FCC.MCFCC.MCBME
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Miguel Coronel Granado: [Technical Difficulty] In general, there have been a series of problems, organic and inorganic growth in different areas. And the most important ones are transactions and then others. And we have seen more than a very stable performance. At the level of EBITDA, there has been a slight reduction in EBITDA with respect to net income. And this is concentrated in some adjustments we have made in the area of Construction in the last quarter of the year. And we will speak about this later on. Now if we speak about the P&L, the result of the parent company went down. We had a contraction of EUR 267 million. And as I was saying, there are several elements. I also mentioned EUR 166 million that have to do with this. Another factor that has contributed has been the exchange rate, which, as you can see, the strength of the euro as a consolidated currency left about EUR 53 billion of a negative impact in terms of financial results. In addition, we had endowed some provisions. They're one-off provisions for water treatment and some of the assets that we have specifically in the U.K., which amounted to EUR 96 million for the whole year. So as compared with the EBITDA we had, this was similar to 2024 considering these three types of effects. And these have resulted in the EUR 164.4 million I mentioned before. Having said all this, if we consider the balance sheet and the joint financial structure, the group evolved in a very positive way. In 2025, we closed with a net financial debt of just EUR 2.3 billion. This was a reduction of 23% of our net financial debt in spite of the fact that, again, a very significant effort was made as we did in 2024 in terms of investments. We made net investments for EUR 1.2 billion. And this is really noteworthy in terms of revenues. If we compare the CapEx revenue ratio, well, it's 12%, which is a substantial figure if you compare it with the levels of amortization, endowment and revenues. So this is a significant figure in. Spite of the effort we made, we showed a significantly robust financial performance. Also at the end of last year, we collected the money corresponding to an additional percentage of minority stake we had in FCC Enviro, which is devoted to environmental activities, where we had a revenue of EUR 1 billion. The net assets grew by over 26%. We now stand above EUR 4.7 billion. And as I was saying, together with investments, another variable which for us is very important to mention is the portfolio for future revenues. At the end of last year. we closed with a portfolio of over EUR 51 billion. If you look at the calculations in the group and the activities of the 4 different areas we have, as I was saying, the growth was over 11%, specifically 11.4%. And the main driver -- although the different activities performed very well, Water and Environment, but the star was Construction, where in the management report we provide details of the most significant contracts that made this growth possible. In the case of Construction, the growth was notable. Right. So so far for the P&L and the balance sheet now and the financial situation. But let's look area by area. Now the first area is Environment, which is the most significant area in terms of its contribution. Our broad activity for waste management is included here. Revenues grew by 9.1% to EUR 4.74 billion. Here, the growth was well balanced. We had a good performance across the urban waste collection and street cleaning activities. I would like to mention the evolution in the organic growth in France and Spain as well as the acquisitions we made in the United States and in the U.K. In the United States, they were more focused on waste processing. Now in terms of geographical areas, the 4 platforms that we operate with our brand, FCC Enviro, revenues amounted to EUR 420 million, a significant growth with respect to the previous period's figures. And here, we had a very good performance. In terms of new contracts where we didn't have the management previously, we have grown by 20%. So we are quite satisfied. Although there is an activity which is minor, but by no means irrelevant, which is the industrial waste activity also performed very satisfactorily. We also moved forward in terms of our investments, particularly in waste processing in our different plants. And we are now enlarging some of our plants, although these enlargements are not yet contributing anything to the EBITDA. Now in terms of the platform that we call the Atlantic platform, France, Spain and Portugal, well, the increase was quite significant, EUR 150 million. Here, as I was saying, we are growing organically in terms of our contracts through our brand in France, ESG. And in Portugal, we also had very solid activity and a very stable one. The second platform of FCC Enviro in the U.K. had an increase in revenues, which was quite significant. We had a slight negative effect from the sterling. But we need to mention the whole year contribution of U.K. Urbaser, which combined this newly acquired platform waste collection activities, and we also made a few acquisitions, which was a company called Cumbria Waste Management in the Northwest of the country. So what we have seen is a lower level of processing activity, particularly in landfills, but this has been compensated for by an effect of higher activity levels in recovery and recycling. In Central Europe, in the European market, increases of 3.9%, EUR 660 million. In general, there are 7 markets here. We have a significant presence in the top 5. What we have observed is a certain weakness in the price of secondary raw materials, which had rallied very significantly in the last few years, but now they have stabilized and they have gone down a little. But the compensation has been very strong because this is a highly granular business. But there have been some adjustments in markets like Slovakia or Austria, but there have been growth in the Czech Republic and Poland. And so the performance overall was satisfactory. The last platform I want to mention in FCC