing a little bit on the details of if we can or cannot recover the accounting value or the book value, and that's what we're really focusing on. And I can't really say much more about Cerritos.
Unknown Executive: Let's move on to the last questions from Ruben Alonso. But I would like to remind you if you have any further questions, this will be the time to send them in before we finish.
Unknown Executive: Okay. Ruben, we've got 3 or 4 extensive questions. And the net asset value, well, we reaffirm what we have in our books because I think that there's an amount there for infrastructure that we will recover in the next 2 or 3 years. In other words, 20% of the Dominican Republic, we expect to recover this in 3 years. And we are also looking into if we have to perform any operations, as you point out, with the rest of renewable assets, because the idea is to focus completely on this rotation strategy that we initiated in the year '23. So this is what we can see. Although, obviously, together with the operating cash flow and according to the amount we would obtain in these recent divestments, I think that what we would really focus on is a company with 0 debt or 0 cash. And of course, it's very difficult because we're working on a new strategic plan, which I think is what Patricia mentioned and what the CEO said too. And we are focusing a lot on the greenfields and organic growth in the area of the environment where we have a number of interesting ideas that have to be carried out in the next few months, and it's very difficult right now to give you a debt and generation guidance. But we feel comfortable with 1x EBITDA. And I think we said that in the call of the third quarter, we said that we had an EBITDA of 1x. And I think what I'm missing is the debt that we had committed. But in any case, the important thing is that we have the basic elements to relaunch in this simplification strategy, the Dominion that we want to see in the future. Yes. And I think that I've answered practically everything with that comment.
Unknown Executive: We have one final question from Luis Padron from GVC. What profitability do you expect from the aggressive investment plan of GDE? Is it possible to have a buyback of shares?
Unknown Executive: Well, yes, of course, because we have an ambitious plan, and we have the right people, the right team for that. And we are now -- well, it's like when we were listed in 2017 and the segment -- the sector was highly segmented. And we wanted to achieve a lot of growth inorganic and organic growth. But as regards to this part of the plan, we are going to be aggressive. So in other words, the GDE figures of the last 3 years have multiplied EBITDA by 2, and the EBIT is 2.7x. We think that there are lots of very interesting opportunities on the table. And this is where we believe that it's worthwhile getting something done. So we will obviously remunerate the shareholder, but we think that here that there is -- I don't know, there is the possibility of generating a significant amount of value. Well, yes. And considering that we are in the year 10 since we were listed, we were first listed in 2016, and we reached the market -- we reached the market with a promise of EUR 43 million in EBITDA. It was EUR 150 million plus the green through. And all of that capital expansion via dividend and buyback has gone back to the shareholder. In others, we've given back to the shareholder much more than we initially predicted in 2016. But now we have another plan, which is a very aggressive plan, as Robert has just put it out in GDT, we will have lots of organic growth and very good performance. It's a very good business that we dominate and we are doing things even better, and it's very diversified, too. And the truth is that we're very happy with it. And GDE is a very ambitious project, and we expect to receive some very important news in the next few years. And that's what we're currently working on, and this is what our strategic plan is also focusing on, too.
Unknown Executive: There are no more questions. So we will close the presentation here. Thank you all for listening. Thank you.
Unknown Executive: Thank you very much. Goodbye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]