Before starting, we would like to remind you that once we've finished with the presentation, we will open the Q&A session. You can leave your question in writing in the section in Zoom, or you can speak on the telephone or raise your hand on the platform. I'm going to give the floor to Roberto Tobillas, who's the General Director of Dominion, and Patricia Berjón.
Good afternoon, everybody, and thank you for your attendance for participating in this firm's earnings release. We published the results this morning before the AGM took place. We are closing a very good quarter. We have very good earnings. We have record figures, absolute record figures. Adjusted sales have grown 4%. In that growth, Forex contributes 0.8%, and inorganic impact is half of the two.
It's - 0.2%. In fact, divestitures in the period exceed new investments. Just to remind you, last year, we had divestitures of small businesses in the area of digital services within our strategy of leaving those businesses that have lower margins or cannot be improved in terms of efficiency. Our traditional operational leverage has made this growth of 4% in sales become a growth of 9% at the level of EBITDA, EBIT, and EBIT compared to the first quarter of 2021. In all cases, there's been an improvement in margins relative to sales between 30 and 50 basis points. In order to evaluate how our net profits have evolved, we should take into account that from now onwards, we have a minority shareholder in the renewables business. Before, it was a 100% Dominion business.
In order to establish this comparison at a constant perimeter relative to last year, in other words, to see how what organic evolution has been like, we have to consider the profit prior to the allocation of the results to this new minority shareholder. This first quarter of 2022, we've reached EUR 11.1 million that represent 4.2% relative sales, which is the biggest net profit over sales that we've ever reached and which is 23% higher than the figure reported for the previous year. If we were to review segments, all of them have grown as regards to sales. Now we're going to see how the dynamics that have affected the different segments have made them behave differently too.
As far as margins are concerned, the two segments, that is B2B, both services and projects, have a very good level of performance, both in terms of sales and margins. Both of them account for 90% of the contribution margin of our company and 83% of our sales. This is the main business or most of the activities are focused on B2B. Services have grown 5% in terms of sales in line with the growth that was forecast by our strategic plan, and there's been an improvement in margins of 20% relative to the figures recorded last year. In other words, we now have 11.6% relative to sales. This is the biggest contribution margin for a first quarter.
If you take a closer look, traditionally, Q1 of the year has contribution margins relative to sales lower than the rest of the year in this particular segment. We also have a very good progress in projects in LatAm and the renewal of contracts in the industrial sphere, as well as automation contracts at industrial plants, as well as environmental services. Now, we are now entering the ramp-up period of the recent contracts that were won in Germany and Spain related to telecommunication networks and electricity networks. You know that we are now operating in Germany, and as I said, we are ramping up the contract that was awarded to us by Endesa in the eastern part of the country. On the other hand, we have the executions.
Well, I hope that you're listening to me because it seems that we have a message here, somebody saying that you can't hear me clearly enough. Let's try to improve our connection. Well, anyway, I was now going to talk about what we've done in terms of projects, Projects 360 , that have advanced as scheduled in terms of industrial infrastructures and environmental solutions. We are also now covering the first steps, like for instance, the funding that is required to start work at the Viña del Mar Hospital in Chile in the second half of the year. We are also speeding up the new renewable projects, where we've already finished a new solar facility in the Dominican Republic.
In Spain, we've started three projects with a total of 455 MW. In any case, the segment has grown 9%, and the contribution margin has grown, and the margins are 17.5%, which is over and above what we expected, which was 15%. We also have a very healthy portfolio, which means that we have a portfolio at the end of this first quarter of about EUR 600 million. It hasn't been a good quarter, however, for consumption, mainly as a consequence of inflation and the high prices of energy, because as you know, these prices are still very high.
This is something you can basically see in the margins of the B2C segment that have dropped to 8% relative sales because of the additional efforts we have to carry out, and also because there are more defaults and because energy is more expensive. This has had a repercussion on our portfolio of energy customers that has dropped as we saw in the last part of the year. Then even so, sales in B2C are 4% above the figure reported the previous year, thanks to other verticals like the case of Rentik, our renting service for high-range mobile phones, where we have more than 1,000 newcomers every month, and which is a very important vertical to increase the lifetime value for the customer because it guarantees their permanence during longer periods of time.
