Welcome to the Dominion Results Presentation. If you want to follow this presentation in English, you can do so selecting the English language on the World icon at the bottom of the screen. [Foregin language] Antes de empezar, nos gustaría recordaros que una vez finalicemos la presentación, como siempre, comenzará el turno de preguntas y respuestas. Podéis dejarnos vuestras preguntas por escrito en el apartado de preguntas y respuestas de Zoom, o intervenir tanto por vía telefónica como levantando la mano en el menú inferior de Zoom. Comenzamos la presentación. Intervienen Roberto Tobillas, Director General, y Patricia Berjón, Directora de Desarrollo Corporativo.
[Foreign language] Hola, buenas tardes a todos y gracias por asistir a esta colla de resultados de este primer trimestre de 2025. Esta misma mañana hemos celebrado nuestra Junta General de Accionistas, donde nuestro CEO, Mikel Barandiarán, ha repasado la evolución del ejercicio 2024 en términos cuantitativos y cualitativos, así como un avance de lo que ha sido este primer trimestre de 2025, donde hemos comenzado con una nueva estructura organizativa y de reporting que explicaremos durante esta llamada. Además de la aprobación de los resultados del ejercicio 2024, durante la Junta se ha aprobado el reparto de EUR 15 million como dividendo, lo que equivale a EUR 0.10 por acción. Vamos a comentar los resultados de este primer trimestre, pero antes de comenzar, nos gustaría hacer mención al contexto en el que nos encontramos, donde la incertidumbre y los eventos geopolíticos han venido para quedarse, como solemos decir.
[Foreign language]
The last of these events has been the tariff war, initiated by the U.S. government, which has shaken global current affairs in recent months. In this regard, I want to emphasize again that Dominion has a diversified position in business geographies and that, specifically regarding tariffs, it does not affect us directly as a service provider, with a presence also in the United States, although it is clear that it could have some kind of indirect impact, both due to the consequences it may have on macro variables, on interest rates or currency movements, or the impact on some of our clients.
En cuanto a los números del primer trimestre que hemos compartido durante la Junta General de Accionistas, nos encontramos ante un trimestre especialmente activo, con varios nuevos contratos relevantes, los comentaremos más adelante, un repunte del crecimiento en términos orgánicos, por encima del guidance, y una mejora en la rentabilidad operativa. Al mismo tiempo, un fuerte avance en el proceso de simplificación que recoge nuestro plan estratégico 2023-2026.
Para realizar una correcta interpretación de la cuenta de resultados que vamos a ver ahora, hay que tener en cuenta que las desinversiones de actividades que hemos llevado a cabo durante los últimos meses han sido importantes, principalmente en la venta de los servicios de mantenimiento industrial SERVE, y debido a su impacto, tanto en facturación como en todas las líneas de margen, en la presentación de resultados que tenéis ya a vuestra disposición, hemos incluido una columna con la cuenta de pérdidas y ganancias del primer trimestre de 2024 proformada, en la que hemos eliminado las cifras correspondientes a las desinversiones realizadas. En grandes números, hablamos de.
[Foreign language]
Let's say that what we're saying is that this impact of these activities is about EUR 36 million in terms of turnover, EUR 1.8 million in EBITDA in the quarter, and EUR 1.2 million in net profits. This proformat figure has the same perimeter as the current figure that we are about to present here, with which we are comparing these results of the first quarter of 2025. Now, let's move on to talk about the figures of the quarter. The first thing is that organic growth at constant currency has been 7%, whilst the total growth of the company has been -7% as a result of these inorganic elements that I mentioned before, which have subtracted -13%. We have the effect of forex, which is negative at -0.7%.
Margins still grow, and operational profitability of the business is still improving, driven by two reasons. First, the approach that the company has regarding activities and business that are more profitable in relation to sustainable industrial transition. Secondly, the divestment in activities with low margins. The contribution margin now stands at 16%, whilst EBITDA reaches 13.6%, over and above the figure of 12.3% that we reported for the first quarter in the previous fiscal year. We are still gaining operational traction in terms of turnover as well as in profitability, and we are fulfilling our strategic plan.
It is also relevant to point out that during this quarter, we already felt a significant reduction of financial expenses associated with a reduction of interest rates, although this reduction is not applied to EBT profits because there is a negative compensation because of some exchange differences that have been very high, mainly brought about by the depreciation of the United States dollar. This reduction of financial expenses has had a positive effect as regards interrupted operations, which covers the financial expenses resulting from the Cerritos wind farm, and which have been reduced by more than EUR 1 million. This means that we have a profit in continuous operations of EUR 9.9 million and a net profit of EUR 9.9 million, which means that there has been growth of 22% and 49%, respectively, compared to the first proformat quarter of 2024.
