Good morning, everyone, and welcome to Cox H1 2025 results presentation. My name is Meritxell Pérez , Director of Investor Relations. This session will be led by our President, Enrique Riquelme , followed by our CEO, Nacho Moreno , and our CFO, José Olivé. After the presentation, we will open the floor for Q&A. With that, I'll hand over to our President, Enrique Riquelme , who will walk us through the main highlights for the first half of the year. Thank you.
Thank you, Meritxell. Good morning, everyone, and thank you for joining us today. Let me start by focusing on H1 2025 results. Today, I am delighted to share with you the key highlights of the first half of the year, which reflect that Cox is delivering. Our delivery is fully aligned with our strategic plan and our commitments with the investor community. This delivery has resulted in strong growth during the first six months of the year. Let me highlight the five key drivers behind these results. Firstly, building up a high-quality backlog with healthy margins continues to be the main driver of our service company. We have reached a record high service backlog of almost EUR 3 billion as of June 2025, and most important, with a contracting margin of 10%.
Second, Cox 's growth has come and will come through the management and ownership of more water and energy infrastructure assets. Today, we have five water and 16 energy infrastructure assets under management, including 11 new concessions in Panama, Ecuador, and Colombia. We also have three transmission line concessions. The near future ahead of us looks bright as we are in the latest stages of developing projects for up to 4 million cu m per day. Third, all of this has been achieved with financial strength and investment-grade rating. I would like to highlight the successful private placement with Allianz , by which they become partners of Cox . Fourth, this first half's results have been even more interesting when you take into consideration that our business is seasonal by nature.
With this in mind, we expect the second half of the year to perform even better, supported by the strong backlog and the healthy pipeline. Fifth, and last but not least, I want to highlight our share price performance. We have not only recovered our IPO share price but also increased it, which we interpret as a clear sign of the market's confidence in our growth strategy and execution capabilities. I will now hand it over to Nacho Moreno , who will take you through the results in detail. Nacho, please, over to you.
Thank you very much, Enrique, and good morning to everyone, and thank you very much for attending the H1 2025 results presentation. As anticipated by my Chairman, the first six months of the year have been quite outstanding. Since we have outperformed every single metric that we published back in 2024, we've delivered upon every commitment that we acquired when IPO-ed the company, and we're clearly on track to meet our guidance expressed back in March when we released the 2024 full-year numbers. Let's go now into the detail. If you look, if you move to slide five, you will see that during the first half of 2025, we've outperformed in every single metric what we achieved back in the first half of 2024.
From a revenue perspective, we've been able to hit or to closely hit the EUR 500 million number, which is 60%+ above what we were able to achieve back in the first half of 2024, and clearly gets us on track to meet the EUR 1.2 billion target that we declared back in March when we released the full-year results for 2024. On EBITDA terms, we've been able to achieve EUR 82 million in EBITDA, which is well above and compares extremely positively with the EUR 50 million achieved back in the first half of 2024. More importantly, at least to me, cash flow conversion. We've been able to still keep a 46% cash flow conversion, which only talks positively about the cash conversion ratio of the company and talks positively about the operational excellency that we're looking for when operating the company.
Our backlog keeps on growing and keeps on growing at a very healthy margin. Back in the first half of 2024, we achieved EUR 1.3 billion. At the end of the first half of 2025, we've been able to achieve EUR 2.7 billion, which is quite close to the commitment that we acquired to the market back in March of achieving for full-year 2025 the EUR 3 billion number. All of this within the scope of a very contained and very healthy balance sheet. You've always heard me committing to a very healthy balance sheet and financial net debt to EBITDA well underneath the 1x . What we've been able to achieve outstanding results was maintaining the financial discipline and was keeping the financial net debt to EBITDA underneath the 1x , as my CFO will further explore later on in the presentation.
