ENCE Energía y Celulosa, S.A.

Good morning, ladies and gentlemen. Welcome to the NCEI fourth quarter 2025 results presentation. I will now hand over to Mr. Ignacio Colmenares, Executive Chairman and CEO, and Alfredo Avelio, CFO. Gentlemen, please go ahead.

Good morning, good afternoon, and welcome to NCEI's fourth quarter and full year 2025 results presentation. Thank you for joining us. I am Ignacio Colmenares, executive chairman, and today I'm joined by our CFO, Alfredo Avedio, and our head of IR, Ines Alvarez. Let me start with a strategic picture of our overall objectives. Our plan is simple to describe and rests on four pillars. First, growth in higher margin special part substituting BSKT. Second, local wood and biomass sourcing. Third, cash cost efficiency. And fourth, renewables EBDA growth, leveraging our position as the largest collector and manager of biomass in the Iberian Peninsula. Slide four summarizes the year 2025 and the fourth quarter. It captures the progress we are making on all pillars of the strategy. The bulk price environment was challenging for much of the year, but we saw a clear turning point at the end of the fourth quarter. At the same time, we kept moving the business forward. We improved our cash costs, increased the share of special pulp substituting BSKP, and continue to increase the renewables platform to deliver stronger results. In our PALP operations, we deliver a cash cost of 477 Euro per tonne in fourth quarter and 483 Euro per tonne in 2025. Our lowest cash cost since 2022, despite the impact of the Ponte Vedra strike. The cash cost improvement reflects structural actions in wood, logistics and harvesting, process optimization and productivity combined with tighter operational execution and a continuous improvement culture. On product mix, Special pulp substituting BHKP reached 30% of total volumes sold in 2025, up seven percentage points year on year, with a margin uplift of 37 euros per ton versus standard BHKP. The increase in special pulp substituting BHKP volumes was a result of targeted customers' programs, product development and qualification work, and our ability to tailor fiber properties to end-use requirements. We are positioning ANFE as a solutions provider rather than a standard commodity supplier. We also took a strategic step into FLAF, becoming the only non-BSKT producer in Europe. We started the ramp up in fourth quarter 25 with 125,000 tons of capacity. On the renewables, biomass to electricity generation increased by 6% year on year up to over 1.2 terawatt hour. And renewable industrial heating secured three landmark contracts in 2025. I would also like to highlight that Magnum's biomass to regulated electricity business has posted an EBITDA of 10 million for two consecutive quarters, third and fourth quarters, leading to an annualized EBITDA of 40 million, to be increased by an additional 10 million with the update of the regulatory parameters, which came into force in January 2026. In biodefined, La Galera delivered a 27% increase in annual production through operating initiatives and not through CAPEX, reinforcing the value of operational know-how and the scalability of this platform with 42 projects in the pipeline of which 25 are under permitting phase, late permitting phase. Financialized picking, The groups consolidated EBITDA was 83 million in 2025 and 13 million in the fourth quarter of 2025. BALT EBITDA was 56 million and Renewables EBITDA was 27 million. Magnum alone, 32 million. Alfredo will explain this in more detail. We also acted proactively on financing. We registered a new 200 million mark bond program in January, 2026, and completed the first 85 million issuance with a four year maturity and the 410 basic points coupon, refinancing all debt maturity in 2026 in the Palm business. In 2026, we see a more constructive market set up versus mid 2025. supported by firmer price momentum and a more balanced supply response. Operationally, we expect to follow progress on competitiveness with a structurally improved cash cost profile and guidance of 468 euro per tonne for 2026 cash costs. Alongside, continued mixed upgrades towards close to 40% of special part substituting BSKP. In renewables, the updated remuneration parameters for 2026-2028 support a higher regulated electricity run rate. We expect several industrial heating projects to reach startup during 2026 and the biomethane pipeline will continue to advance. Putting it all together, these numbers show why the plan matters. Local wood supply, special pulp mix upgrade, cash cost reduction, and renewable FBDA growth executed with capital discipline and balance sheet resilience. Our priorities for profitable growth are clear. Expand ELFE, special pulp substituting BSKP, reduce cash costs and convert our renewables pipeline in contracted long duration cash flows. Slide six considers gross parts prices in Europe and the market context behind the recent move up in hardware pricing. The market has been tightening since the end of last year. The year ends PIX DHKP benchmark in Europe closed around $1100 per tonne. The average in 2025 was $1086 per tonne. Gross prices. Since last December, main producers have announced several price increases of up to $1330 per tonne gross. Importantly, this pricing momentum is being supported by a solid demand and a supply