Metlen Energy & Metals PLC

Ladies and gentlemen, thank you for standing by. I am Gailie, your chorus call operator. Welcome and thank you for joining the METLIN Energy and Metals PLC conference call to present and discuss the METLIN full year 2025 financial results. At this time, I would like to turn the conference over to Mr. Evagelios Mitilineos, Executive Chairman, Mr. Christos Gavalas, Group CEO, Ms. Fotini Ioannou, Group CFO, and other senior executives. Mr. Mitilineos, you may now proceed.

Hi, welcome. everyone who joined us today in the 2025 results conference call. All materials have been made available earlier today and can be found on our website. As already said, I'm joined today by Christos Gavalas, CEO, and Ms. Fotini Ioannou, Group CFO. I speak to you in my capacity as an executive chairman for the first time. Please let me say a few words about the key highlights of the 2025 financial results. Revenue increased by 25%, reaching a new record level and exceeding the 7 billion mark for the first time in our history, underscoring our strong growth momentum. On the other hand, EBITDA and earnings per share reflect a more challenging picture as they have been affected by the problems that we have already communicated with regards to our MPP division. Despite good performance of the core business amid a tough environment, EBITDA was down to $753 million. in line with the updated guidance we provided earlier this year. What is crucial is to see here the underlying power of our core business. MPP, although representing a non-core legacy business, has caused disproportionate losses. In light of this, we had to take immediate action and go ahead with unpleasant measures and difficult changes. Myself, alongside with Christos and Fotini and senior management, we are here to tell you about all the measures taken and drastic changes we have made to make sure this is properly addressed and left to the past. Today, I can confirm that the MPP responsible for past issues no longer exists in its previous form, and the focus will be shifted more on storage, DCs and grids, in addition, data centers, that is, grids, in addition to our conventional REST business. That is, the previous MPP has been absorbed by the previous MRES, and this is now one division. Turning to net profits, this amount is $315 million. Our liquidity remains strong, providing us with the flexibility to both navigate the current environment and continue investing, even as 2026 represents our peak CapEx year. At the same time, we remain committed to our dividends set at one euro per share, representing an increased payout specifically and only for 2025, and reflecting our confidence for 2026. I remind you that our traditional payout on dividends was 35% of net profitability. We make an exception today to compensate our shareholders for their loyalty and their devotion to the company. This decision is based also on our view that 2025 was an exceptional and temporary setback and that has the reported net income does not fully capture the underlying profitability of the business. As 2025 is now behind us, It is important to note that 2026 finds us having achieved a key strategic milestone with our relisting on the London Stock Exchange and inclusion in the FTSE 100 list, a powerful validation of our strategy and a first for a Greek multinational. About one year ago, during our Capital Markets Day, that was April 25th, In London, we outlined a clear roadmap towards our medium-term objectives targeting a new level of approximately 1.9 to 2.1 billion in EBITDA. Medium term stands for 2028 to 2030. In addition to our existing activities, areas such as critical metals, including gallium, Circular methodology and scaling up to our defense business are expected to further support our financial performance. During 2025, we have strengthened our corporate governance through big three organizational changes designed to ensure that we remain ahead of market developments and meet our growth objectives. I'm sure you have all realized that I have personally abandoned the dual role of chairman and CEO and I am very happy to have Christos Gavalas as CEO in the group. In the metals business significant progress was achieved in the development of the integrated bauxite alumina production line. Initial quantities of gallium have already been produced and our initiative on circular metals, the pilot plant has been already successfully commissioned. We are confirming recovery rates above 95% with application to all priority materials, and while relevant volume of captive feedstock is already secured, we are scouting and actively exploring additional opportunities in the global market. I would like to point here at this stage that the critical raw materials have been split from the aluminium value chain and they form now with the circular metals which is critical raw materials and circular metals a division of the metallurgy segment and we have agreed that the two, critical raw materials and circular metals, have many things in common in the production processes, in marketing and so on, and it's a better fit together. In M technologies, the defense hub in Evolos, which is now evolving into a comprehensive ecosystem of six factors, supported by international partnerships, including collaborations with companies like KNDS, IVECO, and others. In the utility business, Protergia further strengthened its position with a market share of 21%, steadily progressing towards the strategic target of 30%. In the renewable business, the successful completion of a landmark deal for solar and battery energy sources solar systems in Chile with total installed capacity of 588 megawatts and energy storage capacity of 1.6 gigawatt hours also highlights new opportunities, new capabilities arising from hybrid solar plus best projects. At the same time, the infrastructure and concession sector, MEDCA, is emerging as a stable growth engine, having doubled its EBITDA contribution in 2025, and now expected to approach its medium-term target ahead of schedule, potentially as early as 2026. Future outlook and comments on current environments. Beyond the 2025 performance, I believe many of you would be particularly interested in the implications of the conflict in Iran, which affects a highly sensitive region and has significant repercussions for energy prices, inflation, interest rates, and the aluminum market. This is not the first time that we have had to operate in a challenging environment. We have faced similar situations in the past and we have prepared the company to respond effectively once again. METLEN is well positioned to navigate such conditions as our business model is inherently resilient to market volatility. The coexistence of our energy and metals activities supported by a prudent hedging policy provides strong protection something clearly demonstrated during the currency crisis a few years ago, during the Lehman Brothers crisis, some early years, 2008, 2010. Christos will elaborate further on the specifics, but allow me to highlight a few key points. Aluminium prices are currently approximately $800 per ton above the average of the past 15 years, while many smelters are being forced to curtail production and the US dollar continues to strengthen. Premier prices have surged as the physical market becomes tighter. Supported by our hedging strategy, we are well positioned to capture very high margins going forward. We maintain uninterrupted access to natural gas as Greece has evolved into an alternative gateway for gas into the EU. Our recent agreement with Shell is indicative of the strategic role we can play in the wider region. Our utility business has demonstrated its ability to perform well, irrespective of price fluctuations in the wholesale electricity market. Reset with renewables and energy transition business is expected to benefit amid increasing concerns around security of supply in connection with the fossil fuels on a global scale. Finally, considering the evolution of our defense business, it is clear that it is well positioned in the current environment particularly given the structural undersupply in the market and the significant investment accepted in European defense. I will now pass the floor to Fotini, our CFO, to talk you briefly through the financial results in slightly more detail.