Also thanks to the very good behavior of the vertical of telecommunications, which at the closure of March has 194,000 active services, which is more than 2.5x the number of services we had exactly one year ago. We've also recently launched a significant advertising and marketing campaign that we can see on the television, and that will be present throughout the entire year. We've also opened new alliances to expand our distribution channels, like the recent agreement signed with Foto Prix. You know that in this first quarter, we did not publish a balance sheet and there are very few remarks to be made. We are continuing as we had the situation last year where the generation of operational cash is covering the buyback of shares.
The second buyback program on March 31st reached 2.5% of our own shares, and now it's nearly 3%, and we've invested as of March 31st, a total of EUR 17.5 million of which EUR 8.2 million have to do with Q1 of 2022. Today, during our AGM, we've approved the payout of EUR 14 million in dividends that will be paid out in the month of July. As you can see, it's been a good quarter, although the context is not the most favorable of them all, with many uncertainties and many macro variables to be taken into account.
As I said, this morning, we held our AGM and both our chairman as well as our CEO were stressing, among other things, that we are a company that is ready to carry on generating value in complex and uncertain environments, that we're not a cyclical company, and we have demonstrated that in recent years with 2020 and 2021 far above the performance of other competitors. Both of them spoke about a culture of a way of doing things and of a management model, which is one of our differential signs as a company. This is why we have somewhat less than two years to carry out our strategic plan, and 2022 should just be a continuous progression towards the fulfillment of these objectives. Thank you very much for your attention, and now we're gonna move on to your questions.
I would like to remind you that on this particular occasion, you can use the chat, or you can call in via the telephone or use the app, the Zoom app. Thank you. Okay. Well, we're gonna start off with the Q&A session and we're gonna give the floor to the people that have raised their hand. We're gonna start off with Juan Benet from [GVC Gaesco] .
Hello. Good afternoon. Can you hear me clearly?
Yes, loud and clear, Juan.
Hello, good afternoon, and thank you very much. I want to focus on services, and these are two very specific questions that I want to make. In this inflation context that is so strong, you've managed to improve your margins in relation to 2021.
If this situation is maintained, do you think that customers might not be able to absorb all these cost increases that you're reporting? Point number one and point number two, do you think that you will be able to achieve a double-digit growth by the end of the year in the service division?
Well, because of all the context that surrounds us, and then that on the one hand, and then B2C, and, as regards, telecom and energy, the contribution margins that you presented in the quarter, while there are certain circumstantial impacts, but do you think that they could be improved to go back to the levels you had before? Or do you think that there's a new context, your margins are gonna be somewhat lower? That's all from me. Thank you very much.
Well, as far as the last question is concerned, Juan, let's say that these drops in B2C margins are somewhat lower than in previous quarters because of the circumstances. In any case, we don't know how long this is going to last. I suppose that everything will depend on how energy prices evolve, and it also depends on consumer dynamics. Yes, I also believe that it's something that is going to improve over the next few quarters because in this first quarter, as Patricia pointed out, we have high levels of inflation in which we have the impact of inflation, which is much more immediate. There's less traffic too, and what we're trying to do is achieve resilience and agility. We want to recover these margins. I think that this is gonna be an isolated quarter and we should start to improve.
This is what Patricia said before about a greater diversification and Foto Prix, etc . I think that this is going to help us generate more traffic in shops and more income that should produce improvements. Yes, well, we've already implemented actions and others that we will be taking, and some of them, for instance, are the powerful campaigns we're carrying out in the social media or in the media, and it's something that is gonna last the rest of the year. I'm sure that it will recover more traffic for shops, and this should also produce more sales, and it should also improve margins. We also have other actions that we will gradually implement. As regards to B2B, well, obviously, whatever has to do with services in Europe, we're focused on Europe and Latin America.
