Global Dominion Access Sa

Good afternoon and welcome to the Blue Grots presentation. Before starting, I would like to remind you that once we finish the presentation, we'll have a Q&A session. You can leave your questions in writing in the Q&A section or you can intervene via telephone or by raising your hand. So we're going to start off with a presentation and Miguel Barrientilante is the speaker together with Roberto Tobias is the director and Patricia Rejon is the director of corporate development. Hello, good afternoon. Thank you very much for attending this call. for the 2024 fiscal year. But before talking about the figures of the year, I'd like to mention some events that happened at a global level in 2024 and which have a direct or indirect influence on the company. Everybody knows about the war in Ukraine and Gaza, the elections in France, Mexico, the Dominican Republic and the United States and the blockade of the main European economies, which I think that we already assumed in our strategic plan. And in the strategic plan, we knew that uncertainty was going to stay for a long time. So that's why we think that it's relevant to not only make our businesses more profitable. In 2024, we have advanced in relation to the three pillars in the strategic plan, that is, the pillar of recurrence, of simplification, and sustainability. And in spite of the constant uncertainties, we now have a business in which the most recurrent activities, which are mainly services, already account for more than 70% of our sales and more than 60% of the contribution margin. And as we will see, these are the activities, these recurrent activities are those that are behaving much better in terms of growth and profitability. We've also made major progress in the simplification process with a divestiture of activities that are not in line with the sustainability strategy. And we have, for instance, the sale of the multi-technical services in Spain in October. and this sale was formalized after the approval from the CNMC on December the 5th. And with this divestiture, we are doing away with 100 million in invoicing that had a very low margin, much lower than our average and lower than our targets with less than 5 million euros in EBITDA. And we reduced our workforce by about 1,500 people. And with these operations, we are focusing much more what it has to do with our strategic position relative to the future, which is the third pillar, sustainability. In other words, activities that help our customers to meet their environmental sustainability objectives. And in this regard, we've taken steps for this position to become much more tangible and to speed up growth in the next few years. At the beginning of 2025, we created a new company structure called Global Dominion Environment, GDE, where we have all of the activities related to sustainable industrial transitions. and which cover two main areas, circular economy and decarbonization. This new structure has its own objectives for 2025, and it wants to reach nearly 500 million in turnover and more than 50 million in EBITDA. And it has expansion plans that are both organic and inorganic. And under this new umbrella, we will boost and reinforce the portfolio that the company already offers in this area, and we'll pay special attention to services, industrial cleansing, waste management, circuit economy, energy efficiency, or reduction of emissions. And this will be an enabler of the transitions to address the challenges that our customers have. And we have another two transitions that we were going to deal with, the energy transition and the social and digital transition, and which cover the historic business of the Dominion divided into services and projects. Under services, we have the telecommunications network and electricity and logistics. And under projects, we mainly have the social things like hospitals or the deployment of transmission networks and renewable projects. So apart from in the next quarter, we will give you some information on our structured services project and anything that has to do with this. So that's how you'll be able to identify the different dynamics that these business have and monitor what's going on. So once we've spoken about the strategic advances, we're now going to review the results of 2024. and we're halfway through complying with the 2023-2026 plan. And we've closed the year with a business figure of €1.1 billion, which means there's organic growth of sales of 2%, and a year with a lot of growth of inorganic growth and forests that have deducted 3% and 2% respectively. And in this inorganic growth of minus 3%, we've included the divestitures of the multi-technical services in Spain for Ceraveo, and lower sales because of the change in the B2BGC business model and because of other smaller diversified geographies. This business figure is 33% in America, 59% in Europe, in Africa, and 8% in Asia and Oceania. And activities have grown a lot in Spain and in the rest of Europe and have gained relative rate vis-a-vis the rest of the geographic areas. And this has been brought about by good performance of the telecommunications services in Germany in environmental sustainable services in Spain. On the other hand, we have the finalization or the postponement of some important projects like those in Angola or in the Dominican Republic that have had less weight in 2024 compared to 2023. Contribution margins still remain at high levels, and in