side that is constrained, particularly in Indonesia. The Indonesian government, excuse me, revoked, excuse me, the Indonesian government revoked forest permit to 22 palm root plantations in West and North Sumatra, with potential long-term annual losses of 4 to 8 million tons of wood chips, equivalent to 1 to 4 million tons of BHKB. From an operational standpoint, weather-related disruptions in Indonesia have also reduced short-term pipe availability and made cyber procurement more difficult. These disruptions are not happening in isolation. Analysts estimate that the broader set of disruptions across the value chain could lift demand for market pulp by approximately 350,000 tons in 2026. In addition to demand already strengthened by fiber to fiber substitution and increased standards of living. At the same time, higher fiber costs are flowing through the system. Wood chip prices in China increased once the extent of the Indonesian damage was assessed, and eucalyptus wood chip prices rebounded in early February to recent November highs after a 21% spike since July due to heavy rains affecting harvesting. Overall, the message is clear. The market backdrop supports former hardwood pulp pricing, driven by a combination of solid demand, supply constraints, and higher fiber costs. That is precisely why our strategy is built around cost, fiber security, and disciplined growth in special pulp, substituting the escape. Continuing with slide seven, our product strategy is progressing well as a key differentiator. In 2025, special parts substituting BSKP accounted for 30% of sales volume, compared with 23% in 2024. These products deliver a higher margin, 37.37%. euro per tonne above standard BHCP in 2025, as they substitute higher cost softwood alternatives in multiple applications. These products are not a marketing label. They are an economical lever. When customers use our grades to substitute softwood pulp, they do so for performance reasons. that performance allows pricing discipline and, over time, a structurally higher margin than standard hardwood pulp. We are also achieving our goals on fluff. In the fourth quarter, we started a ramp-up of our first 125,000 tons Eucalyptus fluff pipeline, substituting BSKP fluff. This is strategic. because Fluff typically trades at a meaningful premium versus standard shallow pump, and we expect it to generate even greater margins as volumes ramp. The priority now is product homologation. We are making progress on eight different processes. Fluff ramp-up is not just a startup story. It's a market access story. Qualification takes time, but once approved, values tend to be sticky, and the product can remain in more stable demand and markets linked to the aging population and improve hygiene habits worldwide. Looking forward, our mixed ambitions are clear. We expect special pulp substituting BSKP to increase towards close to 40% in 2026 and to exceed 62% by 2028, supporting a structurally higher margin profile. As the special part substituting BSKP rises, our exposure to pure BSKP pricing decreases. ENFES position in the global cash cost curve improves and the business becomes more resilient through the cycles. Let me turn now to cash cost and competitiveness in slide eight. In 2025, cash cost was 483 or 478 euro per ton, excluding the impact of the fourth quarter strike in . and improved meaningfully compared to the 2022 peak. This was the result of tangible actions, local resourcing and process optimization, as well as operational improvements. We are not stopping there. We are focusing clearly on federal reductions. Ongoing initiatives are expected to reduce cash costs by additional 30 euro per ton during 2026 and 2027 with 2026 cash cost guidance at 468 euros per ton. This 30 euro per ton improvement is mainly based on the combination of our efficiency and competitiveness plan that accounts for 22 euros per ton the Navya Cost Reduction and Decarbonization Initiative that accounts for the remaining 8 euro per ton. On the efficiency and competitive plan, we aim to deliver an average annual saving of around 22 euro per ton to be implemented between 2026 and 2027 to process re-engineering, operational streamlining, and digital and AI enabled optimization. The work streams are very practical and execution driven. 15.15 headcount rationalization, improving yield and consumption ratios across wood, chemicals, and energy. rising reliability by cutting unplanned downtime, strengthening procurement and contracting discipline on key inputs and services, and simplifying the organization. Specifically, agreements have been reached regarding corrective dismissal procedures. In total, 141 posts will be amortized through voluntary departures, early retirement, and reallocation to all the growing business units within the group. On Navia, remember that we are executing a dedicated cost reduction and decarbonization program. The project was launched in first quarter 2025 and we expect commercial operation in second quarter 2026, achieving roughly eight euro per ton of annual savings in the second half of 2026. Taking together these initiatives underpin the expected 30 euro per ton cash cost reduction over 2026 and 2027 with approximately 15 euro per ton targeted in 2026, supporting our guidance of around 468 euro per ton cash cost. As you can see in slide 