Hochtief Ag

Good afternoon to everyone, and thank you for joining this HawkTeeth 2024 results call. I'm Mike Pinckney, Head of Capital Market Strategy, and I'm here with our CEO, Juan Santamaria, and our CFO, Peter Sassenfeld, as well as our Head of IR, Tobias Loskamp, and other colleagues from the Senior Management Team of HawkTeeth. We're looking forward to taking your questions, but to kick off, our CEO will run us through the details of this strong set of numbers and provide you with an update on our group strategy. Juan, all yours.

Thank you, Mike and Adim, and welcome to everyone joining us for this results call. Our growth strategy has delivered a very successful 2024 octave and will drive further growth in 2025 and beyond. we have consolidated leading positions in our strategic markets where growth is being driven by an unprecedented ramp-up in infrastructure investments by our public and private clients. We're deploying our geographic footprint to access this growth in all our regions, and we're expanding our presence in the value chains of these markets to enhance growth. This growth trajectory is supported by a solid balance sheet, a strong order book, and a strongly cash generative business. Turning to the numbers, a group delivers substantially higher sales and profits backed by another strong performance in cash flow generation. Group sales increased by 20% to 33.3 billion euros in nominal terms, accompanied by solid operating margins. Adjusting for the impact of acquisitions and divestments, sales growth was over 10% on a comparable basis. Octiv's operational net profit rose by 13% to €625 million in 2024, exceeding the top end of the guidance range of €560 to €610 million we provided to you at the beginning of the year. Nominal net profit of €776 million included a net €147 million one-off gain at our Australian company Simic & Campers, with €523 million reported for 2023. The quality for profit performance is underlined by Hochtief's outstanding cash generation during the year. Cash flow from operating activities in 2024 was over 600 million higher year-on-year at 2.1 billion euros, an increase of 100 million year-on-year on a comparable basis and reflecting a high and sustained level of cash conversions. Octave ended the year with a slightly net debt position of €120 million, adjusting for the impact of its strategic investments carried out in 2024, which I will describe later. We would have had a net cash position of €1.6 billion. Even after taking into account the €331 million dividend paid out to shareholders in July 2024. The group's order book ended the year at 67.6 billion euros and is up by 7.8 billion, or 13% on a comparable basis versus December 23. As a consequence of our strategy to further improve the group's risk profile, lower risk contracts, which incorporate enhanced risk sharing mechanisms, now account for well over 85% of our order book. As you will be aware, this proportion has risen substantially in recent years. The ongoing increase in our backlog reflects the strong growth recorded in new orders, which rose by 14% to 41.8 billion, equivalent to 1.2 times the work done during 2024. Around 50% of the new work we secured during the year relates to our growth markets. Let me reference a selection of some of our project announcements made during 2024 in these growth markets. At the end of the year, Turner, along with two partners, was awarded a contract with Meta to build a megadata center campus worth more than 10 billion US dollars in Louisiana, one of the largest projects ever announced in the sector. Pacific Partnerships acquired the development rights for the 700 megawatt Kogura Solar Farm and associated large-scale battery energy storage systems in New South Wales, which will be one of the largest in Australia. This was awarded an important three-year full-service mining contract in Ontario, which will help Canada's nickel and copper industry to provide critical metals that are vital to North America's economy. In Europe, Hochti won a contract for a semiconductor-related construction facility using clean room technology. And in Asia Pacific, Lighten Asia secured a 2.6 billion hospital expansion project in Hong Kong. HoCTIV has also delivered important projects in our key sectors, including transport infrastructure, education, airports, sports stadiums, and defense, where demand continues to show strong structural growth driven by megatrends and other related factors, such as increasing reorganization. In Europe, for example, the €1 billion Dutch A15 PEP highway project, where Hochtief Consortium is preferred bidder, got the go-ahead from local authorities. In the UK, Hochtief was awarded a multi-million euro PEP contract to design, build, finance, and operate a new student village for Staffordshire University, as well as 12-year transport infrastructure maintenance contract in Scotland, worth at least €190 million. In the U.S., a Turner joint venture is leading the $2.6 billion transformation at the San Francisco International Airport. Turner also maintains a leading position in sports stadiums and during the third quarter celebrated the opening of the $2 billion Intuit Dome with its joint venture partner and the Los Angeles Clippers. In defense, CP was awarded a $370 million Australian Air Force-based project in Queensland with works including the upgrade, rebuild of infrastructure facilities. Elsewhere, Abertis won an international tender in Chile for the expansion of the strategic transport link Santiago-Los Filos with a 30-year concession period. And now, let me take a moment to outline our performance at the segment level. In terms of order growth and indeed other metrics, Turner had a standout performance. On revenue growth of 19% to 19.3 billion euros, operational ability was 37% higher at 570 million euros and well above the top end of the guidance we had provided of 510 million euros. This outstanding rise in profits was partly a consequence of