In other words, we've had a very significant increase in our net results as a consequence of better operating results, and also because there's been a reduction in balance sheet expenses, both financial as well as taxes. By segments, and with these results in mind, we have a new breakdown whose objective is to continue with the simplification exercise and make much more visible the different trends, drivers, and strategies that we're going to be applying in each one of them. Therefore, we believe that we also have to use different assessment criteria that should simplify our comparison with other peers. This new reporting is divided into two major areas. We have, on the one hand, Global Dominion Environment, and on the other, Global Dominion Tech Energy that cover the three transitions that are encompassed by Dominion. GDE is focused on sustainable industrial transition.
It includes circular economy businesses. In other words, management of waste from the moment of collection until it is taken back into the production process, industrial cleansing, water treatment, and water management. On the other hand, we have decarbonization activities. What we're talking about here are energy efficiency solutions and reduction of emissions. It's important to say that both activities meet all environmental requirements as the main driver, and they also have a very extensive diversification in sectors, geographies, and clients. Global Dominion Environment accounts for 43% of the total level of turnover and 32% of the company's contribution margin. This quarter, the turnover will be EUR 140 million, and it's grown organically by 6% compared to the same period of the previous fiscal year, reaching a contribution margin of 11.6%. We expect that this will be increased through operational improvements and sanities.
This is going to combine organic growth with inorganic acquisitions that will extend and supplement the activity portfolio that Dominion already has. This growth is supported by our leadership in the sector and by the new contracts that are being awarded. In this regard, in Q1, we have some of the new contracts that we have received, like, for instance, a new contract for the cleansing of water recirculation pumps at a Greek refinery. This is a new customer and a new geography. We have the dredging, spinning, and drying of the sludge of a purification plant located in the north of Spain, which is a big area of opportunity.
Now moving on to Dominion Tech Energy that addresses the energy transition and the social digital transition, which includes solutions for connectivity, for technological integration, and the digitization of businesses, as well as all the services and projects for the electrification and generation of renewables. Within this segment, we will be reporting on services and on projects. On the one hand, we have GDT services that covers these activities of electrification, telecommunications, and logistic and commercial activities, and we'll be closing the first quarter with a business figure of EUR 150 million, which means that our turnover has grown by +12% compared to the same period of the previous year. The contribution margin stands at 17.6% of the sales, which is a high percentage that covers the high operational profitability of businesses such as logistics or commercial.
At an aggreg
ated level, GDC services accounts for 44% of the total sales and 48% of the company's contribution margin in this first quarter. In the same way that we have with GDE, as mentioned before, and the services under the GDT umbrella are highly recurrent, and they also have a very good dynamic because in the first three months of the year, we've signed new contracts. For instance, the maintenance of electric recharging infrastructures for the transport company of Barcelona. We also have electric operational services for medium and low voltage systems in Santiago de Chile for three years. As regards telecommunications, we are now going to build, operate, and maintenance the external network of the fiber system in the region of Valparaíso. We also have operations in Claro en Colombia, and we are going to be reaching out to the region of Medellín.
Finally, GDT projectos includes 360 vision projects, where we will also include things like hospitals, data centers, and renewables. This leaves or sets aside the industrial projects that are included under GDE. GDT closed the first quarter with a business figure of EUR 35.3 million, which represents a slump in invoicing or in turnover of 2% compared to the same period of the previous year, whilst the contribution margin is also dropping by 4% and now stands at EUR 8.7 million. We can see how the projects still show that they have a flatter kind of performance that has been brought about by macroeconomic uncertainty, and also because we still have to materialize the divestments of renewable assets in the short term that we've already spoken about.
At an aggregate level, GDT projects represent 13% of the total sales and 20% of the contribution margin of the company. As regards our future visibility in GDT projects, the portfolio has grown if we bear in mind that now this portfolio only covers energy projects and social digital projects and stands at EUR 440 million, which means that things are looking very good for the segment's evolution over the next quarters. As regards the balance sheet movement, although we are not presenting any details or any positions related to the net financial debt, the only thing we can say is that in Q1 of this year, no cash consumer movements have taken place.
In this regard, and in the case of the financial debt supported by assets, we are still continuing the divestment of the main renewable infrastructure we have in the Dominican Republic, whose farms are producing energy and whose sale is very advanced. We have the wind farm of Cerritos in Mexico that is working, and we hope that it will be producing power in the next few months so that it could be divested. Both landmarks will simplify the assets and the structure of Dominion's balance sheet, and this means that we will be achieving the objectives of the strategic plan. That is all for me as regards a review concerning the main figures and the main events that have taken place in Q1 this year. Now we are going to move on to your questions. Thank you very much for your attention.