9, our strategic goal is simple. We are not only lowering costs. We are improving what we sell. Together, these moves are designed to place ENCEP as the most competitive producer on a BSKP substitute basis and to improve earnings quality throughout the cycle. Our cash cost reduction programs not only lower our cash cost base, but also strengthen our relative position on the curve in Dow cycles and increase our operating leverage in up cycles. As regards monetization, in slide 10, we completed the sale of energy saving certificates, CAES, for a rate amount of 40 million in 2025, fully cashed in. We also expect to register and cash additional CAES in 2026 amounting approximately 10 million, of which 6 million are cashed in the first quarter of 2026. We treat CAES as value realizations from operational excellence rather than a substitute for the underlying services. They support cash generation, but we do not build a business plan around them. Strategy is designed to be repeatable and resilient. Black-offs may help in specific years, but the pillars, local goods supply, product mix, cost, and diversification drive the long-term trajectory. Let me now turn to renewables in slide 11, which is the second strategic engine of the group. Regulated biomass electricity provides a stable earning base, and we have a regulatory tailwind. Recent updated remuneration parameters, starting in January 2026, improve remuneration for biomass to electricity and cogeneration. For our portfolio, This translates into an incremental run rate EBDA of around 10 million, taking the regulated electricity run rate closer to 50 million. Having said that, please note that we experienced extraordinary and constant heavy rains in the Iberian Peninsula in late January and early February 2026. This affected the quality of the biomass and challenged our operations. Everything has come back to normal and is going well now. Continuing with slides 12 and 13, beyond regulated electricity, we are scaling to business verticals. First, renewable industrial heating. Our target is 2 terawatt hour of thermal energy supplied by 2030 and the contribution of over 40 million to EBITDA. Today, we have one contract in operation, one in startup, and three projects in construction with a disciplined pipeline and required returns of above 11% ROC. As a result, we expect four industrial heating plants to start operations this year. Second, Biomethane. We continue to build a Biomethane platform in Spain which will produce more than one terawatt hour of biomethane by 2030 and contribute over 60 million to a BDA with return discipline above 12% rocky. This pipeline is substantial, with 25 projects already in the late permitting phase and the total pipeline of 42 projects. Biomethane leverages on long-term BPAs Over time, this creates an infrastructure-like business vertical with scalability returns. All these are long-duration infrastructure-like businesses anchored in local biomass supply chains. Precisely, they will have solid structural advantages. I will now ask Alfredo to summarize our financial position. Thank you, Ignacio, and hello, everyone. When looking at 2025, you will see two realities at the same time. First, the headline EBITDA is lower year-on-year because 2024 benefited from a much stronger pulp price environment. Second, the delivery of our strategic targets continued. We increased the weight of our special pulp. We launched our first plot line. We continued to cash costs. to cut cash costs, and we kept building our renewable biomass backbone growth platform. With that in mind, let's start with the income statement in slide 15, where you can see the headline figures for the year and for the fourth quarter. At group level, revenues reached $747 million in 2025. Pub revenues were 544, and renewable revenues were 206. The variation in revenues year-on-year is explained by the lower net power price compared to the previous year, partially offset by high contribution from our renewables platform, despite its also lower prices year-on-year. Moving to profitability, consolidated EBITDA was $83 million in 2025, including $13 million generated in the fourth quarter, 6% higher than that of the fourth quarter 24th. To put that in context, in 2024, deliver 164 million euro VBA, being the year-to-year delta, essentially, the Pulse pricing cycle, partially mitigated by our cost and product misactions and by significant value capture initiatives, such as the monetization of energy efficiency certificates. Let me now talk about Pulse first, because that's where the cycle is most visible. In pulp, EVDA was 56 million in 2025 compared to 138 in 2024. The main driver is the net pulp price environment. Reference price for shore fiber pulp averaged 186 US dollars per ton in 2025 compared to 1,236 in 2024. In the fourth quarter, the average was around 1,070 And the European peak gross price closed the year around 1,100. But the bottom point is not just where the average was, but what the end of the year trajectory is. Producers have already announced price increases into 26, reaching up to 1,330 US dollars, reflecting a timing supply-demand balance. Now, while the price cycle is exogenous, the mix and cost are not. and 25 is a year where we will experience measurable progress on both. First, regarding mix, our special pulp that substitutes