Solaria Energia Y Mdo Amb

Good afternoon, everyone, and welcome to Solaria 2025 full-year results webcast. My name is David Guingamp, the head of IR of Solaria. I am joined today by Arturo Diaz Tejero Larrañaga, our chief executive officer. During this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. during this presentation we'll begin with an overview of the result and the main development during the project given by our ceo arturo following this we'll move quickly to the q a session i will also like to highlight that you have to submit all your questions via the web so thank you very much again i will now end over the world to arturo thank you a bit and thank you to everyone joining this conference call and we start as always i will

move fast around the presentation and we will pass to the Q&A session. But first point, in order to give guidelines about the 2025 annual report of Solaria, we were completely focused on delivery. If you remember in our CMD, we explained to the market that we are going to move our generation company to an infrastructure platform and that we will be extremely focused on data center services, that we will expand our activities out of Spain to other countries like Italy, Portugal, Germany, United Kingdom, and that we will entry aggressively in batteries business. Today we are showing in our presentation that we are accomplishing with our business plan, with all that we have explained during the CMD in November in London, and that we are completely focused on delivery. First, results, from results point of view. Obviously, we have accomplished with our guideline. If you remember, our guideline was 250 million euros of EBITDA, and we have achieved 266. It's a great result, a great financial result. and better than our initial guideline that we gave to the market more than one year ago. And we continue with our installation rhythm. As we promised, we have achieved three gigawatts of installation constructed. We have finished Garonia. during February and we have connected all the other assets during the last quarter of Q4. And today Solaria is a global platform with three gigawatts constructed and connected to a grid. And probably we are the largest platforms from solar perspective in Europe. At the same time, we explained during our presentation in November that we will be extremely focused on batteries. Today we can announce that we have a battery functioning, battery completely installed and connected to a grid. And hopefully during the next month, during the next quarter especially, we are going to add massively volume of batteries that will give to us enormous flexibility. You know that today battery businesses are really promising business that requires especially to move the first and to move fast. And we are going to do. We will be probably the first global platform in Europe with batteries functioning. Massive volume of battery functioning and obviously it's a great advantage with the actual situation of prices in Spain and globally in Europe, but especially in Spain. We talk a lot about data center. We talk a lot during November presentation about our contract with Merlin Properties, our first deal in data center world. And as you remember, we signed a deal based on the supply of infrastructure of grid connection point for a data center and electrical infrastructure. And we add at the same time a PPA, a solar PPA for 15 years. It's great to announce today that we have signed again other deal with Merlin Properties with three different parts. First is we supply electrical infrastructure and connection point, 213 megawatts, that will be used by Merlin Properties. we signed the first hybrid PPA with a data center player, probably in Europe and sure in Spain, 426 megawatts of solar PP additionally. And this is extremely important because you know that price of electricity today are shaking all the time. And with this, signature with these two deals, with these two PPA that we have signed, we give long-term and high level of visibility to our cash flow. Two different PPA deals. One solar PPA, 426 megawatts, 40 years of lifetime of the PPA. This is extremely important. Extremely high level of visibility of our cash flows for the next 40 years, no? This is extremely important. At the same time, second deal, PPA, hybrid PPA that we will use batteries of 600 megawatts hour, no? Ten years of lifetime, no? And I think that we are giving long-term visibility to the market about our future generation business, no? If we want, we could enter in details, no? Capacity installed today, more than 3 gigawatts. It's a great successful because, as I have explained, we are probably the largest platform in Europe for solar. And remember that we are going to add additionally wind and more batteries during the next years. It's like probably we will be the global platform, leader platform in renewables in Europe, no, from solar wind perspective. And our growth during 2025 was impressive. After several years with strong delays, I think that only in one year we have constructed more than 1.5 gigawatts. Of course, we had delays in the past, but today we are announcing an enormous growth and an enormous success of our construction division. 2026, we will continue with our construction reading. We, as you know, we have additional assets that we have today under construction. And in the short term, during this year, we are going to add more than one gigawatt of additional solar capacity with PPAs, linked directly with long-term PPAs. It's like we are going to construct new assets, but always new. with high level of visibility of our future cash flows with strong PPAs. Of course, numbers and production, we have increased all the numbers during 2025, net sales, profits, net profits, EBITDA, impressive growth. Cash flow, even with all the enormous investments that we have done during 2025, not only in solar, invest, without project finance sometimes, we maintain the same level of cash, even we have increased. And at the same time, we maintain really good ratio debt. Remember that all of our debt, practically not all, but 90% is project finance structure. and long-term debt with fixed interest rate. Three pillars of value creation, and we explained deeply during the November CMD, but technology diversification, wind, solar, batteries, and diversification of customers, you know, oil and utilities companies following traditional PPAs and now new customers like Merlin with data center PPAs. And we add, and this is extremely important, batteries. That is something that is going to change completely the game, especially during 2026 and 2027, because I think that we see enormous changes to get money and to get cash associated with the instability in price of electricity in Spain. And as I have explained, we have the batteries, we have the capacity, we will construct and we are going to add these batteries during the first half of this year and we will use during 2026, 2027. Country diversification, we continue our expansion especially in Italy. I think that we will give really good news in the next quarter associated with our expansion in Italy. You know that Italy today from price point of view is one of the best markets in Europe. And we are betting strongly for this country. And I think that Solaria probably will be one of the leading platforms in Italy in the next years, no? And Portugal, you know that we have strong developments in Portugal and we continue. Hopefully, during this first half, we will announce a PPA associated with our global assets in Portugal. And we will start with the construction. And of course, PPA sign, first hybrid PPA sign. Now, this is extremely important because You know that today batteries is something that is in the market. All the people is talking about batteries, batteries, and global investment that will go to batteries business will be enormous the next years. But nobody has signed serious PPA based on batteries. This is the first serious PPA deal probably in Europe based on batteries. And 10 years, 600 milliwatts hour. We will receive project finance associated with this PPA and shortly we will announce a global deal of project finance associated with both PPAs and this is extremely important for Solaya. We are executing, we are installing batteries and at the same time probably we will be the first that will announce project finance associated with batteries. Of course, today the volume that we have under negotiation is enormous, not only based on data center, based on