the 40 basis points margin increase at the PwT level to 3% during Vitorno's successful strategy of focusing on advanced technology projects, in particular data centers. And I would highlight that the net profit contribution of 414 million euros, a 41% increase year-on-year, represented 50% of Octave's group operational net profits. Turner's strategy is delivering very strong growth in new orders, resulting in a 30% increase in the company's backlog to a record €32 billion. That's a €7.3 billion jump during 2024. As a consequence, we anticipate Turner will continue its strong growth momentum through and by, firstly, its strong position in advanced tech, including the rapidly expanding data center market boosted by Doran in Europe. Secondly, further margin progression of the share of advanced tech projects steadily increases and aided by sources blue supply chain services offering. And thirdly, the structural long-term growth in several of its key markets, such as healthcare, education, airports, and sports stadiums. The growth strategy at Turner is delivering strong growth. Our guidance of €660 to €750 million operational PVT for Turner in 2025 points to an increase of between 16% and 32%. Moving on to CIMIC, I would highlight the solid underlying revenue with a strong growth in strategic market segments, particularly across the data center, social infrastructure, and energy transition markets. Our integrated solutions company delivered operational PVT of 450 million euros, up 6% on a comparable basis, towards the top end of the guidance range of 460 million euros. Operational impact was up by 8% at €263 million, with nominal impact of €410 million, including the net one-off gain of €147 million related to the decision position. CIMIC ended the year with a robust order backlog of €24 billion, up 3% year-on-year, effects adjusted. We expect further growth in the business in 2025 with an operational PBT guidance for CIMIC of 480 to 510 million. At our engineering and construction segment, sales increased by 10% year-on-year to 3.6 billion euros. Operational PBT showed a 7% increase to 88 million euros in line with the guidance range for the year with stable margins. The ANC order backlog of 11.6 billion euros was up a further 4% year-on-year after an exceptional 2023, when the order book jumped by 20%. 2024 new orders were solid at 4.4 billion, around one times the work done. Our ENC guidance range for operational PVT in 2025 of 85 to 95 million implies a strong growth of up to 24% on a comparable basis. Looking at Abertis, the toll road company continues to deliver on its growth strategy of investing in assets to extend its portfolio duration. Operating revenues rose 10% to over 6 billion euros and EBITDA also 10% higher at 4.3 billion euros. Operational net profit per PPA was around 800 million euros, a 4% increase with a nominal net profit figure incorporating the impact of the early termination of the Texas toll road. The operational result of 81 million euros was in line with expectations. As a consequence of the solid cash flow performance, we expect Abertis to distribute a total dividend of 600 million euros in the second quarter of 2025 in line with the previous year. And we anticipate that Vertis will deliver a similar operational result in 2025 to the 81 million euros of 2024. I would like now to provide you with an update on our strategy in the context of an infrastructure sector, which is undergoing an unprecedented and multi-year transformation driven by digitalization, demographics, decarbonization, and deglobalization. Octiv has positioned itself as a leading advanced tech infrastructure and services solutions provider to meet the strongly rising demand, not just from a construction perspective, but also as an equity investor and operator. This is consistent with our role group objective to deliver an attractive level of shareholder remuneration and create long-term value by first, generating cashback profits whilst maintaining a low-risk profile. Second, further expanding our presence in strategy growth markets. And thirdly, by accelerating our equity investment in greenfield infrastructure projects accompanied by selective M&A. The efficient allocation of capital plays a key role in the strategic development of our company in terms of transformational M&A, both on acquisitions, the deployment of equity capital for next-generation infrastructure and PPP investments. During the year, Octif has executed several important M&A transactions which support our strategic growth ambitions and further consolidate our strong competitive positions in specific market segments. Torna announced the 400 million euros acquisition of Dorna Engineering, which was closed in January 25. This rapidly growing advanced tech engineering business headquartered in Ireland had an order book of 1.6 billion at the end of last year. The Dorna acquisition is a major milestone which will enable the group to accelerate its European expansion strategy, where it has currently identified potential project pipeline of over 20 billion euros. In July, HOCTIF and Dragados agreed to integrate their North American civil engineering businesses to create the second largest player in the region. The combined resources will support further growth in a rapidly expanding North American civil works market. This value accretive transaction, which was closed in January 25, results in HOCTIF holding a 38.2% equity consolidated stake in the new business. During the second quarter of 2024, another important step in our group's strategy was taken when CIMIC announced it had entered into an agreement to acquire an additional 10% equity interest in this. The acquisition for a purchase price of 195 million euros increased the group's ownership of the natural resources companies to 60%. And at the beginning of the year, the shareholders of Abertis contributed €1.3 billion in equity to support the company's growth strategy, with Hochtief