more expensive long fiber pulp accounted for 32% of sales in 4 quarter 25 versus 24 in 4 quarter 24. This special pulp generates an incremental margin of around 37 U.S. per ton versus standard pulp. In the fourth quarter, we started up with customer qualification processes for our first slough fault line with capacity of up to 125,000 tons. Third, cash cost in the fourth quarter was 477 per ton versus 521 in the same period last year, including the December Ponto Verde price tag. Beyond the ABDA line, you can see how the cycle flows through the net income. As a result, All business recorded a net loss of 42 million in 2025, including a provision related to our efficiency and competitiveness plan of 24 million euros. On renewables, in 2025, energy sales volumes increased by over 6% to 1.2 gigas, and the full-quarter production rose almost 10% versus the same quarter of last year. Revenue also increased by around 5%, up to $206 million for the full year. EBDA was $27 million in 2025, up 4% year-on-year, and $10 million in the fourth quarter, including approximately $1 million of development and ramp-up costs for growth platforms, biomethane, and renewable industrial heating. The base biomass into regulated electricity business showed a solid performance, reaching 20 million EBDA in the second half of 2025, therefore increasing its run rate average up to the 40s. And additionally, the recent remuneration updated will increase it up by approximately 10 million euros per year for a target production of 1.4 gigas. Below EBDA, renewables reported a net loss of 15 million euros for the year, including a specific impairment charge on a PV development project, partially offset by tax credits. Getting now to slide 16, let's enter into cash flow. In 2025, we achieve a positive free cash flow before working capital variation and growth and efficiency capex of 12 million euros, while executing 59 million euros of growth and efficiency capex and maintaining our asset base. Let me walk you through the underlying dynamics. In the pulp business, operating cash flow was 55 million in 25 versus 87 in 24, consistent with the lower price environment. In the fourth quarter, operating cash flow was 16 million euros, up from nine million euros in the fourth quarter 24, showing the benefit of improved cash cost and special pulp mix. In the renewal business, operating cash flow In our accounts was 9 million before the 14 million euros of CAPEX related to industrial heating business that are registered as inventory changes rather than in the CAPEX line since the assets will be finally acquired by the customer. Working capital improved in this business by 11 million due to lower IRs level in the set lower price environment. Regarding CAPEX, total investment was 114 million versus 125 guidance. and of which 59 are strategic, namely in the power business, we're including the new FAP line, or the Navia cash cost reduction and decarbonization project, and the renewables, the industrial heating, and the biomethane development. Regarding cash flow, importantly, for 26, following the constitutional court decision on the limitation of tax loss offset, we expect a cash refund of roughly 23 million euros, related to activity tax losses. This is a tangible cash relevant item expected for first half 26. Turning now to slide 17, the message is straightforward. Strong liquidity, long-term maturities, governance free in the Pulse business and a capital structure that supports a strategic execution. At the end of 25, Consolidated net debt was $378 million, compared with $321 at December 24, privately explained by our investment program and by working capital movements. Importantly, we closed the year with $241 million of cash on the balance sheet, which provides optionality. It allows us to proceed with CAPEX after working capital swings and still remain in control of the balance sheet. We also actively manage market risk that could otherwise translate into balance sheet volatility. On FX, we maintain rolling hedging policy to reduce the impact of euro-dollar volatility on bad results. In 2025, that policy delivered 8.4 million euros of positive settlements. For 2026, we have hedged a nominal amount of 80 million dollars with an average cap around 1.19 and a floor around $1.16 per euro. On energy price risk inside renewables, we also use hedges designed to replicate the regulated methodology aiming to stabilize returns. In 2025, hedges cover around 60% of volume acceleration and hedge settlements offset the deviation between the market prices and their regulators estimate. If you look at the maturity schedule, On the right of the slide, the key takeaway is that maturities are spread over time, reducing refinancing claims. Together with the fully available 150 million euro revolving credit facilities, this provides a liquidity buffer that is meaningful relative to the volatility of commodity markets. Also, at the beginning of 2026, As our Executive Chairman has said, we have registered at the MARF a 200 million euro four-year bullet bond program with the aim of continuing with the diversification of our financial sources. Our first issuance was successfully launched, placed, and was subscribed in February ending at 85 million euros with a fixed coupon of 110 basis points between 2030 and and fully absorbing all the