OHLA.MC(OHLA.MC)
OHLA.MC
Luis Fernando Amodio Herrera: Ladies and gentlemen. It's a pleasure for me to share with you like every year around this date, the results of the recently finished year. Please allow me to highlight that these figures that we will mention next are the result of the deep transformation that the company has experienced in the last few years. The OHLA Group has been able to leave behind old habits to advance the determination towards a more solid and better prepared model in a global and competitive environment. That's why today, I address you all with a full satisfaction of accomplishment and a job well done. And with the conviction of having worked rigorously, coherently and with determination in each decision made. The figures that the CEO will mention next are not only reflecting a positive and sustained evolution, they also comply with the forecast communicated to the market. They also prove the effectiveness of adopted strategic decisions and the discipline with which they have been followed. To sum up, they are the evidence of a strategic and operational advancement that has been deep, foreseeable and structural. An advancement that many people considered hard to reach that now can be seen clearly reflected. Please allow me to mention especially relevant milestone that I feel especially proud of, because of what it symbolizes in terms of transformation and financial responsibility. The leverage ratio of the group is now 1.7x net EBITDA. This achievement is significant for 2 reasons: first, because back in 2020, this ratio was 11x, a figure, reflecting the size of the challenge that we were facing, and the breadth of the effort we needed to make; secondly, because it's the clearest proof of our rigorous belief in financial discipline. This financial discipline has allowed us to settle more than EUR 563 million of debt in 6 years. In this regard, I'd like to highlight that our main target is to reduce debt. It hasn't been a simple process, reducing debt at this level while strengthening the global performance of the group has required determination, rigor and an extremely precise management. That's why this milestone goes beyond a strictly financial terms, symbolizing the ability of this organization to work with excellence and increase its pipeline even in the most demanding context. And therefore, it is a great reason of pride for all of us. 2025 has also been a year of corporate governance strengthening that has materialized amongst other initiatives. In the addition of 3 new independent directors recruited according to the most demanding criteria of professionalism and excellence. In this way, half of the Board is now made of independent directors, reaching 50% of representation. Let me remind you that this ratio exceeds the recommendations of the main codes of good corporate governance. And they are a clear proof of the highest standards of transparency and independence. These new additions are great and proven background profiles in financing infrastructures with a deep knowledge of strategic markets where we aspire to consolidate our position as a reference company. The arrival of Ms. Socorro Fernández Larrea, and Mr. Vicente Rodero Rodero, and Mr. José Miguel Andrés Torrecillas brings a strategic perspective that has been leading in the Board's decision-making. In this way, we're reinforcing the technical quality and the independence of our Board. We're also advancing in a more balanced and demanding governance framework, strengthening, therefore, the trust of our shareholders and investors in the institutional solidity of the company. In 2025, we have also settled definitely some judicial uncertainties such as the arbitration procedure of the Sidra Hospital that were sort of [indiscernible] for the company. With this, we anticipate the shadows affecting our feasibility, and we open for our company a new stage free of contingencies fully focused on growth and returns for shareholders. With the disappearance of these shadows, the group is now presenting a solid situation in the face of the stakeholders that for years, questioned our stability that on many occasions, wanted to condition the confidence of the market. With the best financial structure over the last few years and with a reinforced corporate governance once cleared the main uncertainties, OHLA has now a great status to approach ambitiously our strategic plan. This plan has been conceived to consolidate a more profitable corporate model, able to generate sustainable growth and fully aligned with the excellence and growth standards we want for OHLA. Due to all this, I can firmly state that OHLA is now a new company, more financially solid, demanding in its management and a leading example in its governance and more ready than ever to face the challenges of an increasingly competitive and changing environment. Personally speaking, I cannot hide my pride as a President for being catalysts of this change. I'm proud of the talent and effort of our staff and of the collective ability to get over obstacles that seem unsurmountable. Now, OHLA, our future is built every day with a commitment of 32,000 collaborators that advance together in the same direction. Therefore, we firmly believe that the potential of this company goes way beyond the circumstances of each moment. And we face the future with a firm determination that OHLA will keep growing and helping grow everyone who is part of this project. Thanks so much for your attention. And next, I'll give the floor to our CEO, Mr. Tomás Ruiz, who will present in detail the results of the last year.