batteries business at the same time. We have a lot of players that are negotiating today with us data center locations, PPA deals, and batteries or hybrid PPA deals based on batteries, utilities, technology companies, from the United States, from Europe. It's incredible the attraction that we are raising around this business, data center and batteries. I think in the short term, we will talk a lot about this and this is an estimation. We are talking about probably one gigawatt hour that we could sign, but you will see the delivery in the next month. PPA, we are probably the European champion in PPA, you know, because globally we have an enormous amount of PPA signed with the tier one players globally. All the tier one players signed PPA deals with us today. More than 2.5 gigawatts under PPA concept. And I'm going to say that the average price of all of our PPAs is around 50 euros per megawatt hour. That is, in our view, really good. The price, conditions, lifetime of our PPA and quality of our customers. We are extremely proud about the quality of our customers. And they trust a lot in Solaria. They repeat contracts. They want to work more with us. And we are extremely satisfied about this. We are extremely proud about this. The second data center agreement. This is extremely important for us because... Our growth in this division is impressive. In only a few months, we have changed completely the face of the company. We started to talk about data center a long time ago. Let me say a long time is one year. one year ago, and in only one year we have demonstrated that we are able to raise connection points, that we are able to construct infrastructure for third parties, and at the same time we are able to sign really good contracts and to supply services to our customers. Really satisfied with our collaboration with Merlin Properties, that is a tier one company in data center business, and we will be with them and we will support them And I think that we are really proud about this global deal. In order to give details, it's 230 megawatts of supply of grid access and infrastructure and power. And the two PPA deals that I have explained. And really good collaboration with this customer that hopefully will continue in the future with additional deals. Of course, we have signed two deals and what could happen in the future. I can say that the future is great and we are negotiating today several large deals with final customers, with some technology companies and hopefully in the short term we could announce a third deal. Our view about this kind of customers is that they are enormous players that are executing massive investments, especially in Spain. As you know, an important part of our platform is based in Spain. They are going to execute massive investments and they need all kind of services. What does it mean? Our intention is to supply services to these guys and to make with them new business units that could give mutual profits, that could extend our collaboration. And hopefully, as I have explained, we will announce shortly a third deal, other deal with other customer, final customer. And hopefully... we could give visibility to new business units associated with data center business world and artificial intelligence players and others. Our intention is to transform Solaria in a global infrastructure platform. Of course, estimations, we have estimated probably 0.7 billion of revenues will come from DC services. Honestly, it's a conservative estimation in my view. But the important point is an important percentage of this number is fully covered with the actual contracts. New contracts will give more visibility. I think that this is an estimation. Quarterly, our intention is to improve this number. Of course, it's crazy the cash flow that is going to generate this business globally, no? And the PPA is other part of this business. At the end of the day, these guys, this final customer is going to use enormous amount of electricity. They will need enormous amount of electricity and obviously Solaria is a supplier of electricity, no? It's the perfect combination. cheap price for them, because as you know, the self-consumption concept that we explained in November in other presentations, it's extremely useful for them, because they are going to save a lot of money with this concept, probably close to 30% of the total bill, and at the same time, we obtain important advantage for this concept, and of course, 40 years, standard contract with data center will be 40 years, and And it's going to generate enormous visibility of our cash flow in the long term. 40 years, I think it's long term. Capital light road. And I think that we explained during the November investor day, we are focusing partnership and growing with partners in different activities, real estate activity with an area that hopefully during this year will give Good news. GravyX, that is the European best platform with StoneShield, that will enter strongly in the market during 2026 with strong growth, growth, growth, growth. We are extremely excited with this new partnership because we think that is the correct moment to enter aggressively in the best business, especially in Italy and Spain, but globally in Europe. And this platform is a great vehicle for entering in this business as soon as possible, fast, and with a strong flexibility. And the new one, Solaria Data Center. And it's not a secret that we are negotiating with several players that want to enter in our global data center platform. And we have received several proposals, strong interest from the market. We are studying. We are studying different options with some of the players, global agreements and asset agreements. And I think, as I have explained, in the short term, in the next quarter, Solaria DC is going to give great news to our shareholders. We continue with the asset rotation that we explained in November. We have received several proposals with really good price because We have high visibility of our long-term cash flows and will be executed during 2026. European expansion, I don't want to expand more. Germany, Italy, Portugal, focus especially in Italy from profits point of view. I think that is a great country. Extremely difficult to entry, but the good point is that we have done. And we have a really good pipeline. It's timing for the explosion of Italy. And we will be extremely focused on Italy. Germany is a long-term market. It's extremely serious, and we will be there. And Portugal, I have explained in other conference calls, we have good volume of MWATs. Our target is to sign a global PPA deal with a player and to start with the construction of our volume of MWATs. Of course, we are changing our business model. We will arrange for during this year a new investor day and with strong surprises, I think, new business units and news that will change even again the face of Solaria. But we are moving our strategy from a renewable energy platform that is good, extremely efficient from CAPEX perspective and OPEX, to a strategic energy infrastructure player and global infrastructure player that could supply several services at the same time to final customers, right? Extremely important in this new time of the company, we are trying to give a strong long-term visibility to our cash flows. And I can say that it's an innovation, the PPA for 40 years, because we want to give stability and long-term view to all of our cash flows. We have the capacity, we have the pipeline, we have growth, we have the capacity and it's timing for delivery. Highest visibility on 2026, I think that in the first few results you will see that we are not worried about, obviously we are worried, but I think that we have strong visibility of our EBITDA target for 2026. And in the first few results you will see that probably our intention during this year is to show, I'm not sure it's the correct word, but to show correctly the EBITDA target for 2026. It's important to mention at the same time, it's something that we explained in June. We have the approval of our board for the acquisition of the 10% of shares of the company. You know that we announced on June of 2025. We have executed an important part during 2025. Today our position is close to 4%, probably will be announced in the next days. And our intention is to achieve 10% of the shares during 2026. It's like we have to acquire an important amount of shares during the next month. Of course, if you want, I think it's interesting to go to the Q&A session.