particular with a growth of 3% compared to 2023, although we have made divestitures throughout the year. And as regards EBITDA, It has increased up to 150.7 million euros, which is the target that we had set ourselves for the year, and where the lower project activity, which has had minus 9% organic, has been compensated by the very good performance of services that have grown by 7% organic. Margin of services has also improved significantly with a plus 18%. We've reached an EBITDA of 13.1% over sales, which is a landmark because it's the first time that we've reached 13% and we consider that these levels can be maintained thanks to the simplification process and to our approach related to more profitable activities. It has to be underscored that EBITDA data show a recurrent situation to the company. because throughout the year we've had some extraordinary capital gains, like the sale of the multi-technical services to Cerebro, that have been compensated by other extraordinary negative results. And we here include the expenses for the commissioning of the wind farm in Taritos, the restructuring of certain activities in some countries, like France, or measures for the efficiency of certain contracts regarding projects and services. And now the amortizations remain at the same levels as in 2023, so there are no relevant comments to be made as regards the total financial result. There's been a slight growth compared to 2023, brought about by a higher level of indebtedness and because of higher interest rates, and part of the growth of the financial expenses has been compensated by exchange rate differences, positive exchange rate differences in Q4. And in 2024, we have refunded the syndicated loan with conditions that are much better, whilst as regards interest rates, well, the European Bank has not put them down, and we will see the results in the next few months. And as was established in our strategic plan, and although our level of debt is at a healthy level of 1.2 times the DFN over EBITDA, this level of debt is just a transition in which Dominion is now simplifying and transforming our strategic plan. In this regard, 2025 will be a year when we will see several elements that will produce a reduction in the level of debt. And the most important thing is the divestiture in the Dominican Republic of solar farm. And our net comparable result is 40 million euros, which is 12% lower than the previous fiscal year, mainly because of a higher financial expense and also because we paid a higher corporate tax. And the attributable net result, once we've deducted these interrupted activities, reaches through to 1.2 million euros. and these expenses correspond to the wind farm of Mexico and in particular to the financial expenses of the debt itself. And you know that this wind farm is to be commissioned and it's producing power or will be doing so in the first half of 2024, 2035. And now let's move on to the business segments. We've already mentioned some of these issues. Sustainable services have grown organically 7% in terms of the business figure, but this is a very important thing, and the contribution margin has grown by 30% compared to 23%, and it now stands at 3.3% over sales. Both growths are much higher than the targets of the guidance, thanks to the growth of business associated to sustainability and the environment with higher margins, and also because we've made these divestitures that deducts That is inorganic and the impact of forex would be another 4%. And all of this, the conclusion is that there's been an increase in the weight of sustainable services relative to the total turnover of the company. As we said, 73% of the turnover has to do with services, 65% of the total contribution margin that is associated with services. And as sustainable services are defensive, we can see how the financial statement of Dominion is increasing its recurring character, and this reinforces the objectives of the strategic plan. As regards the Project 360 degree segment, we've postponed execution of projects during 2024, which meant that we've had a lower turnover compared to the previous year. It's been postponed, as it were, and, well, this has had a bigger influence On the fourth queue, comparatively speaking, and this has been due to geopolitical situations in the Dominican Republic because of the elections that took place in May in Angola where, well, there's not enough budget to carry out certain projects in that country. And then as regards Europe, the execution of renewable projects has been stopped by Dominion so that we can incorporate a partner in the DEX together with us. And this agreement was subscribed in December 2024 with Equita Capital through its fund for renewable energies, Equita Green Impact Fund. And this is how we can reactivate the execution of renewable projects in 2025. And for the rest of the projects, both industrial as well as in the case of social infrastructures, the rate of execution has been good. And we have been able to maintain our levels above 300 million, well, there's 637 million that guarantee stability of the segment. And in 2024, there are several things that have to do with the industrial sector with some relevant projects in the United States and Canada. And the contribution margin reaches 19.4%, and it's far above 15% that was established as a goal. And it's not affected in spite of the lower levels of turnover. And finally, as regards our stakes in infrastructures, all