You will see in the following pages the basis upon which we've been able to manage all of this. Just to give you an idea, and we can turn the page, we've been extremely focused on delivering new assets and concessions. You will see that whether it's water or energy, we've been able to grow our infrastructure business, our asset core business. From a water perspective, I think the extension of Agadir, the expansion of Agadir, which is 125,000 cu m plus the power plant that will supply the entire 400,000 cu m plant, only validates our energy follows water business model. It's an achievement which is worth mentioning on a standalone basis. Alongside that, we've been able to agree, achieve, find fantastic agreements and contracts, not only in Panama but also in Ecuador, as well as in Colombia. More importantly, the future is quite bright ahead of us.
If you turn into page eight, you will see that whether it's Latin or whether it's Africa and the Middle East, opportunities that lie ahead of us are quite astonishing and quite concrete. On the other hand, we are in the latest stages of agreements of finalizing WPA agreements both in Angola and Togo, and we are on a pre-qualification phase. We're pre-qualified in Egypt, all of which add on to almost 500,000 cu m per day. Moreover, we're targeting more than 2 million cu m per day only in the region of Africa and the Middle East. Latin will become a fantastic player, a key player as well in our water effort, and we're right now in advanced process or in advanced bidding processes for more than 1.8 million cu m per day.
From an operational perspective, as I started with saying, we've been able to improve every single metric vis-à-vis in the first half of 2024. Whether you pick revenues, EBITDA, cash conversion, net profit, we've outperformed all of those ratios. From a revenue perspective, we're up 62% to almost EUR 500 million. From an EBITDA perspective, it's 63%. This number is quite important because it talks quite highly about the operational excellency achieved, not that much in our asset core, which is quite predictable and recurrent, and therefore, it does not attract that merit to be excellent in operating it, but more importantly, in our service core business, where we have achieved, as José , my CFO, will enter into later on, a fantastic double-digit EBITDA number, which talks only positively about how well we have operated that part of the business. Our net profit has almost doubled.
It's up from EUR 7 million to EUR 13 million, 71% up. Our backlog has only increased from EUR 1.3 billion to EUR 2.7 billion, pretty much on track to achieve, to meet the EUR 3 billion target, and all of that with a very healthy margin. Our financial net debt to EBITDA ratio is quite contained, well underneath the 1x , as my CFO will explain later on. However, even though we have achieved excellent numbers during this first half of the year, we're strong believers there is yet more to come. As such, we have been working for quite some time on an efficiency program, which should help us to unlock the full portfolio. That efficiency program is a three-year program which is targeted to deliver around EUR 45 million-EUR 50 million savings, which should translate into EUR 45 million-EUR 50 million improvements across revenue, operational excellence, organizational alignment, and simplification.
That, as I said, is a three-year program, should bring around EUR 45 million-EUR 50 million in EBITDA terms, and it should translate anywhere to EUR 200 million- EUR 250 million at 4x, 5x, 6x EBITDA multiple. Last but not least, I would like to highlight the financial health and strength under which the company operates. I would like to highlight some achievements that we've been able to deliver over the past six months, which I think are deemed to mention. First one, the delivery of a five-year transaction alongside Allianz, EUR 115 million, that only validates our business strategy and business model. Counting on a partner of the quality and capabilities of Allianz only talks positively about the business model, and we can only be thankful to them for trusting us and for becoming a long-term partner.
We've been able to keep our investment-grade rating, and that has also enabled us to deliver medium-term facilities with Spanish banks, Santander, CaixaBank, and ICO, which clearly is an achievement for the company, but more importantly, with CAF, which is a key player in most of the regions where we operate, and again, validates our business plan and our business model as well as our business strategy. Last but not least, we're well covered from a commercial paper perspective through our program, our Spanish local domestic program, which I have to say is performing extremely well, and every single one of the issues is well oversubscribed. Now, with no further delay, I would hand it over to my CFO, José Olivé. Thank you very much.
Thank you, Nacho, and good morning, everyone, and thank you for attending our call.