financing needs for the whole year 26. This is a clear signal from the investor community of the reliability and resiliency of our company, even in the low part of the cycle. Now, after covering the financial and balancing performance, I want to step back and show you how our sustainability leadership reinforces competitiveness and protects returns in slide 18. NCS view is pragmatic. Sustainability is a tool to be more competitive and to capture returns. Let me make the connection explicit. Each pillar links to value creation and each reduces a category of risk. First, the efficiency operations. This is about operational stability and cost. In 4Q25, we achieved historic performance of zero order minutes recently in AVIAC. and we also achieved a historical record for the lowest specific water consumption. We maintained 100% zero waste certification across our pulp and energy sites. In Ponte Vedra, our water recovery system completed its third year of operating, improving resiliency to drop risk. These are operational KPIs, but they translate into fewer disruptions, lower compliance risk, and a stronger social license. Second, by products and ecosystem services. This is about top-line potential and strategic positioning. You have already seen that 32% of our sales in Fall 2025 came from Special Pulp, substituting more expensive BSKP with higher margins and growing demand. In the quarter, we achieved three new sustainability certifications for Floodpulk, reinforcing market access and customer preference. On forestry, by products and ecosystem services, we continue to improve plant material, including the development of new eucalyptus clones, better adapted to climate change, and we also expanded the registration of forest carbon sinks over 4,300 hectares. This is about building long-term asset base with increasing optionality and monetization pathways while maintaining biodiversity and responsible management. Third, Responsible supply chain. This is about being the preferred sponsor party. 100% of sites certified under the SURE system for sustainable biomass. In 4Q25, we deploy a new third-party due diligence procedure to reduce risks related to human rights and environmental impacts along the supply chain, and we also obtain PEF certification for biomass trading. These measures reduce reputational and compliance risks. Fourth, positive social impact. It's our talent and community stability, which is a gain and risk and return topic. Our safety performance is well above sector benchmarks, as you can see in the slide. On talent, 30% of managerial positions are held by women, and 41% of jobs opening were fulfilled through internal promotion. This is a sign of organizational strength. On community engagement, we launched a new edition of the Pontevedra Social Plan, Supporting 204 initiatives and the rural communities, we provided more than 950 technical advisory sessions to forest owners and delivered a new edition of forestry machinery training. These actions strengthen the ecosystem in which we operate and reduce long-term operational risk. As said, FAA sustainability leadership is not about scoring well on ESG frameworks. It is about increasing returns and lowering risks. Now, let me hand back the video presentation to our Secretary Chairman for the closing remarks. Thank you, Alfredo. Let us finally look at slide 20 with the outlook for 2026 and some closing remarks before inviting your questions. Putting all of this together, our strategy is consistent and disciplined. One, increase volumes of special pulp substituting BSKT. Two, local wood supply. Three, reduce cash costs. And four, expand renewables platform EBDA while protecting the balance sheet and maintaining capital allocation discipline. To summarize the year and the setup for 2026, I wish to highlight four messages. each one part of our strategy. First, the palm market is improving, but we are not waiting for the cycle. We are positioning ENCE to perform throughout the cycle. Hardwood price momentum strengthened in early 2026. Demand is solid, and the supply side is temporarily constrained, including the Indonesian fiber disruption we discussed. that supports more constructive pricing environment versus 2025. Second, our mixed upgrade continues. We expect special part substituting BSKP to increase volume to close to 40% in 2026. Key priorities will be with the flat ramp up and continued qualification work. Our objective, is to deliver structurally higher margins by substituting solid part. Over 62% of our sales will compete against BSKT by 2028, positioning ANSE as the lowest cost producer in the BSKT cash cost curve. Third, we are following a clear operational plan for improved competitiveness. We are reducing cash costs to around 468 per ton for 2026, supported by our efficiency and competitiveness plan and the NADIA Cash Cost Reduction Initiative, and we remain focused on execution. Fourth, the Reliable's platform continues its diversification, pushing for growth more than tripling its contribution by 2030. The operational improvements in second half of 2025 and the updated regulatory parameters support a higher run rate for the regulated electricity business. We expect four industrial heating projects to start up during 2026. Our biomethane pipeline will continue to advance. Thank you. We now invite your questions.