[Foreign language]
Let's start off with the questions from the chat. We have Juan Carlos Piñeiro and Rafael Pérez from Plensa, and they are asking about the Cerritos wind farm in Mexico. How is the sale looking, and what kind of divestment policies do we have in place?
[Foreign language]
Cerritos is normal according to the program we had, and it is something that was stagnant for two years, and we are being much more cautious now. Now we are fine-tuning the wind turbine generators, and of the 22 wind turbines, there are 17 of them connected. What we can say is in the next two or three weeks, we believe that by the month of June, we will have all of them connected, and we will see what the ramp-up looks like.
In any case, as we said, and within this first quarter, we will be ready, and the project will be up and running. From that moment onwards, we will consider the non-binding offers we have already received, and we will continue with the sale process. As mentioned in the balance sheet, it is an asset that is available for sale, and we will try to maximize the price. There is appetite, there are offers, so let's look at them, and we are going to be involved in this competitive process. To the greatest possible extent, this year, or perhaps by Q1 next year, we'll give you an answer, but we do want to sell Cerritos.
Everything is normal, and in the meantime, we have a lower financial cost because of the interest rates, and the project is producing energy. That means that we will be minimizing the relative impact that we suffered last year in terms of process and in terms of implementation. There are several questions on the chat that have to do with the Dominican Republic. Juan Carlos Piñeiro again, and Luis Padrón. I'm going to try to summarize them to answer all three. We have the divestments of the Dominican Republic. Is this going to be done by the year 2026, or when is this divestment going to be made in the Dominican Republic wind farm? This is what we mentioned previously.
After current process in which we've selected binding offers, what we can say, and this was mentioned by the CEO during the AGM, is that we've signed the acceptance of a binding offer. We are currently negotiating the purchase contract for the shares, and this is something that also has to do with settling the equity. We are talking about the first 260 megawatts, and not only that, but the projects are already producing revenues. In other words, they are producing spot energy, and we think that both of them are going to reach their commercial operating date by June 1. That is when the PTAs will come into force too. I think that it will be by the end of Q2 or Q3. Let's see if we can formalize the sale of the operation. This is what was mentioned by the CEO this morning.
We have this issue of uncertainties and tariffs and so on, but we believe that this is a divestment operation that has been properly closed and that we will be able to materialize it, as I say, in a very short period of time. This as regards our position, and this is what we said. We have an enterprise value of about EUR 400 million, and you have to subtract the debt. In the end, we know that we have on the balance sheet, we have the part that has to do with the equity value or the investment in shares, and in a way, recovering that investment will make the infrastructural debt that we had be at zero, will go down to zero, and then we will have the normal debt, which will be tiny, below 0.5 times EBITDA in the case of the traditional business of Dominion.
That is the summary. We are on track, and we are fully convinced that we will get things done.
[Foreign language]
We are going to give the floor to Carlos Treviño from Santander, who has raised his hand.
[Foreign language]
Hello, good afternoon. Can you hear me? Yes, we can hear you, Carlos. Go ahead. Good afternoon. Could you give me the total backlog of the company? Sorry, can you hear me? Hello. I'm sorry, but sound from another call is coming in. Could you give me the total backlog of the company, apart from what you have already mentioned in the case of tech energy? What about services and projects in tech energy and in environment too? When are you going to give more information with the new operations?
[Foreign language]
Yes, Carlos, I'd say that this split of the company to give you more visibility, it's made us think about those projects or those services that were very rapid rotation projects lasting two or three months, or that backlog that we were allocating more to the industrial side of things or things that had to do with industrial sustainability. When Patricia was talking about the backlog of EUR 440 million, well, it's very similar to what we had last year too in the 360 projects that are larger and are more technological. What we can see in the global Dominion environment is that the approach has to do with the world of sustainability and decarbonization, and what we have are some projects and services that are recurrences.
These are projects that are closely related to services, and as I say, most of them are executed in a very short period of time, three months, except for some more specific or more relevant projects. We believe that the dynamics of that division really do not deserve any portfolio information, but it does not really take you anywhere.
[Foreign language]
There is also a question from [Virginia] on the chat that has to do with the portfolio too. Those EUR 440 million, is that comparable to the portfolio that we closed in 2024?
[Foreign language]
I think not, but I think that a good reference is that until last year, we reported EUR 637 million, which is what we closed 2024 with, with the renewables, energy projects, and digital projects. Right now, I think that what we would have is this figure.