Nacho has already referred to some of these figures that I'm going to share with you, but I'd like to go through them in more detail with you. Starting with the revenues that we have produced during the first half of 2025, which stands at EUR 1,498 million versus the EUR 306 million that we had last year, which represents a very significant impact of 62%, mainly led by our service core business. This has translated into a very similar uptick on EBITDA of 63%, up to EUR 82 million versus the EUR 50 million that we had in H1 of 2024 last year, whilst maintaining the same EBITDA margin of 16%. As a result of this, our net profit stands at EUR 13 million versus the EUR 7 million that we had at this time last year.
Here, I would like to point out the impact that the FX has had on this, since last year we did enjoy, due to the appreciation of the FX dollar, an FX change that had an impact, a positive impact of EUR 6.7 million versus the - EUR 9 million that we've had this year due to the depreciation of the dollar. Meaning that on a net FX-free basis, the positive difference between the two stands at EUR 22 million. Our adjusted operating cash flow is at EUR 38 million, and we'll talk about that later. We have achieved all of this whilst maintaining a very healthy balance sheet position, with our financial net corporate debt versus adjusted EBITDA standing at - 0.7x , and our financial net debt versus EBITDA standing at 0.8x , whilst maintaining a very healthy short-term liquidity of EUR 229 million.
If we look at our net debt position in more detail, as I have mentioned already, you can see that we enjoy very healthy ratios, both on a net debt EBITDA, on a net corporate debt, and adjusted EBITDA basis, and also when excluding IFRS 16, our ratios improve slightly versus the ones of total net debt. Always maintaining the compromise of our net corporate debt versus adjusted EBITDA below one, which we currently have in negative. Analyzing our gross debt in more detail, you can see that our corporate debt has increased from EUR 40 million to EUR 93 million. As we have shared with you in the past, we believe that the negative ratios that we have of net corporate debt versus EBITDA, adjusted EBITDA, are not optimal, and we're in the process of taking them to more optimal levels whilst maintaining them below one.
Looking at our project finance debt, you can see there that the difference between last year at this time versus now, it has been reduced by EUR 11 million. This is mostly due to the fact that we have EUR 24 million in amortizations, whilst at the same time, we have increased EUR 14 million due to the CapEx that we have placed in Panama, in the projects in Panama. Finally, our capital structure and cash flow conversion. Cash flow conversion stands at 46%. Our EUR 82 million of EBITDA turns into EUR 38 million of operating cash flow. As you can see here, once again, reiterating the flexibility that our gross debt provides us with close to 70% of it coming from project finance and 31% coming from corporate debt, giving us ample room to continue with our growth strategy whilst maintaining a very healthy balance sheet.
If I now move on into the two verticals, and I start with the asset core. Here, you can see that we have slightly increased our revenue versus last year from EUR 99 million to EUR 113 million, and we have maintained the EBITDA margins very stable. EBITDA at EUR 52 million of last year, EUR 57 million this year. This is as a consequence of the slight pickup in the revenue side. This has room to continue progressing adequately because, as you can see in the next page, we've had a little bit of a decrease in the EBITDA generated by water. This is mostly due to seasonality reasons that will be compensated in the second half of this year. Our asset core revenues and EBITDA continue to be on a very healthy trajectory moving forward.
If we look at the service core, and as I have mentioned before, this is where we have seen the very significant pickup in revenues, mostly due to the very extensive and large backlog that we had at the end of last year that we are turning into revenues. We have moved from EUR 207 million to EUR 385 million. This has turned in return to generating EUR 25 million of EBITDA. As we continue growing in revenues in the service core, our EBITDA margin will continue to progress to a level where it should be, closer to the double-digit figure. Lastly, let me point out the significant progress that we are making on our backlog. As we mentioned, at the end of last year, we finalized the year at EUR 2.23 billion.
Just in the first half of this year, we have increased that backlog to close to EUR 2.7 billion, very much on track to what we predicted would be the end of the year, which will be above EUR 3 billion. We have done this maintaining a very healthy margin of 10%, which is similar to the margin that we have had at the end of last year and that we have had all along as we continue growing this backlog. With this, I'll pass it on to Enrique and Nacho for their closing remarks. Thank you very much.