subscribing its €260 million share for its 20% stake. Let me give you more color on our leading position in the data center market, where strong growth is expected to be sustained for several years driven by the rapid expansion of cloud computing and artificial intelligence. We have evolved HoCTIF's strategic position in the sector over several years. Beginning with the smaller facilities, we have developed our experience and capabilities in North America to enable us to deliver data center projects for the leading global hyperscalers, such as the Louisiana project I mentioned earlier. In addition, we have started to deploy equity. Looking forward, overall data center capacity predicted to show double-digit growth through to 2030, and hyperscaler capacity is expected to double in the same timeframe. So demand from these clients will likely grow faster than the world market. Octiv is leveraging its global data infrastructure capabilities to identify and harness this fatigue levers that enable data centers to be deployed at pace. At the same time, we're leveraging this know-how, our geographic footprint, our strong client relationships to enable us to address the strong demand growth in the Asia-Pacific region and Europe. In Asia-Pacific, we have been awarded several projects during 2024, worth in total 1.3 billion, including data center contracts in Malaysia, India, Melbourne, and we're delivering our competing work in Hong Kong, Indonesia, Macau, and the Philippines. In Europe, Turner is assessing an addressable pipeline of advanced tech projects worth over 20 billion euros, mainly in data centers, which complements this fatigue acquisition of Turner and lays the foundation for the company's expansion in the European market. And in North America, Turner continues to grow its leading position with its data center order backlog having almost doubled year-on-year to around 7 billion U.S. dollars. And I would highlight that this figure includes only a negligible contribution from the Louisiana project we announced in December. As a result, Octave overall data center order backlog at the end of 24 stood at around 8 billion euros. Over 13% of the group total, more than double the level of 22, and is set to grow significantly in the future, with additional momentum coming from the donor acquisition. Furthermore, we are now investing substantial amounts of equity in selected data center projects, thus providing HoCTIF an additional opportunity to create significant value in this sector going forward. In Australia, we're leveraging the group's capability and leadership position. And in 2024, we acquired a site to develop a data center with 200 megawatts capacity. And in Germany, we're expanding the framework agreement with our partner to 15 sustainable edge data centers. The first one will become operational this summer. At the same time, further potential expansions in Europe are under discussion. The strategic shift from building to also owning and operating data centers is consistent with the Group's strong track record in PEPs. Overall, at the end of 2024, we had committed equity investments of €800 million, of which about €400 million are in strategic growth markets, including data centers, renewables, battery energy storage systems, electric vehicles, charging networks, and critical metals. Looking further forward, HOCTIF is leveraging its project delivery track record, engineering experience, and market presence to position itself for additional potential growth opportunities which are emerging globally. Specifically, we've been developing our technical and engineering know-how in sectors which are critical for the global energy transition including lithium, EV charging, and clean energies, as well as in the other areas such as semiconductors. These optionalities enable HoCTIV to potentially benefit from additional significant longer-term growth opportunities. We continue to focus on creating sustainable value for all stakeholders, and HoCTIV remains focused on ESG. In accordance with the Sustainability Plan 2025, HoCTIV aims to be net zero by 2045, and accordingly, we have defined additional near-term reduction targets through 2030. Shareholder remuneration remains a priority for the group. As a consequence of Hochtief's strong profit increase during 2024, and taking into account the solid growth momentum, the proposed dividend for 2024 is 5.23 euros per share. This represents an outstanding 19% increase year-on-year, compared with 4.4 euros per share dividend for 2023, and is equivalent to a 65% payout on the operational net profit for the year. So let me wrap up. Octaves 2024 results show an excellent performance with a 13% increase in operational net profit, exceeding guidance, and backed by strong cash conversion. A record year end order book of almost 68 billion euros shows a comparable 13% rise in the last 12 months, with particularly significant increases in areas including data centers and healthcare projects, setting up the group for another strong year. And we're also delivering on the strategic shift towards investing equity in our growth markets and thus expanding our opportunities to create value in markets where we have leading positions. Octave's growth trajectory is a consequence of consistent effort and resources applied in a consistent direction, and they're pinned by our increasing adoption and development of digital and AI tools. We're harnessing our existing experience and capabilities across the group's activities and geographies, incorporating additional specialized engineering and systems know-how, and leveraging our competitive strengths. And we confidently look forward to sustained growth in the coming years. Our positive momentum is set to continue in 2025, where we expect to achieve an operational net profit of between 680 to 730 million euros, which represents an increase of up to 17% compared with last year. Thanks everyone for listening and happy now to take questions.