So thank you, Arturo. I will now open for Q&A session. And once again, thank you for your time. So the first question comes from Fernando Garcia from RBC. First question for Fernando is that is the 7 billion of euros of cash inflow in DC the same than 665 millions of DC services revenue in 26 and 2030. Yes. Are all these revenue already secured? Can we provide some detail? And did we receive any amount already from Merlin from the first deal? And last question from Fernando is, given the power price falling on CO2 prices, what is the future strategy of Solarvia for the existing operating portfolio?

David has answered the first question. Yes. Secure, I can say approximately 50% is secure. And details, no, I'm not going to give too much details. I'm sorry. Probably in the Investor Day we will give global details of our data center business with all the business units, but not today as you know, you know the reasons. And CO2 prices and the situation, today we have a lot of PPAs that is not going to expire in the short term. Short term, the PPI, the first PPI that should expire is in six, seven years or something like this, not in the short term. And batteries, as I have explained, we are installing and connecting batteries today, next month, and during the first half and second half of this year. We have acquired a massive amount of batteries. And during 2026, probably, we will be extremely focused on the installation and connection of batteries. More even than in the development and construction of photovoltaic solar assets or wind assets. In our view, battery business depends on timing. If you enter in the battery business in two years or three years, it depends. We will see the evolution of prices. In the short term, I'm completely sure it's a great, great business. Short term is 2026, 2027. And short term is critical and Solaya will be there.