Enviro is the United States. Here, the improvement was of over 22%, EUR 470 million. This is a platform that is already quite significant. It is close to the volumes of Central Europe. Here, there was a good evolution and some new organic contracts in waste collection and street cleaning. And here, in general, we are using a highly competitive technology. And I also want to mention the acquisition we made because we are for the first time entering the recovery activity. We already have experience in the U.K. But in the United States, this is something new for us. We made an acquisition that we formalized in the second quarter in the South of Florida of a waste recovery plant. And thanks to that, we managed to secure an operation and maintenance contract that was new. This is 2 very important plants because they have over 1 million tonnes of capacity for waste processing. So it is really very significant plants. So the combination between organic and inorganic activities resulted in very significant growth, 2 digits, 22%. EBITDA increased quite in a similar way given the improvements in revenues, EUR 789.8 million, in line with our forecast. And the gross margin stayed at a very similar level, 16.7%, without very significant differences with respect to the previous period. Now let's talk about the water cycle, Aqualia. Well, here, the turnover increased by 6.9%, EUR 1.7 billion. To be honest, Water is a highly stable business, 100% predictable and with very satisfactory performance. You know that we have two important areas. And the most important one is the so-called water cycle, it's the integrated cycle for water management, of water consumption; and to a lesser extent, technology and networks, which also gives us some competitive capacity to do with infrastructure. Both of them grew quite well. Technology and networks grew a little bit more because it is linked to projects or developments in different concessions, BOT, or comprehensive concessions or integrated concessions. Technology and networks grew by almost 19%. But having said that, this figure changes every year geography by geography. Spain still contributes over half of the share, and revenues increased by 10.2% in Spain. Here, well, things have normalized, particularly after the drought we had last year. In terms of consumption and in terms of the evolution of tariffs, things are a lot more predictable now. And the work done in technology and networks also experienced a significant growth, and this led us to a double-digit revenue increase. In countries like Georgia and the Czech Republic, these are proprietary assets. Here, there's no concession activity. And we grew by 8% to EUR 169 million. Here, there was a little bit of a foreign currency effect. The strength of the euro played a very important role. But the evolution was highly positive, and we are still making investments in Georgia to improve our efficiency and to improve the way in which we invoice our customers. And all of these things were highly positive. Now the rest of Europe, we have activities in Portugal, in Italy and also in France. And revenues increased by 1.4%, EUR 113 million. But here, we must mention a lower level of activity in technology and networks. And we should also mention that in the Portuguese market, there was an effect of the drought all along 2025, which obviously we are clear that in 2026 this is not going to happen again because I'm sure you're well aware that this year really started with a lot of rain from the month of January. So in the Americas, you know that we are now focused on Texas. And the turnover was also positive, 9.8% up, EUR 215 million revenues. We have kept generating new contracts in our concessions of different districts in the American market, MDS, for example, which is the company that we used to carry out our operations. And this has been accompanied by our activities in Colombia, where the evolution was also very good. The latter is basically focused on the integrated cycle. Now in MENA, Northern Africa, well, in Northern Africa, we managed our BOT contracts without any meaningful events. There have been some changes in the tariff. Those changes affected us negatively, and this is because of the strength of the euro. And also in the Persian Gulf, Saudi Arabia, Oman, Qatar and the Arab Emirates, the activity has been highly stable with our combined contracts for advisory. And we're still very positive in terms of the opportunities that await us in the future for new investments that we could make or requests from public customers. Now with this improvement of revenues of 6.9% for Water, EBITDA also grew EUR 450 million up. And the only small difference in terms of margin and EBITDA is due to the heavier weight of technology and networks, which operates with margins that are lower than those of managing water cycle. That's why the final figure was 25% as compared with 25.4% last year. Now Construction, which is basically developing various projects. Revenues increased by 3.4%, over EUR 3 billion more. It is true that although Spain is not the dominant market, it hasn't been the dominant market in terms of portfolio, since these are short-lived contracts, here, there was quite a significant contribution. We have kept contracting services. And so this allowed us to compensate for a fall, resulting from the way in which our projects are closed abroad and in our industrial division. But on the whole, Spain played a very important role in this advancement. So the Spanish construction market was 15% up in 2025. Now if you look at the different locations we have, the different sites we have in the U.K., in the Netherlands, in Norway, in Romania, our revenues were quite stable, EUR 880 million, very similar to 2024. And we had a very important project in the U.K. for the sister company of FCC Co., which is now fully operational. And this was partially compensated for by projects that we had in the Netherlands and Norway that I mentioned before. So the picture is very stable. Another market that was very important together with Spain was that of the Americas. The turnover was almost