the variations compared to the previous year have to do what had to do with the Caritas photovoltaic farm and some extraordinary expenses that we've had in the fourth quarter that are not going to happen again and in spite of it the this our stake in infrastructures has nearly contributed seven million euros to the traditional business so in this area of infrastructures what we have We've started to produce energy in the Dominican Republic, and the first of them was started in April 2024 with a capacity of 65 megawatts, and has symbolically supported our turnover in 2024, whereas the other two with a joint capacity of 140 megawatts started to produce energy in January this year. And finally, and although I have already explained this before, the Cerritos wind farm, is now up and running and with all the permits so that it can be commissioned and it's now undergoing its deployment or its commissioning process which will finish sometime in the first half of 2025 and then once that's done we will make a divestiture and we will then listen to the offers that were made and which could not be accepted because the wooden farm was not in operation so okay now As regards the balance sheet, let's say the following. Well, we have a fixed asset movement and a decline of about 23 million euros compared to 2023 that has been brought about by changes in the perimeter for divestitures. And here, steel comp has been included under continued operations after being available for sale in 2022 and 2023. There's been no agreement, but it's been restructured, and it's now making a positive contribution. And then we have net operating circulating cash flow. The investment is at €22 million, and this includes investment in structural elements, €40 million, because of the restructuring of the B2C business, and also with the sale of the multi-technical infrastructure maintenance services, and which they have some variations. And the net financial debt has increased by 107 million euros compared to 2023. And this corresponds to the flows of inorganic payment of the fiscal year that occurred in the first half of the year mainly. And this is why we can see that the main increase took place in the first six months, and as regards the semestral figure, the closing figure was reduced by €15 million, where the main effects are the generation of operating cash flow, and as regards payments, there were disbursements, and we paid out the dividends, and the sum, the final sum at the end of the financial debt is €182.9 million, which is equivalent to one point times EBITDA, and This debt has a temporary character and will be reduced as we divest different infrastructures. As regards the generation of operating cash flow, which is one of the main focuses of the company this year, it was 76 million euros. And this has been destined not only to the corporate operation of that transformation, but also to the payment of dividends for shareholders, that is 14.7 billion euros, and minority shareholders, 1.4 million euros, and also for the share program for the managers with 11.7 million euros and the structural investment in CNO of 40 million euros and the 9 million euros that correspond to interrupted operations. In terms of CAPEX, it has to be pointed out that in addition to the 20 million euros of maintenance CAPEX, we have destined this year to the expansion of different activities, among which we have the renting of mobile devices or the new developments in renewable infrastructures. As a conclusion of all of these results and of all the data that I've just been pointing out, it can be concluded that the Global interpretation is positive with recurrent activities at high levels in terms of organic growth and also with regard to margins, which we believe is a very important thing. We have reached the middle of the 2023-2026 strategic plan and 2024 was the year of transformation. in which we've made significant changes and taken decisions required so that we can cover these three pillars and objectives of the plan. And these changes and decisions allow us to lay the foundation so that we can achieve the goals and we'll place us on the right path so that we can address the two final years of the plan during which we have the mission of transforming Dominion into a company of sustainability, 360 degrees. And before finishing... We think that 2025 is going to be the year in which we're going to be executing all these plans, which is when we will carry out the main divestitures of our businesses, which will allow us to reduce our net financial debt. And this, together with lower interest rates, will we hope that our financial expenses will be reduced. And that means that we will have better results in the fiscal year. And additionally, and although this strategic plan is focused on organic growth, we will work to achieve more growth through a buildup focused on environmental sustainability structure. So the end result of this plan, and especially in 2025, means that we will submit to the AGM proposal to maintain and pay out the dividend of 50 million euros, which is 38% of the comparable net result in other words, this is over and above our initial commitment. And that's all from me. Thank you very much. Thanks for your attention. And now we're going to move on to your questions. So it's the Q&A session now. Thank you. from Santander speaking. Hello, good afternoon. Can you hear me clearly? Well, I've got two questions only. Firstly, you spoke about