And the first question comes from Graham Hunt from Jefferies. Please go ahead.

Thank you very much for the questions. I've got three if that's okay. First one is just on a balance sheet and your appetite for investments. Should we expect all kind of inorganic investment to go into developing new concession type assets like data centers or Or could you do further bolt-on M&A like Dornan to add in capabilities where you need them? Do you still need or do you still see capacity there? That's question one. Question two, is there any more color you can give us on source blue financials within Turner? How much of that business is external now? And anything on profitability would be helpful. And then again on Turner, just wanted to come back on longer-term guidance. Apologies if I missed this, but are we still, is the guidance for 2026 still the same, still intact there on Turner margins? Thank you.

Thank you.

So let me start with the balance sheet. Well, first of all, let me recap on a little bit on our firepower where we are right now. So in 2024, our net operating cash flow has been 1.5 billion, and this was before the 331 million dividend payout to Hoptics shareholders. So now, where do we want to use that firepower? Certainly, For assets, whether that's traditional PPs or data centers or other opportunities, as a result of our diversification into new growth markets. So for sure, we're going to find opportunities across those sectors. And certainly data centers is an important one for us. At this stage, we haven't identified any additional Bolton acquisitions, but we're not rejecting it. I mean, if there's opportunities that will allow us to expand our capabilities, we'll certainly take them, right? So that's another one that we will be pursuing. But at this stage, there's nothing that comes to our mind yet. On the second point of SourceBlue, the 2025 revenues of SourceBlue came up to 1.27 billion US dollars, which is like a 56% year-on-year improvement. And the PVT margin is close to around 8%. And there's like 1.8 billion backlog going into 2025. And that's putting aside the financials is very strategic because it's allowing us to get into the logistics business that is helping us, our clients, and reinforcing our value proposition, especially in a lot of the growth areas. And when it comes to Turner 2025, in our capital markets, they were expected by 2026 Turner to reach a 3.5% PVT margin. And we are comfortable that we are in the right path, if not faster than what we thought.

Thanks very much.

Thanks. And the next question comes from Luis Prieto from Kepler Schifrö. Please go ahead.

Thanks a lot. Good afternoon. Thanks a lot for taking our questions. I have three, if I could. The first one is, what do you think are the implications for Turner of potentially disruptive technologies such as DeepSeq? How does that impact pipelines and therefore your business? The second question is, if you could please navigate us through the differences between the data center equity investment approach at Hockteeth and then at ACS Iridium levels. Are they any different? Are they just geographically different, but same in essence? And the third one is if you could please shed light on the moving parts of working capital performance. And I was particularly interested in factoring dynamic. Thank you.

Thank you, Luis.