Thank you. Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press star 1 on your telephone keypad. You will have the opportunity to ask all the questions that you may have. We kindly ask you to ask only one question at a time to our speakers instead of asking multiple questions at the beginning. You may recue by pressing star 1 again. Thank you. And if you are using a speakerphone, please lift the handset before pressing any keys. One moment, please. for your first question. Your first question comes from the line of Alvaro Bernal from Alantra. Please go ahead.

Hi, thank you for taking my questions. I have a couple. The first one is regarding the Biomethium platform. I've seen you push back targets over a year. If you can give us more color of what problems you're encountering here and what makes you comfortable with meeting your current targets. And the second one is a quick one. It's just about the commercial discounts that have been agreed this year. If you can give us some disclosure regarding this, it would be very helpful. Thank you.

Yeah, thank you very much. Yeah, regarding our biomethane platform, we have eight plants who have almost what we call in Spanish the AAI, Autorización Ambiental Integrada. Everything has been done, everything. Now it's the administration who has to move. Some are in Catalonia, some are in Aragon, some are in Castilla Leon, but the fact is it is not moving. The administration is going very, very slowly. None of these eight projects have social opposition. We expect them to be ready to build by mid-2026 or on the second half of 2026. And then we will start construction, I would say, one of them, at the same time, to be prudent. And we think that we will start construction by the end of the year, but not before. That's the vision we have today. That's what we have reflected on the presentation in slide 13. If things move quicker, well, we will go faster. Regarding your other questions, yeah, it's interesting to talk about discounts. European gross pulse prices close the year at $1,100. dollars, as you know, and the discounts last year were on the range of 48 to 49%. There were deficits on the discounts in the negotiations for 2026. Those negotiations were between December and January. And I would say that in general terms, BHKP has been sold by the market at an average discount of 53 to 54%. By two reasons, you will see in our figures a lower discount. This 40% special part substituting BHKP we are selling is sold at a higher price. and then it diminish the discount. And secondly, the less standard BHCP palp we have, the better prices we get. Because what we are changing is let's say the worst customers, the worst destinations with these special palp. And that is why within this year, as I told, you will see between 51 and 52% discount for everything. Thank you. Understood.