the objectives of Dominion Sustainable Environment. You said something about 15 million euros. Could you please compare this with 2024 to see what it is you expect exactly? And Patricia, do you think that everything will be ready and connected and up and running by the first half of the year? So what do you think about the projects in the Dominican Republic as regards possible diversities? Thank you. Hello, Carlos. the first question you're asking is about the targets we've set for 2025 which is what we've shared in the presentation well as we're going to be implementing this we will obviously give you the data the comparative data with 2024 and well as that is not our reporting technique we have not yet given any further details and then on the other hand oh yes well And then as regards visibility in terms of the competitive sale process that we have in the Dominican Republic, I think that we've reached the final stage. We've received binding offers, and we are now looking into all of them. And here, well, let's say that it will be towards May when we will be studying these projects. And Patricia, as she said, it's generating power and energy. And the project has received all the approval of the commercial operating date. So we will assess the situation and we will discuss the different offers during the board meeting. And our idea is to try to finalize this in the first half of the year. And this is what we can now say as regards our timing. And would you consider any other divestiture? I don't know, something in Argentina, for instance, in the biomass? Yes, but not yet, not with a commitment for this year, because we're waiting for the economy to improve, and then after that we would sell the operation. And as regards your question, the goal we have in organic terms is 10%. Thank you very much. And the next question is from Jose Tamayo. Jose, sorry, we can't hear you. I think you're muted or perhaps you have a problem with your computer. Okay, well, let's move on to the next question then from Juan Carlos Jimeno. And why is it that you've postponed the commissioning of the Cerritos wind farm? Have you taken any measures to avoid problems of this kind affecting other projects? Well, yes, this was a completely unique project and it coincided with the 54 projects that have only happened in one country, which was Mexico. And it's a very rare case and it has to do With AMLO Lopez Obrador's administration, this was a irrational decision taken by the government to try to eliminate the advantages that these projects had. And they decided to stop all the permits of these projects. And this happened to us when we were building the wind farm. And the truth is that fortunately, what I dare say is that we, it's going to be less than 5% of those projects that we think that we're going to be able to carry out in full and connect, and this obviously has to do with the current energy bill. But in any case, it's an absolute exception, and this had never happened to us before. And the good thing is that it seems that this will end in a positive manner and without any kind of relevant effect for us, which could have been otherwise if we wouldn't have managed the situation properly. Okay, the next question from J.P. Capital from David Lopez is as follows. Thanks for the presentation. Your strategic plan talks about 9% growth of CAGR and free cash flow, which would mean that you'd reach about 92 billion euros in 2027. Could you confirm if with the sale of the Dominican Republic, when found with less financial expenses, the company would fulfill its objective of 92 million in 2025? Well, thank you very much for your question. But what I understand is that would we be able to reach in 2025 a cash flow generation of 92 million? That would be the calculation with regard to 2027 or 26 at the end of the plan. And although the flow would be reduced and there will be lower payments, we wouldn't reach those 92 million because the sale of the Dominican Republic Well, we don't consider it to be an operational cash flow operation. Well, for the sale of the wind farms, the creation of flow is much greater than that, but we don't consider it to be an operational cash flow generation. And our target of 9% has to do with operating cash flow and not with the total operating cash flow of the company. Okay, the next question comes from Diego Martinez, but in particular it's three questions. Anyway, let's answer them one by one. As regards to the Cerritos project, the idea is that the divestiture take place in 2025 or would it take place in 2026? The financial debt of infrastructure reaches $125 million. Have you estimated how much this would be reduced with the sale of this project? Are there any other infrastructural projects that could be sold in 2025? Well, it seems that we will be divesting Cerritos in 2024. That's the most probable scenario. That would be the idea. And with the sale of Cerritos, as you know, This is available for sale, and there's an ad hoc funding of $80 million. So net cash generation will be the difference between the final price and those $80 million for the Enterprise Federated Project and these $80 million. And some other infrastructural projects that are also going to be finalized in 2025. We're now in process with affordable dike projects that we've implemented in the Dominican Republic. And the net financial debt for infrastructure is $127 million. It's correct that if we were to sell all of these