EUR 11 million, 4.9% up. And here, you can see the importance of some of the projects that we have in Canada and the United States, particularly in railways on the East Coast of the United States and in the area of Metropolitan Toronto. Lastly, I don't want to forget MENA, which is also an area where we have had quite a significant presence for some time. And here, there's been a fall because of the close of certain projects that we are very satisfied about, such as that in Saudi Arabia. And the closing of these projects resulted in a 41% fall in this area. We closed at EUR 152 million. But as we already said in the events and contract reports, you can see that we do have a significant presence and quite significant visibility in the Middle East for the future. So the EBITDA here went down 49.9%, EUR 85.8 million. Of course, the gross margin was also influenced by this. It was not really within the range that we normally are. We closed at 2.8%. And this was due to the fact that in the last quarter, we had to provide for a series of projects and a series of things such as the end of certain projects because we believe it's good to act preventively. A stitch in time saves 9, as they say. So this resulted in a fall in EBITDA and in the gross margin of our construction activity. Now let's talk about Concessions. Well, Concessions closed at EUR 112 million. This was a significant advancement. Here, you may have observed in previous quarters, especially in the third quarter, the figure was lower. But now we are in a development phase. We are executing different projects. A lot of CapEx, especially in a railway concession in the North of Spain, in the region of Aragon, Itinerary 8. And there were two other effects which are not negligible. One of them was we have taken full management control of the Ibiza-San Antonio highway and also the evolution of traffic. Both road traffic and tramway traffic in our concessions, well, has fluctuated throughout the year, IMD and passengers, between 2.2% and 2.9%. So all of this has been highly positive, and it has resulted in that 45.5% increase. Now market by market for FCC Concessions, well, even if we have huge external growth perspective, the majority of the growth took place in Spain for the reasons I mentioned before. I want to mention that internationally, nowadays, revenues are still supported by our concession in Cotuco on the East Coast of Mexico. And there's also the fact that here, there was a concession in Cemusa Portugal that was closed in 2024, and this led to a small fall. It's not very important, but this explains this international fall that we've had internationally in Concessions. But this is just a one-off effect that will have no impact on the future. EBITDA reached EUR 60.4 million, 10.8% up, more moderate than the increase in revenues. But here, this shows the powerful evolution of the business. But of course, the gross margin of concession projects has a lower contribution. But even so, the activity, the growth is of two digits, which is really very significant. I've reviewed the 4 areas we have in our business which are the ones that contribute to the description of the P&L. I will now review the more financial aspects, the interpretation of all of this in more monetary terms. In terms of cash flow and exploitation, we reached EUR 1.2 billion. Here, I would like to mention the operational current capital, which contributed by over EUR 27 million, which is quite differential because last year in 2024, there was some consumption, which is not really strange. The greatest contributor was the Construction area, and you can see this in the information we have distributed. Other exploitation flows had also a very significant effects. And this was because of the carve-out, which is really an element that distorts any comparisons we would like to make. But this effect will disappear from next year. But 2026, if we compare it with 2025, it is quite noticeable and it should be underscored. The investment cash flow, as I was saying, had a very significant investment activity. We invested a total of EUR 1.23 billion gross. And here, we focus on environmental activities. The Environment captured over EUR 900 million in investments, both the recovery plant in the United States in Florida and the reinforcement of the integration we made of our activities in the U.K. to combine it already with our presence in processing plants. The second investment was made in Water, EUR 205 million last year, but more homogeneously distributed into enlargement, maintenance and renewal of our existing assets. Now divestitures, well, we have made very few divestitures. We sold off assets in one of the businesses we have in Spain for waste recovery and resell of recyclable materials, basically cardboard. This was a EUR 40 million divestiture, which was the most significant one. But net investments exceed EUR 1.2 billion. The financing cash flow. Here, there was a combination both of the money we collected from the additional sale of a minority stake of the environmental parent company, EUR 1 billion, together with some other effects such as payment of interest and minorities. But there was a net revenue of EUR 800 million. Now with respect to movements of financial liabilities. Let me remind you that last year, we refinanced most of our debt of our Water subsidiary. And we already informed you about this and this explains the movements happening here. And in these 3 sections, well, the treasury had a very good performance, an increase of over EUR 800 million. So the final figure was over EUR 2.2 billion. So with this, our financial debt closed at EUR 5.3 billion without significant variations with respect to our positioning. The most important thing is that in net terms, given the cash position with which we closed the year, this was all very solid. Our financial leverage went down by 23%. Our net financial debt was EUR 2.3 billion. And the differential elements, apart from the good performance of the exploitation of the operational cash flow, I would like to mention the evolution of our working capital and the effect of