I think that we've absorbed the inflation effect, and it's not that we've really transferred inflation to our customers. We believe that this has to do with productivity and with knowledge, with processes. It has to do with digitization. The truth is that we do not have any concern as regards to the possibility of maintaining these margins. In terms of levels of growth, well, I wouldn't really dare say anything. Q1 has gone reasonably well, and here we are basically talking about recurrences, and we're talking about maintaining our activities. I think that it's far too early to give you figures to tell you if we're gonna reach double digit or only a single digit, whatever.
We want to achieve as much as we possibly can, but I think that it's still too early to give you this information, to give you the data.
Thank you very much.
Thank you, Juan, for the question. Okay. Miguel Toquero from JB Capital.
Hello, can you hear me?
Yes. Oh, hello. How are you?
Well, thank you very much for giving me the floor. Three questions from me, please. Well, the first one is not a question, it's a request, and could you please give us the net debt figure on the closing date of the quarter?
The second one is a follow-up of the question that was just asked by Juan, but perhaps this has to do with the contribution margin of projects, which was 17.5%, and it's dropped somewhat below the levels reported in previous quarters. Do you think that these levels are recurrent, and are they above this 15% figure that you've always mentioned? Then also related to this, and as regards what you mentioned, could you please say something a little bit more about how the rise in the price of raw materials and what we're seeing in the supply chain, how this is affecting you in the execution of these projects? Or do you have any clauses in place to perhaps transfer this increase to the prices of the contracts themselves?
Finally, as regards the convertible you have with VASS, I would like to know, could you give us more information, please, on the conversion deadlines for the loan, and if it's going to be executed, how much would your stake go up? I think you have 35% right now, if I'm not mistaken. Would you be reaching levels above 50%, and would you have to consolidate this activity? That's all from me. Thank you very much.
Okay, I'll try to answer, and then Patricia will give me a helping hand with this. With regards the net debt, which is the first question, we obviously have not given you any balanced figures, and I think that we are. It's the clue was given by Patricia.
What we say is that our operating cash flow in Q1 has more use of cash at organic levels, so that is we have healthy cash generation, and it's still fully in line with our generation objectives in terms of EBITDA. You were asking about projects B2B, which I think it was 17-point-something percent in margins. Well, the truth is that this is something that repeats year- after- year and quarter- after- quarter, and we are above 15%, far above. Here, I would like to say that this year we're gonna be above 15%. The strategic program at least has this 15% as a target.
Although there are projects, very specific projects that we have of the 360 world, things that we're doing with a number of stakeholders and renewables, renewable projects that I think that are going to allow us to maintain these margins above 15%. I can't really give you a more specific range. I'd say that they would be above 15%. The increase in prices of raw materials, do they affect us? Well, yes, of course. I'd say that we've had some problems in the Central European companies with steel. It's not the core business of Dominion, but in any case, it did affect us to a certain extent to one of the plants. Well, as regards the rest of these issues, these are margins that we have under control, that we have them in the portfolio, and procurement is covered.
There are some specific things in renewables. I don't know, the plaques that go on the top or the bottom. In the States now, we're talking about 82% of the panels are being sold. They come from China rather, and this perhaps produces too much supply and prices might go down. This is our day-to-day issue. I'd say that our projects are very healthy as regards visibility of margins, and perhaps they can be affected to a certain extent, but there's no big concern in relation to B2B. As regards the VASS convertible. Well, this is. These EUR 75 million have gone to VASS and with that leverage, it means that VASS has the necessary amount of equity to carry out the projects that generate this virtuous circle.
In other words, that we carry out these projects. It's a convertible, and it's also a participative loan at the same time. It's a participative loan that is based on the long-term approach that is in our fixed assets, and it's true that it does offer us the possibility of being executed. It's something that is on the table that could be in our roadmap. This morning we heard the CEO and the Chairman. What they were saying is that right now our investment, our main investment in view of the M&A difficulties we're seeing and the excessive prices of many of the things that are in the market have meant that we've decided to invest in our own shares.