So let me start with... with DeepSeq and the potential implications. So let me go one step back first. So recently, and by recently I mean over the last few days, the US hyperscalers have announced plans to spend over 320 billion US dollars in 2025. So this is strongly up from 2024 that they spent 246 billion. And this is double the level of 2023. Pablo Padilla- A with the stargate announcements a that that's adding even even additional long term momentum right. On their side, Europe seems to be accelerating its own investment because they are planning to develop its own AI infrastructure. And also European Union is launching its Invest AI initiative, mobilizing 200 billion euros. And the UK Prime Minister is also setting out a blueprint to turbocharge AI. So certainly, there's a lot of demand growth and very positive. Now, then DeepSeq, what can we say about DeepSeq? Well, it certainly seems to be introducing efficiencies and everyone is right now looking into DeepSeq. But any new player, and this is from our perspective as digital infrastructure providers, any new player reinforces the importance of scalable and adaptable infrastructures. which is the kind of approach that we are pursuing. So we believe that the rapid pace of innovation in AI means that new models will continue to evolve and improve, which means that there will be an increase in demand for AI infrastructure. And that's our view, and that's what we're seeing so far, and that's consistent with the current announcements of the big hyperscalers and the new players. Now let's talk about our data center strategy and the differences between HoCTIV and ACS. So what we have initiated two different strategies that will converge. One at the level of HoCTIV, which is the edge data center strategy. And basically what we're doing with this strategy is to launch and deploy edge data centers from two megawatts to nine megawatts in urban environments to make sure that we reduce latency. And this is for AI processing and for clients that wants to have their own cloud services specifically for themselves, right? In closed networks. As part of this strategy, we are not only delivering the infrastructure and owning infrastructure, but we are providing cloud services, cybersecurity services, and potentially AI applications. So we're growing a big ecosystem around these ones. And if everything goes in the right direction, we're going to deploy a lot of them throughout Europe, the U.S., and potentially Australia. When it comes, and I'm not here to speak about ACS, but when it comes to ACS, they decided to build larger data centers to own land, to build larger data centers, and to develop them for big hyperscalers with a lease, right? Potentially some collocation, but mainly leases to hyperscalers. So this is the way we started. What's going to happen is that both are going to converge, right? And Hochtief will develop, because they have already identified land in the places where Hochtief is present, like in Germany, like in Europe, et cetera, and have identified, or the one in Simic that I mentioned, for example, that has already been awarded. And Hoqtiv is also going to use part of the ACS ecosystem to deploy the H1s. So we are growing significantly. And as I said last year, at some point, most likely second half of this year, we will provide a special capital market stay on this topic. because I think that it's relevant and it's growing significantly inside our group. And then on the working capital performance, let me start talking about the working capital inflow of this year. We had 300 million. Last year, there was an outflow of 40 million. And when it comes to factoring, there has been a 270 million factoring this year, and that's basically for two reasons. One is the increase in revenues, and second, the consolidation of this. So, that's including the factoring that was coming from this.

Juan, it's Luis again, sorry. Just to clarify, regarding the two strategies, so what they're doing in urban environments with smaller data centers, are they buying land and developing from scratch? What's the difference between that and what ACS will be doing in terms of buying land more aggressively and then the lease, et cetera, et cetera?

No, no, no. From that point of view, both parties are the same. We acquire the land. We change the use of the land. We invest in the energy in the land, fiber optic. We make sure that we get all the permits and through all, including environmental and governmental. And once we have everything ready to build, we... we make sure that, hey, we get a lease or a collocation, et cetera, et cetera. The difference is not in the approach to the land or owning the land. The difference is more the type of data center. So, so far, ACS was focusing on the big ones for AI training purposes, mainly, or data center storage, while Hochti was focusing on AI processing, right? But again, both is where these are going to converge.

Okay. And also the size is different, but that will eventually converge. And the geographies, you suggested that they're pretty much the same on either side. It's Europe, it's the US. Yes. And I assume Hokkaido also in Asia. Yes. Okay. Thank you.

And the next question comes from Dario Maglione from BNP Paribas. Please go ahead. Good afternoon, Juan.