Thank you very much, José. At the risk of sounding like a broken record, I can only reemphasize how strong we have outperformed the first half of 2024 and how well on track we are in order to deliver a fantastic, what would be a fantastic 2025.
If we go metric by metric or KPI by KPI, you would see in slide 25 that we've simply outperformed everything that we did last year, first half of last year. Whether it's revenues, asset core, or service core, EBITDA asset core, it's quite difficult to be up 9%, and we've managed to be up 9% on the asset core. Let me reemphasize, on the service core, beating what we did last year by more than EUR 27 million is absolutely amazing and astonishing. That altogether brings us to EUR 82 million of EBITDA we've taken into consideration, or which, taking into consideration the seasonality of our business, puts us well on track in order to deliver the +EUR 230 million EBITDA that we guided the market to back in March. Allow me to reemphasize the importance of betting a 46% adjusted cash flow conversion. Generating cash is key for this company.
Over the years, hopefully, we're now delivering or we're now well acknowledged for delivering a good track record on our cash flow conversion ratio. Gross debt is extremely contained, and José has been extremely detailed on, one, how do we build up that gross debt, that financial net debt to EBITDA position, and how careful we are when managing it. Last but not least, two key things. On one hand, the whole growth of the business of this company is predicated upon the growth of our asset core company. So far, during the first six months of this year, as well as during 2024, we've shown to the market that we're able to grow that asset core business, whether it's water assets, whether it's in energy generation, or in transmission assets.
We've kept on delivering new assets and new concessions during these first six months, and we will keep on doing so over the near future. The second pillar for the growth of this company is achieving the operational excellency on the service core division. The backlog is the start of all of that. Building up or being able to build up a healthy backlog number is key for our business, as it ensures good revenues, good EBITDA, and good cash flow conversion for the years to come. As of June 30, our backlog has stood up to EUR 2.7 billion, which is well above what we had back on June 30, 2024. Last but not least, allow me to reemphasize the importance of keeping on working in that operational excellency.
The efficiency program, the three-year efficiency program that I've discussed at the beginning of the presentation, is a key component of that. We will be improving our EBITDA by EUR 45 million-EUR 50 million, and that number depends solely upon us. It's a number that we will be delivering to the market. If you translate that into valuation, depending upon the multiple that you apply, that should translate into anywhere between EUR 200 million and EUR 300 million of valuation, which again, it's totally up to us to capture. We do not depend on the market. We do not depend on clients, nor on banks, only upon our willingness to achieve it. I can tell you that the company is fully dedicated and devoted towards achieving and succeeding in such efficiency plan. I'll hand it over to my Chairman right now for the closing remarks.
As we conclude our results presentation, I want to reinforce the strong operational performance and significant achievement of Cox during the first half of 2025. We have delivered consistent growth across our asset company and operational excellence across our service company division. We continue to be at the forefront of the concessional water and energy opportunities that are in the market. We are very proud of the partnership we have achieved through the private placement with Allianz Capital Partners of America. With this strong foundation and the catalyst now in motion, our upside potential is clear. We are just getting started, and the best is yet to come. Thank you very much.
Okay, perfect. We can move now to the Q&A session. Please, Nacho, go ahead.
Thank you, Meritxell, and thank you all for attending. Happy to answer the questions that you guys have put into the webcast. Oscar Najar from Banco Santander, first question. On the water asset core, why is the EBITDA decreasing? I think that's a seasonality reason. It's decreased. First of all, the decrease has been quite negligible. Second, it's a seasonality reason. Certainly not a performance issue on the back of that. Second question, Mexico, what's, if anything, true about the news that has come out in recent days? What we can tell about the Mexican situation is that different things. On one hand, it is part, it is well known in public information that it's part of Iberdrola's asset rotation program, the possibility of disposing of their company in Mexico, their business in Mexico.