Tomas Jose Gonzalez: Thanks so much, dear President. Good day, everyone. It's a pleasure to address you all today to present the results corresponding to the year 2025. As the President just mentioned, the figures we are now sharing are the direct result of a deep transformation of the company, sustained in time and performed with determination. 2025 has been a decisive year for OHLA, a year where we have consolidated our pace, reaffirming our operational solidity and showing that this company is ready to compete, grow and create value for the shareholder. As you may see in this presentation, OHLA yet another year has complied with all the targets we have set. And that's important -- extremely important because when a company meets their targets, they're responding to the confidence given to it. That's why complying and exceeding with the forecast is not yet -- yet another year is not just good news. It's a strict level. And based on this, please allow me to focus on 3 indicators that better show that anything has the deep financial transformation of OHLA since 2020. First of all, as the President mentioned, the gross debt reduction. We have gone from a ratio of 11x EBITDA in 2020 to 1.7x nowadays. It is a great reduction, not very common in our industry, reflecting a combination of discipline, prioritization in strategic matters and rigorous performance. Few companies can show a deleveraging process of this size without sacrificing the portfolio, the margins or the operational capability. In parallel, the company has transformed its operational capability, and that can be reflected clearly in our EBITDA. In only 5 years, OHLA has managed to travel its operational results, going from EBITDA that was not even reaching EUR 65 million to reaching levels of EUR 208 million. Besides 2025 is a third year in a row of cash flow generation in our activity, an indicator that for many years was recurrently negative and that now shows that we're going back to normal. In this graph that we are showing, we are showing how OHLA has met and outperformed all objectives included in the guidance at the start of last year. We had sales for EUR 4 billion, which outperformed the objective and EBITDA grew by 19% compared to the commitment that we took at the start of the year and by 36.4% compared to 2024, which means EUR 208.1 million EBITDA result. We have another positive net result. So we're back to black with EUR 1.7 million. So we've met the objective. In terms of order intake, we have EUR 4.6 billion (sic) [ EUR 4.7 billion ] , which once again outperformed the objective, which was 2.2%. Cash -- activity cash generation was EUR 76 million generated, which once again confirmed that we are back to normal in terms of liquidity for our activity. Credit rating has improved as well. We obtained a B2 (sic) [ B- ] by Fitch Ratings, which is better than what we had in 2024. And our gross financial debt, this is easy easier said than done, but we canceled EUR 192 million in debt. Now concerning the performance of our order book since 2029 (sic) [ 2019 ], we have gone from EUR 5.5 billion to EUR 9.7 billion in 2025, which is an all-time high. This is an order book increase of 77%. This is it's geographically diversified, and it emphasizes our home market. We are following a strategy, which is focused on selecting projects based on strict risk control criteria to guarantee and achieve sustainability in the value of our projects. We're also focusing on projects that mean under EUR 400 million in risk for the company. Our book-to-bill ratio is over 1x, and our order intake ratio is above the industry's highest standards. Whilst the order book in the United States grew up by EUR 4 billion -- up to EUR 4 billion in 2025, the geographical distribution has increased the relative weight of Latin America, which partly explains the improvement of our EBITDA. Now concerning main projects in 2025, I would highlight stable geographies in which we're operating with risk profile, which is aligned with our risk the ones that we very strictly established for our company. The Port of Miami in the United States is one of the most relevant ports in the country; the Lo Ruiz Tunnel in Chile. This is a key infrastructure for metropolitan mobility around Santiago; the extension of the Pan-American highway, which is an essential corridor for the regional transportation in Central America. In Spain, the new hospitals of Malaga and Huelva. And I would also like to highlight the strategic boost of our awards portfolio with the award of a new highway in Brazil with over 45,000 vehicles of traffic, which is already operating. Now concerning the activities, cash flow generation. Just to go a bit more in detail. This is a key indicator to understand the evolution of the company in the last 5 years. 2025 was the third year in a row where we had positive cash flow. This confirms once again that we're back to normal. And it's important to highlight that this was complemented by capital increases and the good response of our shareholders, which allowed us to cancel debt as well as making capital investments, whilst also facing the abusive redemption of performance bonds in Kuwait. So all of this explains why in spite of positive cash flow generation, our liquidity has gone down to EUR 847 million. Now concerning debt reduction, this is the main change that we have achieved, as we have mentioned. It's very important to keep reiterating that compared to 2020, we have canceled EUR 563 million in gross debt. This is and has been and will remain our main priority objective. And this is a significant effort for an organization that works in such high