Congratulations for the good results. I have four questions. So the first one is on Turner. The guidance for 2025 operating PVT up between, I think, 16 and 32% year-on-year. It's a big, big range. What will we need to see to hit the top end of the guidance? Is it more revenue growth or margin growth? Question number two, you mentioned that OTIF will also be a developer and owner of data centers like ACS. Can you maybe elaborate on the risks of these kind of projects and how the company will manage them? Third question, whether you can share with us the current ownership of ACS in Hortif Shares, so whether ACS has been buying shares in Q4. And the last question on Abertis and specifically the French concession in SANEF, whether there are discussions with the government on what happened next. once the concession expires in 2031. Thank you.

Thank you, Dario. So let me start with Turner. For the guidance 2025, I mean, two things. It's growth on one hand and increasing margins on the other. So both, and we're quite confident that they will continue this path. And by the way, Dornan also has an influence on that, obviously. Second, risks around the ownership. The big thing about, and this is why, in my opinion, there's a little bit of barriers of entry in the data center space. Because in our case, it's quite natural for us, because of our a geographical presence, and because of our services, and because of the work we do, it's quite natural for us to take the land, develop land, put the energy, go through the permits and environment. And we do that in conjunction with other work we do in the surroundings of our land plots, right? At the end of the day, we have presence in 47 states of the U.S., in all the countries in Europe, in all the countries of Asia Pacific, from India to Hong Kong, in Australia, New Zealand, et cetera, in South America. And we do have huge presence, very granular, and with a lot of intensive labor. So it's quite organic. It's quite natural for us. I mean, probably for other countries, a company, they would require a level of investment that in our case is not there. It's just part of our day-to-day business. The second thing is, unless there's a point in which you need to start developing the land, and you can only develop the land if you understand the requirements of what's coming in energy and what's coming on the future design and engineering of the data center. So unless you know, because you're doing those projects for the big platforms and for the big hyperscalers, it's quite difficult to take the risk because hyperscalers only start conversations when you're very, very close to begin the construction and delivery of the data center itself. If you go to a hyperscaler to say that you are thinking of a land plot, they won't talk to you. They will talk to you if you are 12 months away from being in operations or 18 months the latest, depending on the size. And this is something very difficult for anyone that is not in the industry, And it's not building as we have six gigawatts in the last three years, which is significant with the latest technology. What happens? So that's an entry, a barrier of entry. Now, what happens? What's the risk? More specific into your question. What's the risk? That we acquire land that typically is very inexpensive and we have spent some time developing and at the end of the day, we do not find a suitable tenant. That's all. But we're not talking about big risk. What we're not going to do is to spend the hundreds of millions or the billions in investing without making sure that we do have an a tenant, and we do have a big business plan that is bankable, right? That's a part that we don't get. And then the next question was ACS-Incoactive. I think that the last figure we published was a 77.4 in the last nine months. Adjusting for treasury shares, that was 80%. I do not have any other figure with me. right now. And then with SANEF, we are not having any specific discussion with government authorities. We can only speculate that the base case will be that they will recover the concessions and repeat them with the same or different structure, but that's the only thing we can speculate at this stage, and it's just a possibility. Okay, thank you very much.

Then the next question comes from Marcin Wojtyla from Bank of America. Please go ahead.

Yes, good afternoon. Thank you for taking my questions. The first one, could you update us on the pipeline for Abertis? What type of projects they are monitoring at the moment? It has gone a bit more quiet when it comes to Abertis M&A recently. And could you just confirm that Hochtief has the balance sheet capacity and the willingness to support Abertis if required? Question number two, could you say whether Hochtief has any appetite for to potentially get involved in potential projects related to reconstruction of Ukraine, should the conflict come to an end. And also related to that, could you just remind us, could you remind us what is your involvement in defense sector projects in the US, in Australia, and also in Europe? And maybe my last question, could we get an update on the merger of Tyrone and of Dragados? Do you see these synergies of 30 to 40 million US dollars already realized in 2025? And also, how much net cash is in Flatiron right now? So therefore, how much cash will you deconsolidate when you complete the merger? Thank you.

