Solaria Energía y Medio Ambiente

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?