operating demand. The leverage ratio is 1.7x nowadays compared to 11x in 2020. And this is something that you do see in the industry. It requires discipline and operating soundness. Concerning sustainability, I would highlight that we have met 85% of the objectives that we established in our sustainability plan, thus showing that the road map that we created was feasible, measurable and executable. We have also reduced work accident rate by 35% in the last 3 years. Three key aspects that I would highlight about 2025, one of them has already been mentioned and addressed by the President. We took a step forward in our corporate governance by reestablishing our Board of Directors. Secondly, in 2025, we applied a cost reduction plan that is part of our strategic plan for 2025 to 2029. And the main objective of this cost reduction plan is to reduce costs by EUR 40 million. Amongst savings measures, we have partially relocated our headquarters, and we have partially -- we have applied organizational restructuring to simplify our overhead. And these measures already mean 50% of the forecasted savings, and we expect to achieve 85% of savings by the end of 2026. So we'll be doing more with less. And something very important in 2025 was that we cleared some of the most important uncertainties the company was facing with the rulings of the litigations of hospital -- the Sidra Hospital and the Doha Metro, both in Qatar. And these have meant a positive impact of EUR 17 million for OHLA. And further, in 2025, we agreed asset division of the Centro Canalejas in Madrid, which will allow us to manage this asset more efficiently. And to conclude, I would like to highlight that in 2025, we have EBITDA margins for Construction of 7% that we have positive cash flow generation that we have strongly reduced our gross debt, and we have deleveraged as well. We have extended note maturity until December 2029 without interim maturities. We have also cleared the main uncertainties that the company was facing. We are undergoing cost -- overhead cost reduction plan. And so we can be optimistic for 2026, and we forecast sales for over EUR 4.1 billion. We want to keep reducing overhead costs. We will keep focusing permanently on increasing gross margin, and we will reach over EUR 215 million EBITDA, order intake of EUR 4.4 billion. We will reinforce our financial stability and operating stability, and we will keep rotating nonstrategic assets. Thank you very much for your attention. And we're going to open the Q&A session with Víctor Pastor, who is the Financial Director of the group; and Pedro Arellano, who is the Director of Investor Relations and Capital Markets. But we will take a few minutes and we'll have a break before moving onto it. [Break]
Pedro Villanueva: Good afternoon, everyone. Thanks so much for being here. And let's begin with the Q&A session. Please allow me first to address you apart from saying thanks. We have Tomás and Víctor Pastor as announced. But if there are any questions remaining, we'll respond to them very kindly from the Investor Relations department. We're getting quite a few questions by e-mail and also on the app. Now that you registered. So Tomás, let me ask the questions. We've had a recurring question during the presentation, which was when does OHLA expect to go back to dividends and whether it is included in the company guidance?
Tomas Jose Gonzalez: Well, regarding this topic, I'd say that, of course, for any company, one of the main targets is to give out dividends to the shareholders. But in our road map, this target needs to go through other stations first. We've been working for that. And our debt reduction effort is geared towards that. And as the President said, we're going to keep working in reducing that debt. But obviously, the aim is to go back to the dividend payout. Possibly, we might not see that this year, but it's our target for the next year for 2027.
Pedro Villanueva: Thank you. I'm going to combine a few questions we're getting regarding a litigation that was pending but favorable to us, which was the recovery of the debt with the Villar Mir Group that has been quite competitive. I think we got that question 9 or 10 times.
Tomas Jose Gonzalez: Regarding that topic, I'll just highlight that just like any other OHLA debt, we are very rigorously to get the recovery. As we have seen in more relevant litigations regarding the amounts, sometimes we're successful in the recovery. But in the case of that specific debt, the tranche of that pending debt, which is not all of the debt is now in the process of recovery that may materialize in the next few months. We depend on the times of the judiciary power there.
Pedro Villanueva: There's another question regarding the litigations for the rest of pending litigations, when do we expect them to be recovered so that are material in the cash flow of the company?
Tomas Jose Gonzalez: Well, this varies depending on the litigation we're talking about. In some areas, sometimes there are some additional complications, in the specific case of litigation such as Doha. And once we have met our obligations in that country in Qatar, where we have some with subcontractors, we will be able to have excess cash flow and possibly in the first quarter, the first 5 months of this year.
Pedro Villanueva: Thank you. We have a general strategic question that has been repeated in different times, and I tried to sum it up, hinting to us a strong growth in the last quarter and a progressive improvement of results throughout the year. Will that be kept? And we have a guidance of EUR 215 million. Is that aggressive? Is it not? How do we see it?