Okay, so let me start with the pipeline liberties. We are looking at opportunities. We were not able to disclose them at the moment, but we're looking at opportunities and hopefully we will be able to materialize them soon. And allow me to give an update probably in the next quarter about this. And second, the willingness to support authorities, yes, is there absolutely, as long as the opportunities are good, as long as obviously they get the right returns. And I do think that there's some momentum on that, potentially. And I hope that 2025 becomes an important year for authorities. And three, the reconstruction of Ukraine, we've been following that for some time right now. Obviously, there's a change in what's going on in Ukraine that we need to analyze and we are looking at carefully because of the implications. But in principle, if everything is normal, and of course, if everything ends up in the right way, we are keen on getting involved. We're very active, as you know, in defense. We are... In Australia, I think that our latest backlog in OC dollars was about the 8 billion in defense, from army bases to training facilities to the fuel management and logistics for the army, but also in the US where we've been quite active in the past and we remain active with the US Corps of Engineers and the army. We won, I think that one of the first investments, the army base in Poland, and we're looking at the Eastern countries as well. We believe that there is a lot of investments and we are confident that in Germany there is a lot of investment coming as well. So we are very, we're going to be very active in that space. Sergio Alvarez- A veteran drug others 32 to 40 million we continue targeting that as a first phase. Sergio Alvarez- A probably I would say that that will come more into entry six will see second half, I mean some of that coming, we will see portland 25 but i'm not. Sergio Alvarez- able to quantify how much of that will see this year right because we want to make sure that we do it in the right way we without generating a lot of disruption. And the net cash of Flatiron, it was like 387 million net cash of Flatiron, but the factoring was 325 million. So both things are deconsolidated from Hoctis.

Thank you very much.

And the next question comes from Marcus Cole from UBS. Please go ahead.

Hi, thanks for taking my questions. I've got three as well. The first one is just on factoring strategies. You mentioned it a few times. I just wondered how you think this will develop as the business grows. In terms of working capital headwinds from transitioning to collaborative contracts, that seems to be largely done. Is that the case? I think CIMIC was the one that was causing you the most in terms of headwinds over the last couple of years. And the last one is just on Dawn, and you've given us the sales and the EBITDA. I just wondered if you could give us the PBT contribution in 24.

Thanks.

Okay, so in terms of factoring, I mean, we have already used over the years our factor imbalance and our intention is just to keep it to a quite limited commercial base. So there's no strategy besides the day-to-day working capital advantage. So yes, it follows to some extent the sales as long as that's reasonable, but we do not have a specific strategy. On the working capital, this has been a good year overall, but in the case of CIMIC, as you rightly mentioned, it goes the other way as we finish a lot of the projects pre-2018, right? 2018 was the time that we said no more in CMIC when it came to EPCs and big lump sum projects that came a little bit later for the rest of the group at HoCTIV probably in 2022. And obviously as you unwind those there's some unwinding of cash. In the case of HoCTIV that Turner was already in collaborative 100% of the projects and target prices and cost classes. So there's, I mean, we haven't seen the unwind. In the case of Octif, because of the nature of the projects, those projects have already been finalized, so we haven't seen it. But in the case of Simic, there were big, big projects that are still unwinding. So that's why in 2024, we saw that hit in the working capital. And when it comes to Dornan, give me just one second, let me look at the figures.

Okay, here it is.

So, well, first of all, in Dornan, we haven't had any contribution in 2024 from Dornan because we closed in January 2025 the transaction. But the numbers of Dornan in 2024, it was a sales $791 million with $68 million EBITDA, which was an 8.6% EBITDA margin. Operational PVT of 66 million. Operational PVT margin of 8.4%.

And that's it.

Okay, thank you very much. All of this in US dollars, by the way. This is US dollars, okay, because these are the numbers analyzed by Turner.

Okay, so as a reminder, anyone who wishes to ask a question may press star and 1 at this time.

so it seems okay we got one more question coming from nicholas mora from wong stanley please go ahead yes good afternoon gentlemen just a couple uh to finish um one on just one on simic uh the guidance points to for 25 points quite a lot of growth um but the base in 24 was was inflated by the the one of gain from t so I'm a bit surprised by the quantum of the step-up. What are you seeing in the market there at CIMIC after a year where the margin has been a bit volatile and you still have a few projects to finish? But are we on the right track both in terms of revenues and margin and including ASIS in terms of sustainable growth from here? That's point number one. And number two on Turner, There was, I mean, stripping out the data center orders in Q4, which continue to be very good. The underlying, so non-data center orders are slowing down a little bit. Is it just normal seasonality, fewer large projects? Or what are you seeing, let's say, in the non-DC, non-race business in the U.S. right now? And final point, if I may. Just on Turner again and the data center ramp up, why would you expect in terms of revenue contribution in 2025? You've got some big projects in the pipeline. Will that come in multi-stage packages or should we see another big step up in revenue contribution into 2025?