Thank you.

Thank you. Once again, that is star N1 to ask a question. And your next question comes from the line of Cole Hartran from Jefferies. Please go ahead.

Good afternoon. Thanks for taking my question. You've got a lot of, moving part impacting your cash flows in 2026. And I was just wondering if you could just remind us all nicely the key moving items. So, you know, you've got the benefit from your tax losses. You've got various other items. Would you mind just listing the cash flow impacts and then also giving us some color of how you think about CapEx in 2026?

Yeah, let me give you a rough figure, and then Alfredo can go on more detail. As extraordinary incomes, we have, as you mentioned, the 23 million euros of taxes. We think we are going to collect that quite soon. As extraordinary outflows, we have redundancies. I estimate we are going to have a cash out of between 12 and... 14, 15 million euros a year. As another extraordinary income, we have CAES, I think a minimum of 10 million euros during the year. And then we have the CAPEX. Regarding CAPEX, Alfredo will go on details. We are talking about 74 million euros from the PAL business and 46 million on the renewable business. And maybe, Alfredo, you can give the breakdown. Yeah. I have to say that most of it comes from things already made or for things that are almost finished. Like in the power business, the 74 that Ignacio was talking about, you include, remember the generation through Biden and Navia that have approved in the past? Well, there's like 5 million there. We have the end payments of the NAVYA 80 investment that we've made off in the past that accounts for 16 million euros. You have the FLAF for around 8, and you have the rest of the NAVYA reduction cost and the colonization project for around 18. So you have all those extraordinary on that part. Regarding the renewable, We are including, as Ignacio was saying there, starting payments of maybe one of the biomethane plants. We have the biomass trading expansion, and we have the renewable industrial heating. All those projects that Ignacio talked about are all CO2 ones. Sorry, all those projects go in the line of 19. And we are also starting with the CO2 development. We are expecting capex of around 7 million euros in this item. So most of it are kind of either growth or expansion projects that will start up in 20 years, or we are starting to invest in them for future cash flows. But the starting, I think, are the ones that Ignacio has mentioned before. Yeah, what is important is out of these 74 millions in PAL business, 14 are maintenance. We have to add the 5 million euros of the repair of the turbine who failed last year, Nadia. And as Alfredo was saying, we have outstanding payments of the old project of Nadia 80, who was performed a few years ago. And then we have for grow and for efficiency on the palm business, 35 million euros. And regarding renewables, well, out of 46, 10 million are maintenance and 36 million are for growing.

That's clear. And then if I follow up with the shift to more speciality grades of pulp, moving the product mix to, you know, 30% this year and 40% next year, It's a big movement in your mix of pulp sales and congratulations for doing it so quickly. I'm just trying to understand one of the key benefits for that is when the softwood pulp price is at a substantial premium to hardwood. How do you think about it now that the gap has narrowed with hardwood rising, particularly in China, if it slows and kind of narrowing in Europe? Will there be any challenges there? getting people to switch down to the speciality grades?

No, we don't see this challenge today. Now it's five years we are selling these special bulbs. We have problems to keep this, let's say, 36 euro per tonne extra margin when the gap between shortwood and hardwood is lower than 150. When this gap is above 150, well, we share the benefits with the customers and we get these 36 euros per ton on average. We don't see a problem today. And the vision we have is that, well, the gap will continue this year and in the future. Yeah, we see less and less offer in BSKP.

Again, then maybe just following up on the cash costs, you've been very clear and it's a helpful slide from the outside in to see the cash cost development down 15 euros a ton this year and then 15 euros a ton next year. But I suppose there have been some extraordinary impacts from strikes in the fourth quarter, a little bit of strikes in Q1, and now that's all resolved and behind you. Are you comfortable with delivering those cash cost numbers? Are you confident on that delivery and there's upside?

Yes, absolutely. We have checked the number once the strike was finished and before preparing for this conference. And the impact of the strike in Navia between January and February had been 5 million euros. Very similar to the strike we had in Pontellera, another 5 million euros. 5 billion euros of Pontevedra is in 2025. The 5 billion euros of Davia will be on the first quarter of 2026. And when we say 468 is included for the extra cost we have during the strike.

That's clear. And then, you know, that's all your own internal help actions that are delivering that. I'm just wondering... if there's also any benefit from lower wood costs. I mean, we're seeing some slightly lower wood costs in the Nordics. Well, not slightly lower. We're seeing lower wood costs in the Nordics, and I'm just wondering if there's any downward pressure on wood costs in the Iberian Peninsula.

No, unfortunately not. In this decrease of 15 joules per tonne for this year, we see a slight reduction on the cost of the wood. But on the price of the wood, we will continue doing what we did last year, is to reduce the cost of the transport and to reduce the cost of the harvesting. But at the end, we will keep the prices we are paying to the forest owners. We are reducing logistics, we are reducing harvesting, and we are keeping the price of the wood. Then there is a very slight reduction coming from this side. Thank you. Very clear. Thank you. Thank you very much.

Thank you. There are no further questions at this time. I want to hand the call back to Mr. Ignacio Colmenares for any closing remarks.

Well, thank you very much, all of you, for your attention and your questions. We are in contact. Any doubt you have, you can contact Ines, Alfredo, or myself, and we will meet soon at the end of the first quarter. Thank you very much, and good afternoon and good evening. Thank you. Bye-bye.

This concludes today's call. Thank you for participating. You may all disconnect.