It is also a fact that Mexico is one of our key strategic regions, and we've declared it like that since IPO. If you guys remember, it's North America, which is U.S., Mexico, then Chile, Brazil, Europe, North of Africa, and South Africa, and Middle East. Third fact, we know Mexico extremely well, given the history of the company, given the history of our Chairman. It's a regional regulation that is very well known to us. We are analyzing it amongst many other opportunities. We're also analyzing water desalination plants. We're also analyzing power plants in different regions in the world. None of those, none of the latter have come out to the press, and none of the latter were being requested about. When it comes to Mexico, yes, we're analyzing it as much as we are analyzing other opportunities. That's all that is right now on the desk.
It's an analysis as it's our duty. Is it financially viable? I think we would have to decide it whenever it comes to a more advanced part of the process. At that time, we would see how it would be financed. What's the strategic rationale for the company? I think the strategic rationale for the company, in addition to what I've just said, of it being a strategic or a strategic reason or region, sorry, I think it's all about water and power. I think Mexico has got quite an extensive water program, quite an extensive and interesting power market, and the combination of which is quite interesting for the company or would be quite interesting for the company. That would make the strategic rationale for us. Certainly, it would be in case it's, it would be somehow transformational for us, and definitely, you know, quite strategic.
So Fernando Lafuente from Alantra, pretty similar question. What's the rationale behind the decline in water margin? I think I have already answered that one. Seasonality of our EBITDA coming from the bioenergy plant in Brazil. That is a plant whose EBITDA and cash generation is totally biased towards Q3 and Q4 of the year. It's always been like that, and it's because of the sugar cane recollection. Outlook for the generation business in terms of revenue and EBITDA, I think we're quite positive about the generation business, about the revenue and EBITDA, both of them. The margins that we will be achieving in the second part of the year will be totally in line with the ones achieved in the first part of the year.
Cannot provide you with a number, but we're certainly positive on new plans, such as, for example, Khi Solar One, where we think we're going to be delivering a better margin than the one we initially accounted for or expected. We're quite positive on the margins and the revenue that we will be getting from that part of the business. Revenue expectations for service core in H2. Without it, I think we are on track to meet our guidance of EUR 1.2 billion. If you take into consideration that our asset core business should be generating around EUR 300 million or EUR 200 million, that gets our service core business anywhere between EUR 900 million and EUR 1 billion in terms of revenues. Service core has performed EUR 370 million, give or take, in this first half of the year. You make the math and you get to the second part of the year.
Why was the engineering margin lower in H1? I would say certainly lower than the one we would have liked, but quite healthy, first of all. Second, rationale for it being lower than the one that we would have liked is because we have not, you know, we did not achieve to get enough water projects into it. As soon as you get water projects, you know that water brings a much larger EBITDA margin. As water weights in, your margin starts going up. Hopefully, we will be able to deliver that in the second half of the year and in the years to come. Water opportunities. What have you been awarded? As I think I mentioned during the presentation, and certainly there is a slide on it, we are in WPA negotiations with regard to Angola and Togo. That's a 50+50 , 2x . It's 100 and 100.
We've been pre-qualified or shortlisted, depending upon which terminology you would like to use, in Egypt for the first one, which is a water desalination plant for the Suez Canal. That gives us, if we're finally the awarded contender, the right of first refusal over another three plants of 250,000 cu m each. In terms of awarded, you've got Angola 50+ 50. You've got Togo 50+ 50. We'll be finalizing WPAs, hopefully, in the months to come, certainly in H2. Egypt, we should be confirmed in H2, certainly. If we are to be confirmed in that one, that will bring 3x 250,000 cu m in the next 12 months, in addition to that. Last question from Fernando. In terms of efficiency plan, what's the expected cost of that efficiency plan?
As I said, the efficiency is a three-year program that should bring to the company anywhere between EUR 45 million, at least anywhere between EUR 45 million and EUR 50 million EBITDA, translating into multiple times that. Hopefully, if we're trading at the right multiple, which should be around 6x, 7x, that should position us in the EUR 300 million valuation. In terms of cost, the range that we're envisaging, bear in mind that program relies upon three things, not only upon a simplification of the organization, but also upon revenue opportunities, capturing revenue growth opportunities, as well as capturing efficiencies within the different processes. The amount of cost that we've got inputted into the project is in the EUR 20 million area. On a net basis, which is, I guess, the number Fernando was looking for, we should be making EUR 30 million of net EBITDA. Ella Walker, Mexico. Is it true?