Thank you.

Okay, Nicolas, thank you. So starting with the CMIC, just to make sure that we're looking at the same numbers, okay? In 2024, the operational PVT was 450 million euros or 738 million Aussie dollars. And we're expecting for 2025, 480 to 510 million euros or 800 to 850 Aussie dollars, which is an increase of 7% to 13%. So it's quite reasonable, the increase, right? But for some reason, you were saying that it was quite unusual. Did I get the question correctly?

Yeah, so, yeah, I mean, for me, it's in the seven, so the 450 did include some, some one of contribution, but apparently not, so, okay, so.

No, that doesn't, that's operational, that doesn't include the contribution from this, the capital. Okay, but the growth. So, where do we see the growth? Where do we see the growth, which is your next question? Okay. In 2024, and to some extent in 2023, there's three things that have been affecting CIMIC. The first one is slowing down of civil work projects. The second one is that all the energy projects, transmission lines, fiber, plants, renewables, all of that, that it was going to start in 23 has been slowing down, but we expect that to start ramping up in 25. We did not see any of that in 2024, right? So that's the second one. And the third one is there has been in the last years, from boost fires to flooding, issues with new mines around nickel or lithium that started very strong but at some point slowed down, and all of that has been affecting this. So that's basically what happened in 2023-2024, and hopefully we're going to start 25 things moving in a better direction. So that will be driving the growth. Turner, on the non-data center, so let me go a little bit on Turner. So first of all, let me say that in data centers, a lot of the, Luciana Project, for example, is not in the numbers. And let me remind that because of the nature of Turner, every time they win a job, that doesn't go directly into the working hand because it's collaborative. It's a process to start working on the design that takes time. And once the design is finished, the contract is negotiated. So there's no, I mean, there's a lot of potential backlog that is coming in Turner that is not in the books. On the other hand, you cannot just look at one quarter and try to come up with a pattern because it's lumpy. I mean, it's not a perfect mathematical equation, right? The way that backlog comes. But Turner has a lot of backlog that is not reflected because of what I just explained. And obviously, it's going to come. And that affects data centers, but affects other markets. Now, let me go one by one on the main sectors that are part of Turner order book. Data centers, which in the new order's grew in 2024, the ones in the order book without including the last ones, right? But in 2024, the new orders in data centers grew 137% just in data centers, right? And the order book, so this is the new orders, the order book grew by 87% on data centers. But when it comes to the healthcare market, the new orders grew 63%. to 4.9 billion, and the order book grew 30%. But in aviation, the new orders grew 111%, and the order book by 11%. In hotels and commercial, new orders grew 195%. and the order book to 92%. It's true that we're just talking 2.2 billion, the order book in this case. Entertainment, new orders 54%, order book 52%, etc. So we are seeing a huge growth across all sectors. Where are we seeing a slowdown? Battery market, where the backlog decreased 57%. So the order backlog is around 850%. We're not concerned because that will grow in the future. It's just that a lot of those projects have been stopped because there's a lot of uncertainty about the future of the technology. So investments have been stopped. And that's why we've seen that backlog decreasing 57%. We've seen a flat... order backlog in biopharma, but still strong overall. I mean, we have seen the new orders increase by 46%. Even the order backlog remained flat. We believe that semiconductors will grow in 2025, or we expect that at least, et cetera, right? We can give you as much detail as you need. So please follow up. if you think you need further information. And the data center ramp-up contribution, I wouldn't know what's the... I don't have, I mean, we can follow up because I don't know exactly the revenues that will contribute data centers in 2025. I don't have that with me. I have the other backlog that we have given in the presentation. I don't know exactly how much it's going to contribute, but certainly there's going to be an important ramp up. I mean, we already had strong revenues in 2024 and 2023, and that will continue increasing significantly.

So, ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Hurti for any closing remarks.

Okay, so just to say thank you so much to everyone. As always, we are at your availability to answer any further question. But so far, thank you so much for your time today.