Tomas Jose Gonzalez: Well, in our guidance, we always try to be conservative. And at the same time, we try to confirm our full compliance record for the things we commit to. That's why we say it will possibly be above EUR 215 million, but we should not forget that in this year's results, the last year's results, we foresee the effort of the Construction division with a year with excellent results. We also have some extraordinary impacts. And we take into account the net balance of positive and negative elements because we have also had some extraordinary negative elements like any company in this industry. We may be talking about an amount between EUR 20 million and EUR 25 million. Therefore, the target is to be above EUR 215 million of EBITDA, but we might be able to exceed that.
Pedro Villanueva: Thank you. Now we have some questions regarding the balance sheet regarding the factoring without the possibility of recourse company. You have it in the balance sheet part is being the same as in 2024, EUR 101 million. And then we have other questions regarding debt management. Basically, how are we going to keep reducing the leveraging of 2026, which was the target announced in the presentation and whether that's related specifically to the bonds?
Tomas Jose Gonzalez: Well, the main debt, not to mention the only debt of this company are bonds. As people know, we had important refinancing that finished last year, given us a stability horizon up to 2029. Despite that, as the President mentioned it, we keep reducing the amount of these bonds, the amount of debt. So we are working to rotate nonstrategic assets, and we'll keep doing so, so that we may reduce this debt. And once this happens, we'll be able to look for refinancing in even more convenient terms for the company. I don't know whether Victor might like to add anything.
Victor Pastor: Good day, everyone. Maybe just add that in that debt, there is a penalty clause quite damaging for the company until August this year. And if we take into account that rotation that Tomás has mentioned and the fact that until August, that clause might entail a big payout by the company. Right now, we are working on the 2 fronts, asset rotation on the one hand to reduce debt; and other alternatives with a different debt profile in different markets. And with the pace and the credit profile of the company, we should be able to reduce the financial cost of that debt, which is quite costly and keeps increasing as years go by. So that's our strategy.
Pedro Villanueva: Next, we have 2 questions. The first one is which work is being done with the banking pool with different banks and whether we see any possibility of increasing the capacity of the guarantees?
Tomas Jose Gonzalez: Well, I'd like Victor to complement this question, but the work with the financial and banking committee is permanent. As proof of that, this year, just in this very month of February that is just finishing. At the beginning of the month, we closed extension of main line of guarantees in Spain with the FSM in terms even more favorable than we have for yet another year. But we keep working individually with different banks to extend it. The important growth of the portfolio in the last 5 years that has been nearly 80% wouldn't have been possible if we didn't have a strong support of these guarantees, not just the banking guarantees, but also the caution policies that we use in certain geographies and for some customers as well as the North American insurers, the [ Bondi ]companies with whom we have around EUR 3 billion in guarantees. But Víctor, maybe you would like to complement on this.
Victor Pastor: Sure. Thank you, Tomás. Just to extend on this, this is constant work by the financial management area. And first, I should say at the beginning of this month of February, we extended the so-called FSM line with the banking pool we currently have for yet another year. And sometimes, there is specific focus in Spain like this year, and it's pretty obvious that the company has a business also internationally. We have a strong subsidiary in the U.S.A., another one operating in the Czech Republic, another important business, as mentioned in the presentation in Latin America. And besides working extending the capacity with Spanish institutions, which has been done since the Fitch rating increase and also after these results that hopefully would allow us to have greater capacity with Spanish institutions. For example, in 2025, in the Czech Republic, we have extended our lines with European, Austrian and German banks in guarantee lines for up to nearly EUR 50 million. In the U.S.A., this was extended with American banks up to nearly EUR 80 million. We also have bilateral agreements in Latin America, where we have increased our credit lines. And in general, our capacity between banking guarantees and caution policies is nearly EUR 5 billion in the group, which really makes a lot of sense because otherwise, we'll be unable to run these projects for those EUR 4.1 billion and having that other portfolio EUR 9 billion. So we keep working and we also have increase our possibilities in our capacity in 2025 and the financial community confidence keeps increasing. It has allowed us to keep working on all this capacity that I just mentioned.
Pedro Villanueva: Thank you, Víctor. We have some repeat questions regarding the non-strategic assets defined as such, mainly in the service in Canalejas divisions. And in Canalejas, there's another subreply asking whether the agreement reached would change the perspectives of sale or the sharing prices that we had regarding the management of that asset?