I think I've already replied to that. We're complying with our duty to analyze it as every single M&A opportunity with the background that it is within one of our key strategic regions and one we know very well, as all the other strategic regions where we're present. Alexander, you are now planning to build energy assets in Ecuador with potential water plants associated, but not planned, within the framework of a broader investment plan. Similarly, you're considering acquiring EUR 4 billion of energy assets from Iberdrola in Mexico, where water scarcity is a growing concern. I would say more than considering, I would say analyzing the potential opportunity. Questions. Should we think now about a strategy of waterfall, waterfall energy? Undoubtedly. I think the strategy of the company remains the same and does not change at all.
Every single opportunity, every single M&A opportunity which we are analyzing, whether it's water desalination plants or power plants, or the Mexican business, falls within that strategy and ties up water and energy. How will you finance EUR 4 billion of acquisition in one go? Would you raise extra equity? I think as we advance, or if we were to advance in the analysis, we would find out how we would finance the final price. This question assumes that the final price would be EUR 4 billion and that we would acquire it. What I can tell you right now is that even though the share price has performed quite well in the last, sorry for that, in the last couple of months, and it's above the IPO price, from a management perspective or from, you know, I'm not very happy with the share price.
I don't think, I still don't think it reflects the value of the company at all. As such, if I had to recommend, I would not recommend raising equity. I would not recommend my shareholders, my Board of Directors, raising equity at these levels. That's for sure. What will be your strategy to squeeze out the 10% minorities left in Cox Energy? There is another window where those shareholders can adhere to the exchange in the month of September. Hopefully, we will get new shareholders or, yeah, new shareholders from Cox Energy to adhere then. At the time, we will decide. We built the optionality to decide whether we would go for a squeeze out or not. I think we want to give those shareholders the chance to adhere and then take a final decision. Jorge Guimarães from JB Capital. What's your expectation for working capital evolution?
Business will certainly not require any working capital in the second half of the year. That's for sure. What's the expected net debt position by year end? I don't think it should be different from today. Let me hand it off to José.
No, it shouldn't be different. That's right, Nacho. I just want to reiterate in that that we will adhere with a compromise of having our corporate debt below our corporate EBITDA. Expect the ratio to be always below one.
Status update on water concessions. Talked about Angola, talked about Togo, talked about Egypt. Those three are tangible. The first two are super tangible. Egypt is hopefully, fingers crossed, expecting good news there. On the back of that, there are some other tenders, which, you know, I don't think it's worth going through.
Just to give you an idea in terms of numbers, we're talking about circa 4 million cu m per day, in addition to the ones that I've just mentioned, 4 million cu m per day in Africa and close to 2 million cu m per day in Latin . We're making very good progress in our water business. In fact, if you think about it and you add up Morocco, Ghana, Chile, Angola, Togo, and, fingers crossed, Egypt, we would already be at the million, if not slightly above. Mexico, any comments regarding the press reports? As I said, one of the opportunities that we're analyzing amongst others. How does this align with the company's strategy to grow in water concessions, concession assets, and energy concession assets on the back of water, which was the foundation and the rationale for the IPO?
I think it would be spot on, you know, within our strategy. It's important, the fact that every single M&A acquisition transaction that we are envisaging falls within our strategy and within our strategic regions. We would only perform an M&A acquisition, whether it's a plant, whether it's a bolt-on, in one of those regions where we are incumbent. We would adhere to that and stick to that. I guess there are no further questions, in which case I would like to thank you all again for your time this morning and for following the company. You know, we obviously, through our IR people, through Meritxell , please reach out. Don't hesitate to reach out if you have any further questions, and we will duly answer those. Thank you very much.