Here there could be assets, as we said, that at given point in time with the conversion that would give us a majority. In other words, we would have an extensive majority above 75%. That's very clear. This would be included under the fiscal group and whatever. In any case, it's something we're analyzing, and we're looking into this issue of being able to having assets in which it's more of a professional segment, and we're looking into this in the midterm. There's no doubt that this would give us recurrence. I think that's the magic word that everybody's looking for in this environment of having lots of visibility and stability and lots of recurrence in flows. We are active, and we've always been active in M&A.
If we don't find relevant operations in the market, well, you can see that we're doing things with our own actions and we're working pretty quickly, and this obviously, this conversion could be on the table. We'll be studying this, and I'm sure that it's going to be discussed at future board meetings during the year. Patricia Berjón, would you like to say something? Or perhaps, Miguel , is it clear?
Yes. Yes. Very clear. Thank you very much.
Thank you, Miguel, for the question. Carlos Treviño from Santander, who now wants to take the floor.
Hello. Good afternoon, Robert and Patricia. Many thanks for accepting our questions, several from me. Firstly, I would like you to confirm, please, that as you pointed out in the previous call in February, do you think that in 2022 you'll be able to achieve the individual objectives you've established for the strategic plan? Because this is going to be a year with growth above 5% in organic and 20% in terms of net results. Now, the second question, I would like you to perhaps focus a little bit on the issue of inflation and what kind of increase have you contemplated as regards staff expenses for this year? And could you please say or tell us if you have any clauses with the customers that will allow you to transfer inflation and therefore increase contracts should inflation exceed a certain level?
The third question, well, it's several questions that are interrelated, that are, you know, connected to the B2C business, and the first one. Well, obviously, you've grown 4% year-on-year in B2C, but bearing in mind that you've included the customers that you already have, with a 4% growth, I have some doubts. Does that mean that the underlying growth of your real income has it been positive or not in the quarter? Could you give us some more clues on what kind of underlying growth you've had in the B2C business once you remove the customers' turnover and which gives us your income. You also pointed out in the earnings presentation, you talk about a lack of competitiveness in energy. Could you please let us know what's going to happen in the short term?
What is it you can do to solve that lack of competitiveness? Could you be a little bit more specific in this regard? With a somewhat midterm approach, if you want, because you've been talking about different initiatives. You've been talking about marketing and advertising and the partnership you announced the other day. For instance, last week, Telefónica announced a strategy through mi Movistar, which is going to be your direct competition in most of the services that you people are offering. I'm even talking about becoming involved in the field of energy. In view of the fact that you're gonna have to deal with powerful competitors like Telefónica competing directly with you, where is your competitive advantage to be able to compete in a positive manner against them?
Finally, to finish, and I'm sorry for speaking for so long, in B2C, you spoke about the marketing campaign that's going to continue throughout the year. Could you quantify it? How much is it gonna be, and how much are you gonna increase your costs compared to last year? Because perhaps this could have a relevant impact on the margin. Thank you very much, and I'm sorry for asking so many questions.
Well, Patricia and [Juan Carlos], you both have to give me a hand on this one, or we can both do this. Well, you were asking about guidelines. Well, with my gut feeling, with what I see and, considering the portfolio, I'd say that, well, nothing makes me think that we are not on the right path, that we are already thinking about 2023 as regards fulfilling this strategic plan with that, commitment of ours.
I would also add to what you've said is that we have a fourth guideline, which is not to have, indebtedness above 2x EBITDA. If we bring together these four criteria, as we mentioned in the presentation, well, nothing makes me think that we have not already done that. We feel confident, we are fully committed, and we have the ambition of getting things done. As regards to inflation, what you were asking about, Carlos , as regards to impact on wages .
There's a bargaining process in place for the collective agreement, and we'll see what happens. We don't really expect there to be significant increases that could have an impact on the margins. There's something else that I mentioned that as far as structures are concerned, we are in exactly the same position as last year when we have the central structure for the corporation in Spain. Well, as we see things and as we see these levels of inflation, I think that they are not here to stay. Obviously, this is going to be clear over the year, it's going to be reduced, and I'd say that as regards structures, it's still flat. As regards our workers in Spain, it's 11,000 people in the group.