the sale we made of stake in FCC Enviro. So that's about all I had to share with you. I just wanted to review the most important highlights of our 2025 financial year. I would just like to mention three elements, which are extremely important for the medium and long term for the evolution of the group. First of all, our investment efforts, which was really very significant given the size and the activity that the group is having. Number two, we have strengthened the financial position of the group. We closed at EUR 2.3 billion with an EBITDA which evolved to over EUR 1.4 billion. And lastly, our portfolio. It is essential for us. We are a group that we basically work on the basis of projects and contracts. So having a visibility of over 11.4% growth year-on-year is really essential for us. We believe that it gives our company a very significant level of robustness. So that's about all I had to share with you. And now we can open the floor for questions from you. Thank you.
Operator: First question, what is the level of one-offs and total provisions in the environmental division? Are these out of the cash operations because can you reach EUR 400 million in 2026?
Miguel Coronel Granado: Well, I don't know whether the question is related to the level of provisions that we endowed in the environmental activity or not or to the balance sheet in them. With respect to the balance sheet in the Environment, we have two kinds of provisions: general provisions of the business and specific environmental provisions related to the different assets where we have an environmental import, like discharge centers, et cetera. So as far as those provisions are concerned, we always try and calculate what our future payment obligations are. Although there may be years where there may be jumps, the fact that there's more applications than endowments, well, these applications are normally payments, right? So there's quite a good balance between them. Having said that, I mentioned that in 2025, we had to apply environmental provisions for about EUR 90 million, which have been provided for throughout the year. Probably this year, there will be a higher volume of endowments. But in general, endowments and applications are normally well balanced mutually. Now in terms of the level of EBIT, as I was saying, the endowment we made of provisions that for the P&L can be seen in other operational results between EBITDA and EBIT had impact in 2025. Of course, we expect a significant recovery in 2026. Taking into account the adjustment of that EUR 90 million, I think that it's quite feasible.
Operator: Next question. In your Construction activities, what is the level of operational EBITDA adjustment for this quarter? Now sales, can they grow at 2 digits? The 5.7% margin of 2024, is it really sustainable? Is there going to be an improvement in working capital because of advancement of certain projects?
Miguel Coronel Granado: Well, the level of operational one-offs of EBITDA for the first quarter, if you looked at the sequence of results in our construction activity until the accumulated third quarter, we have followed a very stable tendency. Of course, it is true that in the fourth quarter, there was some situations in certain international projects and several projects. And so we decided to make a few adjustments. What is the magnitude of those adjustments? Well, we don't normally comment on these things because these are projects that are underway. So it wouldn't benefit us to make comments because these are not claims made by a specific customer or a specific supplier. There's no litigation or anything like that in that respect. It is projects underway. But we want to be prudent, and that is why we made those provisions. Is there going to be any cash outlays as a result of that? Well, as you know, provisions are part of a continuous game. So you make an endowment and then it may be applied or not. They are endowed at the level of EBITDA and they are applied at the level of the cash flow. So we try and use a few of the provisions we make as possible. But for us, and to connect with your question as regards to the 5% margin of 2024, well, in a project-based activity like Construction and like Water or the Environment, it is very difficult to say that we are going to be able to keep those levels stable. Our recurrent stable margin in an average cycle normally stands at 5% above. And yes, we think we can go back to that. But obviously, when you look at this in detail, there are effects that may go in one direction or another. Now with respect to what you're asking about the working capital, in spite of the growth in revenues, part of the contribution of Construction to the working capital have been some prepayments because whenever we can, we work with a positive cash flow in our projects so as not to resort to financing. So this is what happened. Of course, we will be applying that working capital in the future as we develop the different projects. Now is this going to happen again in 2026? Well, we'll have to wait and see. It is very good news for 2025. But when you're growing your business, it is not easy to always have working capital that is positive. That is a very difficult thing. Having said that and to answer the last of your question, can your sales grow by 2 digits, well, if revenues are going to grow by 2 digits, well, the Construction portfolio had a very good performance. But these are phased projects. These are important projects such as the ones we have in the United States and in Canada. And although they have pushed our projects portfolio up to -- I think that in 2025, we started at EUR 6.5 billion, and we finished at EUR 9.5 billion, but the maturation period is longer. So this allows us to distribute the execution risk and do it chapter by chapter or phase by phase. So to answer your question, there will be a growth in Construction sales in 2026, but the growth will be more moderate but we will have a lot more visibility than we had at the end of 2024. So the growth will be more moderate. So the revenues are not going to grow that 50% level as the portfolio grew.