Next question coming from Flora from CaixaBank. Can we explain how we will register the DC unit in our accounts? How does the 40 years PPA work? is fixed for 15 years and then we have to renegotiate and can we make also some comment on the progress on our negotiation on DC platform and asset rotation?

DC business is infra business for us. DC unit business is infra business for us. How does the 40 years PPA work? It's a standard solar PPA. It's fixed for 15 years, yes. You are going to renegotiate, not exactly, but I'm not going to give more details. But it's something standard, not renegotiation process. Negotiations to our partner indices, I have explained. Today we have received several proposals of companies, technology companies and groups that wants to enter in the Solaria platform. we are studying and working with them and seeing options and different options. They want to entry like some of them like financial investor, others like financial and final customer investor and we are talking with all of them. Asset rotation, we have several proposals and we are working with them and we are working on due diligence process.

Next question coming from Manuel Palomo from BNP Paribas. Can we please clarify the split of the sales figure? in our number, energy cells and infrasales. Manuel is in the slide five. I think we split no cells. Cells is 197 millions of euros, of which 123 is energy, and infrastructure services is 74. The rest of the income are coming from other income and from René Diabille. Next question is coming from Fernando Garcia. Can we please provide some detail about the capacity at the end of the year and today?

2.4 was the capacity connected to the grid at the end of December 2025, and we are at Garonia during the second month of this year, February. And we finish and we finish all the process during February, January, February.

Next question coming from Gonzalo Sanchez Bordona from UBS. First one is, are the 42 millions infra revenue from 2025 a good base to estimate revenue going forward? I will answer. We already give some number in the CMD. And as we mentioned, we have a huge visibility on next year infra revenue and in 2025, we received 74 millions. 2024, 42 millions. And in 2025, 74 millions of euros and growing for the coming years. And next question is, can you please, can we please clarify if the PPA with Merlin announced is part of the deal announced with the CMD or new one? Can we give some data regarding the 213 megawatt data center and any price indication for this PPE?

It's a new one. Even it's in a completely different location because you know that the first one was for Burgos, north of Spain, and this one is for Madrid. It's a new one in a completely different location and large deal. Indication of PPA price, no. I have, as you know, confidential agreement with our customer and we prefer to keep confidential all the numbers. And as I have explained, they are going to save a lot of money for the self-consumption concept. And we will share with them a part of this profit. But the number is confidential.

From Gonzalo, we also have a question regarding the hybrid. The BES PPA, if we can give some indication regarding the price of the 600 megawatt hour of BES.

I think that you want to talk with my customer and they could give. In our case, we prefer to keep confidential the information of our customers. I have talked about, I have given a number, the global average price of our PPAs is 50.

Next question are coming from Daniel Rodriguez from Festival and Manuel Palmo from BNP. More or less the same question. Total capacity is up by more than 40% while output is down 4%. How we can explain this situation?

Obviously, it's associated with curtailments. I think that curtailment affect globally all the business, not only solar, all the solar business, no? Good point and I think it's a great opportunity at the same time this containment in the secondary market because you are going to obtain better prices in the secondary market and with the adjustment of the market, you know the meaning of this word. And at the same time it's a great opportunity for batteries during 2026, 2027 as I have explained, no?

um next question are coming from a few analysts regarding if we can elaborate some impact of generalia transaction in in 2025 and if we can also give some terms in a megawatt in millions of euros per megawatt for the dc connection solution what is the valuation of what we are So the first is finally we have registered genera at 96 millions of euros versus 125 millions of euros. We have been very conservative regarding this genera transaction. So genera impact is less than expected in this 2025 results. And the second question regarding the DC valuation. Unfortunately, as far as today, we cannot give you a lot of detail regarding this valuation per megawatt. But I'm sure that as far as we send with more customers, with new customers, we're more than pleased to give you some assumption of prices. In any case, in the presentation, you have some assumption of prices per megawatt. Next question is from Arthur Sidbon from Morgan Stanley. When do we expect the first cash contribution from the two grid connection Merlin deals?

My view, as soon as possible. Because we are going to work together with the customer in the construction, in all the different steps. of the process and as soon as possible. But as I have explained, I think that Merlin could give more details. And in our view, our intention is to move fast and to try to start globally with all the deals as soon as possible.