Tomas Jose Gonzalez: Well, first of all, the elimination of the uncertainty regarding the Canalejas asset is the relationship we have with our partner generated certain complexity in managing this asset. That has eased to now have more control and availability on the OHLA asset. That will be possible in time to give more value to the asset of the Galería and the Canalejas park in site. And we might be able to unlink it. It would not be immediate that maturity process of the asset may take a few months regarding the services, we've gone through these unlinkage process before. And now we are giving value to the company, and we'll keep doing so. Also paying attention to that unlinking process if there is an offer corresponding to the value of the company.
Pedro Villanueva: Thank you, Tomás. We just have two questions. I think we've replied to all of them. There may be some other specific ones regarding the balance sheet I will answer directly to the banks that are asking and the analysts. There's a question concerning the news that we have seen in some local newspapers in Latin America concerning our forecasted activities in some specific Latin American countries and more specifically in Chile. And the question is what do we have to say? Do we have any comments on these pieces of news and what's our perspective in the country?
Tomas Jose Gonzalez: Well, Chile is one of the natural markets of our company. We've been working there for over 40 years. Our order book has increased. Our track record is actually spotless. And this is why I was asking what the question was exactly because in the short -- in the last few years, we have faced 2 situations, the concession of Biobío, and this was an arbitrated negotiation with the client with the Ministry of Public Works to improve the terms of our contracts. because there were some delays when starting these works because we were lacking some permits. This is a highly technically complex project because this is about building 4 different hospitals in 4 different locations in one specific portion of the country in the Biobío region, which makes implementation very difficult. So these are delays that are non-attributable to the company, but rather to the lack of permits. And so the execution was delayed, as I was saying, but we have reached an agreement with the Chilean government, and we will move forward with this important award and the building of these 4 hospitals. There was another piece of news recently, and I don't know if that's the one that people are asking about, which is related to a small subsidiary that we have in Chile. This is a subsidiary that is hardly in operation. It was within the industrial -- our Industrial division, and it has lost traction and content in the last few years because it was in charge of projects that we're not really working on anymore. So we decided to wind it down in a petition. This is a normal process, and it will be continued in the next few weeks. But it doesn't imply as some newspapers wrongfully said that we are going to cease having a presence in that country.
Pedro Villanueva: And now another specific question concerning -- the question says the severe deterioration of our Industrial division in this year, what are perspectives for 2026 and further in the future.
Tomas Jose Gonzalez: Yes, the Industrial division had a complex situation this year for different reasons. First of all, because the renewable energies market, which is our specialization in this division is facing in some locations, specifically in Spain, saturation process or maybe if it's not saturation, at least a decrease in growth, which at the same time meant that projects were being slowed. We, at the same time, have started penetrating other markets, specifically in Latin America, and we will see a rebirth of these activities for 2026. So we hope we will outperform the situation in 2025. This was a situation which was due to market and company circumstances, and the situation of the different locations, but we are moving forward with this and in other locations.
Pedro Villanueva: Okay. And we have one last question because we haven't received any more. And if we receive any further questions, then they will be answered by our department. So what sunk cost has this overhead reduction plan had? And what were they more specifically?
Tomas Jose Gonzalez: Yes. So far, sunk costs were about EUR 10 million to EUR 11 million, and they are mostly related to some layoffs that we had to do. But these were very specific layoffs, more generalized layoffs where we are trying to eliminate redundancies and to, as I was saying in my presentation, do more with less because this is at the end of the day, what we will do to improve the results of the company.
Pedro Villanueva: Okay. We just have another question. This is a very generic question, but the same is very specific. And it's Tomás, where do you think the company value or the objective price should lay?
Tomas Jose Gonzalez: Well, this is a question for which we could have many answers. But in our opinion, our stocks are undervalued, because we are starting to see some value more clearly. But if we add up the assets of the company, I think everyone could reach that conclusion. I don't want to commit to a number, absolutely. But I think the reality will show what it is and that our share price will reach the position that we think you should have.
Pedro Villanueva: Thank you very much. And I would just like to reiterate that this presentation will be recorded and available for 1 week, and it will be available as soon as possible, and we are at your disposal. Thank you very much. Tomás, I don't know if you'd like to say a few more words.
Tomas Jose Gonzalez: No, just thank you very much for your attention. Thank you very much.
Pedro Villanueva: Víctor?
Victor Pastor: Same. Thank you very much to everyone.
Pedro Villanueva: Thank you for joining us.