Obviously, in other latitudes, we don't have or they don't have those levels of inflation. Here, I think that we've also managed to manage the cost issue properly. When people are saying that things are going up 8% or 9% because of the year-on-year inflation as of March, it doesn't mean that we have increased our staff expenses by 8% or 9%. Certainly not. What you were saying, Carlos, about clauses, about transferring the price, well, this is in all contracts. In all framework contracts, they recognize these effects, and it's something that can be found in your daily negotiations with the customer too. I'd say that nominally speaking, we don't really have any impairment and, as I said before, we are able to maintain that level. The guidelines.
Well, I finished the presentation by pointing out that 2021 is the year where we fulfilled our commitments, and the same applies to 2022. B2C. B2C, we've seen the effect of Q1 because, obviously what we spoke about, the lack of competitiveness in energy, we are aware of that. We've been aware of what's going on for the last three or four months, and we've thought about transforming EDP into a transition platform, and we've thought about our concessions with VASS that we could implement PPAs to sell green energy through B2C. What I mean to say by this is that I know that it sounds a little bit presumptuous, but well, competition is in the market, and that's the arena in which we feel comfortable, regardless of whether it's Telefónica or anybody else.
We have a strength that is the possibility of connecting to the market. It's important to have a competitive supply. We are offering energy with pool prices that are above EUR 200, and that's where you have a problem in relation to the incumbents. In any case, yes, of course, we are working to solve that problem because if these levels, these high levels are here to stay, well, you have to be flexible and agile as a company, and we're trying to find solutions for that. Obviously, I cannot make any disclosures here, but we are aware of the necessity to do so. When you know that you don't have a competitive supply, you have churn problems and catchment problems, this is what we're looking into and turning around in this quarter.
Well, having said that, when one grows 4% at a nominal level and when you have increases in the energy pool of double digits and very relevant. If you link that to the loss of customers that you've already seen in energy, yes, you can see that underlying factor of a real growth in what has to do with the sale of energy has gone down, and it has an effect. Let's say that this is the only but we have for Q1, and that would be a decrease in the B2C margins.
Once again, I think that there's an important message, says Patricia, which is what Robert said, is that we are aware. As Robert pointed out here, the key issue is to have a competitive offer and limiting risks, which is what we've done until now.
We are living in a context that didn't have to do with the previous prices, and we saw that we had a very competitive offer to make, and it also hedged our risks. What we're doing now is working actively to find other solutions and finding other innovative formulas that will allow us to deliver something that is competitive, but without taking on board any risks. We didn't want to become involved in a mess. We wanted to transfer competitiveness in the market to the end customer because the market has a very high pool levels. Obviously, what you have to do is look into other options and other movements and reach other agreements under this common denominator that is called risk control and financial discipline, etc .
We are all aware that we're gonna be suffering for a few months. We're gonna be suffering in our energy portfolio, but we have some very healthy portfolios like telecommunications or other projects that are already underway and are active like the renting of devices because that is going perfectly well. We have some very significant operations with something that's very important, too. That is customers, a very good lifetime value because a two-year renting contract that is going to be extended because that customer is going to buy another mobile, or they're gonna get another mobile, and that customer is going to stay with us for a long time, and that's part of what we want to build.
In terms of energy, we know what the situation is like, and we need to develop the necessary tools to change the situation and the rest of the verticals. The evaluation is very positive. Now to finish with the marketing campaign where that they said that the answer is Phone House, but I can't give you a quantitative answer, but it's gonna be qualitative for Carlos Treviño. This is not gonna have an impact on our results. How have we negotiated that campaign? Well, I think that we have to take into account all of B2C. That is the aid or the help that you receive from manufacturers and people that make their products available to sell, and that has a damping effect. This is not going to have a very big impact in terms of costs.
Thank you very much for the answers. Okay.
We have another question through the chat, but I think that it's already been answered, and that referred to the guidance for the year 2022. Okay. Well, we have no further questions. We will close the earnings release here. Thank you very much for attending. Goodbye. Thank you very much. Bye-bye, everybody. Bye. Good afternoon.