projects, well, we would then be in a situation in which this net debt of infrastructure should tend to zero. And this is why I think that in the balance sheet information, we differentiate between infrastructures and other items or the classical dominion. of the company that provides its services and solutions that allows us to be listed on the stock exchange. And it says, and the second question, as the financial expenses are those that are deducting most from the finalized of the account, do you think that it would be possible to reduce the debt by reducing dividends or repurchases? And well, the sale of services, that's already been collected, 100% of the It's been about €1.5 million that is based on the effective use of fiscal loans by the buyout. Well, this is still pending, but the rest of it is still on the balance sheet. So this is fully identified in the balance sheet of the company, in the closing balance sheet. And as regards to dividends or repurchases or buyout, we estimate that the dividend is €50 million, which is about 20% of the operating cash flow, which is about one-third of of the comparable results. Although it's also true that we've maintained it because we believe that the situation shows that there's a high financial expense level, but we have to do something about cash generation and also about the price of money, which as you can see, it's going down in Europe. And finally, the third question, have you solved the problems in the Dominican Republic and Angola to generate projects in 2025 and increase the sales figures in this segment? Yes. Yes. In the Dominican Republic, what we are still waiting for is for the new wave of PPAs that have to be released this year. And, well, after the tendering or the allocation of PPAs for PV projects with accumulators or batteries. And I think in Angola, I think Patricia mentioned this, we have a specific issue and that there are some relevant projects. But let's say that we are waiting for space to be allocated in the budget in the country. And based on that, we might be able to make progress and go there. It seems that this will open up this year and that we will be allocated this. But it wouldn't really affect this year, but it would rather affect the next year, 2026. Well, this question is for Jose Taballo from JVC Esco. And, Enceritos, if I understood you correctly, You've shifted this into the financial report. Is there any operating expense or any depreciation? Well, it's been about 90% have to do with ad hoc financial expenses, and there's a minor Mexican effect that has been rated as amortization, but it's about €700,000. And this is what we have, too, in interrupted operations, which affects the infrastructure in Cerritos. and in terms of EBITDA because this affects the project so to speak and these are what we call an extraordinarily negative results and these have to do with commissioning expenses or things that have to do with the infrastructure and they are then included on the EBITDA heading but And of course, in services, well, this is the most recurrent side of the company. We are operating with framework contracts with statistical recurrence. And we always said that it was 85% or 90%. I think that we are higher than those levels or higher than those automatic review ratios. So this is the part of the company that is most visible, that is most recurrent. And here we feel comfortable from the point of view of the fact that we will maintain that business for sure. And then in something else that I would like to say is that normally we're focusing on projects so the target is 15% of the contribution margin of the sales. And that's what we have in the portfolio. And this is what historically we have stood at high levels. There have been some specific operations that have allowed us to do so, especially in 360 and renewables. But it's equally true that as regards to the projects in which we had more industrial things, it was between 10 and 15%. So this is a mix, it's a blend, and I dare say that the portfolio is reasonable, and I think that it is pointing towards contribution margins of about 15%. Okay, let's wait to see if we receive any additional questions, either raising your hand or through the chat. Okay, the next question is from Gonzalo Sanchez. And with the shares at such a low level, do you think there will be a repurchase of shares when these assets are sold? Well, Mika can answer this one. Well, this is one of the things that we are looking into, and this greatly depends on whether we have any incipient M&A operations or if we decide to invest in growth. in sustainable environment or in the area of the circular economy or environmental structures or if we were to decide to repurchase. And right now we are considering both variables. Okay, the next question is from Juan Carlos Jimeno. Do you expect that there will be an increase in turnover in projects in 2025? The answer is yes. Because, well, 2024, because of geotestemic issues, It's been an extraordinary year in terms of projects, and we hope that our turnover, our project turnover will increase. But that's what we have contemplated in our budget. Okay, let's wait for a couple of minutes to see if there are any final questions coming in. Okay, well, with this, we are closing the presentation of results of 2024. Thank you very much for your questions, and thank you very much for attending the conference call, and we hope to see you soon. Thank you very much. Bye-bye. Goodbye.