Operator: Next question. What projection of dividends can you give as you lower your debt?
Miguel Coronel Granado: Well, you know that we don't give any guidance in terms of dividends. We have this flexible dividend. And last financial year, it was EUR 0.5. It is set by the Board of Directors before the General Shareholders' Meeting. It's not that by having lowered the debt, we are going to be able to pay a high dividend because we always want to emphasize growth provided that it is profitable and safe. We believe we do have a potential, but those things are not really directly connected. For example, last year, we ended at EUR 2.3 billion of net financial debt. And just with EBITDA and the elements impacting it, we stand at EUR 1.4 billion. So it's less than 2x debt to EBITDA. And a significant part of our activities are utilities or proxy utilities. So the financial strength of the group, not in 2025, but from much earlier has been absolute. So I would answer that those things are not directly interrelated, but the profitability, dividend ratio, I believe, is highly satisfactory, nonetheless.
Operator: Next question. Were additional provisions made in Environment in the fourth quarter?
Miguel Coronel Granado: No, not that I can think of. The ones I mentioned that practically -- let me go back to it. I think I said at the beginning, EUR 96 million. There could have been some adjustment. But in the first half, we reported EUR 89.2 million. So there were small variations because of the provisions I mentioned to do with some assets where the value had to be adjusted and some projects related with some risks we had under this discussion. But in the fourth quarter, there were no differential provisions.
Operator: Next question. Could you quantify the impact of one-off adjustments in Construction during the fourth quarter of 2024 both in sales and EBITDA? Have these adjustments resulted in outlays? Or will such outlays materialize in the next few quarters? How do you expect the working capital to perform this year?
Miguel Coronel Granado: Well, let me go back to the answer I gave to your colleague with respect to the provisions in the Construction area. So part of the impact on the EBIT in the fourth quarter resulted from the adjustment we made in some projects. And in some cases, we just readjusted or recalculated the forecast in terms of the completion of the works. So we'll see how it goes. All of this is very much alive. So none of these things respond to any payments that have to be made to any particular person. So there's no differential cash flow. There's no difference with respect to the performance of any other projects. So it's not due to any litigation or anything. There's nothing special to mention about the outflows. Now in terms of the working capital, I already mentioned that the working capital is a very much alive variable which responds to payments and collections. And until the year doesn't close, it's very difficult to say. We would love to also have a positive workflow evolution in 2026, and we normally work with positive working capital. And this is only logical because we are very strict about the payment and collection conditions. We are normally stricter than our own customers, but we do our best in this respect. So if we still keep increasing our revenues, it is going to be difficult to keep such a positive working capital profile as we have kept.
Operator: Now what the net like-for-like result adjusted by the different one-offs of the year?
Miguel Coronel Granado: Well, I would say that we don't have a calculation for that because in a group such as ours, you can agree on a series of adjustments that we can make. I think that you have all the documents. You can use the adjustments you prefer. I mentioned the 4 blocks, which we believe are the most significant to understand the full picture. But if I had to make an adjustment, I would look at the evolution in revenues because the evolution of operational margins with the different things I mentioned for the different areas didn't undergo any variations. So that would come very close to the variation of a comparable net profit of the consolidated group. It would come very close to the high figure in terms of the evolution of our P&L.
Operator: There's no further questions.
Miguel Coronel Granado: Okay. Thank you very much, again, for joining. As you know, I'm sure you will be able to peruse our annual accounts in detail. You know that we are always available on the usual channels. So thank you very much, and have a good day.