Thank you, Chairman. I will try and be very brief, as I think we will be having a much more interesting conversation through the Q&A. As the Chairman said, 2025 was a year of robust, top-line growth, where revenue increased by 25% to $7.1 billion, primarily on the back of our strong performance in the renewables platform. At the EBITDA level, We came in at 753 million, exactly in line with the guidance that we gave in early February. Down, obviously, about 30% versus 24. And as a result of the project execution-related losses relating to the ex-MPP segment that we have discussed a number of times in the past. Now, these project-related execution losses They all relate to the XMPP segment. They relate primarily to three projects in UK and Poland, and most of them relate to the PROTOS project, which we have covered again in previous communications. In response to that, we have taken a series of targeted actions to materially strengthen our execution oversight and the financial controls that we have in place, most important of which is what the chairman mentioned, which is the folding of the XMPP segment into the XM renewable segment in what is now renewables and energy transition platform, i.e., the XMPP segment will be managed by a team that has a stellar track record in EPC execution in time and on budget. On top of that, we have instituted enhanced accounting procedures to enable earlier identification of cost deviations and an increased cadence of project reforecasting and a much more thorough and challenging management review. What is important here to note is that we have performed a rigorous review of all the NTP projects that are still live, the vast majority of which will be delivered in 2026. We are currently at completion rate close to 90% on all of them, and we have already booked all the cost overruns to date and delay ODs and provisions for losses that may come up in 2026. Adjusting for the impact of these project losses, these execution-related project losses, and the partial monetization of the claim, our underlying EBITDA would have come in at above the 1 billion level. Now, moving forward to give you a little bit more color on the segmental picture, the energy transition platform revenue increased by about 26% to 2.3 billion, obviously driven by the strong performance of our renewables platform. On the EBITDA side, which came in at 86 million, the year-on-year decline is reflecting the project execution-related losses that I mentioned earlier that have to do with the ex-MPP segment. Key 2025 highlights for our renewables performance, asset rotation sales reached a record 1.5 gigawatts, underscoring the robust global demand for such projects and also Metland's unique positioning in this area. At a time, of course, where, as the chairman mentioned earlier, geopolitical energy volatility is reinforcing the case for renewable energy. Moving on to the integrated utility, a strong year, revenue rose by in a year where we proved for another year the importance and the strength of the integrated model that we run. Revenue rose by 18% year-on-year to $3.9 billion, where EBITDA stood at $357 million, roughly in line with 2024, reflecting our strong performance on the generation and natural gas, and also our pricing strategy in the electricity supply market, where we continue to gain market share. Moving to Metals turnover reached $907 million in 2025, more or less in line with 2024, representing around 13% of our total group turnover. EBITDA stood at $225 million, down more than 20% versus 2024, driven primarily by CO2 volatility and higher energy costs. we will be having, I think, a very interesting discussion about the outlook for our metals business in 2026, given also market developments. On infra and concessions, as the chairman said, the segment delivered another strong year ahead of our targets that we outlined in our CMD back in April. Turnover reached 567 million, more than double the level of 2024. and EBITDA also doubled year-on-year to 100 million. This performance obviously driven mainly by the significant expansion in high-quality backlog over the last three years and further supporting our view that this segment can develop into an increasingly meaningful and stable contributor. Turning to the balance sheet, balance sheet remains very strong. We came into the start of the year, closed the previous year with Exit liquidity of 3.7 billion, which is a combination of cash and committed credit lines with a lot and net debt at the end of 2025, which stood on an adjusted basis at 2.1 billion, excluding non-recourse debt, excluding non-recourse debt. Net leverage obviously up compared to our through the cycle target. at 3.1 times reflecting the lower than expected EBITDA of 2025. Of course, we anticipate as we move ahead with our plans in 2026, a very meaningful improvement by the end of 2026. In terms of debt maturities, we have a very comfortable debt maturity profile giving us breathing space until 2029, excluding every financing that we have in Q4 2026, which we of course have a lot of options on the table as to how we're going to address that. Going forward, 2025 was a year of challenges. It was a year of taking stock and moving ahead. 2026 looks said to be a year of financial discipline, resilience, and consolidation. Thank you.