Next question is coming from Alessandro Di Vito from Mediobanca. Can we provide our view on the ongoing discussion in Europe to lower power prices? Second question is what is the merchant exposure of solar today? And last question is when should we expect a business plan update?

The price of electricity depends on the country. And, you know, in Italy it's extremely high. in Spain is extremely low and depends of the hour of the day and the country in Europe. It's completely different the situation per country and per hour of day. And I think that today in Europe we are the discussions, different countries, different situation. It's not easy to establish a framework agreement or a law for the same low for all the countries, no? I know that Italy is trying to solve the extremely dangerous situation of power prices, no? But for example, in Spain, it's not the same situation, no? In my view, with renewables, you will see a reduction on price of electricity. Renewables are going to reduce the price of electricity. Spain is a really good example, no? merchant exposure in solaria of course as you know we always have say to the market 70 30 was our perfect mix but it depends of our data center division because if we continue with successful and we sign more deals we will extend our percentage with fixed price for the long term with ppas because If we sign additional data center deals, they consume enormous volume of our electricity, you know, and obviously something that will affect our merchant part.

Next question is coming from Tammy Suleiman from Barclays. Thank you for the presentation. Please, can you clarify the 40 years PPA? Would you be reinvested in a new solar asset? after the initial 30 years useful life.

It's not our intention. Forty years sounds a lot for us, but for solar technology, it's not significant. I know that probably if you are not an expert, sounds a lot, 40 years. But I can promise to you that 40 years in solar is not significant from efficiency, functioning, operating, For example, I could give to you an example. The asset rotation that we are executing is based on assets connected to the grid on 2007. Today, people, insurance company and all the people are working on it and they are giving offers to us based on the next 30 years with assets with 20 years of experience. It's like 50 years of lifetime and we are not changing equipment. We are not removing. We are, obviously, we invest capex and we invest in the operating capex, but not significant.

Next question is coming from Jorge Alonso from Bernstein. Can we explain how the EBITDA is accounting on DC power land once the deal is reached? Second question is will solar put BES to cover the energy of the megawatt deployed in 2025 to cover 30, 40%? And final question is when the new PPA will start?

Of course, every day is accounted with a schedule with our customers and typically they are responsible of the construction of the data center and we are responsible of the line that will connect with the data center. Obviously, our responsibility finish with the line that connect with the data center, typically. If we are able to construct this line, the contract will be fully executed. But it depends on the contract. And BES, as I have explained, we typically have around 30 to 35% of merchant. Obviously, BES is based on merchant because PPA... we can use with our solar PPAs best, but for the merchant part we cover with batteries. PPA, some of the PPAs are functioning now and others are going to enter in 2027, 2028, 2029. And hopefully new deals that we are going to announce will be for 2027 especially, but Our philosophy is to sign PPAs based on short-term, because we usually don't sign PPA deals based on price in the future. We have visibility of price of electricity in the short-term, and we usually sign PPA with high level of visibility of our construction, of our installation, and for the medium short-term. Medium short-term is one, two years.

We'll maybe take only the last question from Alvaro Solano from Alantra. Can we please provide the valuation range for this e-connection solution or at least have a sensitivity reference if Madrid location is more expensive than other location or than the first deal sign location?

I don't think so. I think that depends on volume, no? If you have enormous volume in an area and with good connection and with good conditions, the price could be better than Madrid location. It depends on volume and conditions of the area. Obviously Madrid is great, Barcelona is great, Milan is great, but probably it's more difficult to find 500 MW altogether in the same connection point in Madrid or in Barcelona. And obviously the price of land and other issues. The good point, we have all. We have connection points in Madrid. We have connection points out of Madrid. We have connection points in Milan. We have connection points in all the places. We are working now on the land issue. And I think that we have global proposals to our customers. And they are showing interest in different locations, not only in Madrid, globally. And valuation range, it changed a lot. And I think that you have a lot of numbers and data. And In order to finish, thank you very much. As we have explained, I think that during 2026, in the medium term, we are going to arrange an investor day. And we will talk about new business units linked with data center business and infrastructure business. And I think that it will be exciting. It's an exciting time and a growth time for Solaria. We are going to develop our platform, European platform, based on the infrastructure and digital services. And we are betting strongly for the AI business and with global customers focused on it. And it's an exciting time for Solaria, exciting times for Solaria. Thank you very much for being part of this conference call and our investor relations team will be available for all additional information that you will require. Thank you and have a great afternoon.