In other words, the industrial projects that would be under the element of GDE. As Roberto said, we've spoken about our portfolio that had larger projects that were consumed pluri-annually, and there was a rotation, and they were consumed, which is what Roberto said, and they are much more associated with services and where there's a statistical recurrence, and therefore it doesn't make too much sense to separate them because they are much more integrated.
[Foreign language]
When are you going to give historic information so that we can compare this with a new report?
[Foreign language]
We are going to be doing so in every quarter. Whenever we do a presentation, we will also present the segmentation that allows you to compare yourself with the corresponding quarter of 2024.
[Foreign language]
If we look at how projects have evolved in tech energy, where there's an inter-annual slump, what do you think?
When do you expect to go back to growth again? Because let's say that the analysis of last year was a little bit more favorable. When do you think that the business is going to go back to growth again? It's going to grow again.
[Foreign language]
This, Carlos, is going to depend a little bit on how things go with the projects in Italy as projects become ready to build, and because you know that our strategic orientation is about getting a majority partner. I think that this was mentioned this morning by Mikel Barandiarán and Anton Pradera. It is this tariff situation that is affecting certain decisions more that have to do with implementation of projects or projects that have to do with the allocation of funds.
Let's say that we are still waiting for a project in Nicaragua, another one in Chile that we think are about to arrive. As regards projects, they are as they are, and at a given point in time, perhaps the figures will be somewhat low in a quarter, but then all of a sudden you recover what's happened throughout the year in the following quarter. This is what things are like, and the projects are there, and as I say, there will be certain temporary effects. As soon as we have that trigger, as soon as we have things in line, we will have a significant landmark for our activities or milestone.
By Q2 or Q3, I think that it will be possible to see that the results will be somewhat better than in previous years because of these valleys, these troughs that we are seeing happening all the time.
[Foreign language]
Okay, we have Rafael Pérez, and he is asking, can you say anything about any ideas about Phonehouse?
[Foreign language]
Three or four basic ideas with Phonehouse. We want to generate value. We want to apply a different kind of orientation now that we have removed all the current portfolios for us. It is a commercial outsourcing business, and we are looking for top-level partners like Vodafone, MasOrange, or Othos, or Repsol, and other additional partners. With having these people as a commercial partner, we can generate value together. What we are doing is applying the Dominion philosophy and culture 100%, as well as financial discipline, so that we can organize operations properly.
We also want to maximize the returns and the results we obtain along the way. In any case, and what we have always been telling you people, this has to do with the world of commercial services, and we believe that it has a minimum amount of relevance. It's like a tiny drop of water in the sea as regards the service operations of Dominion. As we say, this is just another division, and I'm more involved in this more personally from the corporate unit and with the idea of generating as much value as we possibly can through these operations.
[Foreign language]
Okay, we can continue with Juan Ugete from Augustus Capital, who's got a couple of questions here. The first one is the divestment in Cerritos and the Dominican Republic, are they total or partial?
[Foreign language]
We believe that the divestment in Cerritos is total, and we believe that the divestment in the Dominican Republic, with the goodwill we have there and with our presence there, could be partial over time, although we do not have any problem at supporting a possible buyer. I think that I explained this; this was explained by the CEO at the investment stay. There is nothing wrong with having liquidity on a two-year basis, but always maintaining presence there because this, let's say, protects our presence in the country and could also offer us more possibilities of carrying out additional projects. I would say that as regards to Cerritos, it would be 100%, and the Dominican Republic would be a big majority.
[Foreign language]
The second question is simplifying the group structure will facilitate inorganic growth after several years without any relevant operations.
Can you carry out any operations with a subsidiary by combining companies and allocating part of the capital?
[Foreign language]
Yes, the answer is yes. This gives you more visibility, and this simplifies things too. I think that today this was mentioned at the AGM, and perhaps in our M&A world, it's much more related to Dominion Global Environment. We believe that our ambition is, as usual, we want to grow. I think I've also explained this. I think that Mikel Barandiarán explained this. We are very diversified in Spain, in Europe, in Asia, the Middle East, and India, etc., and America, including the U.S. Why not? Because there's a pipeline of M&A opportunities of different sizes. As you know, this always has to do with whatever the sellers want to do, and they are there. They are definitely there.
[Foreign language]
There is just one final question here for you. The final question is, are you going to buy back shares once you have sold the Dominican Republic? This is from Rafael Pérez from Plensa.
[Foreign language]
I think that I fully subscribe to what the CEO said to the extent that we believe that we are going to feel comfortable with the ratio of net debt and with the commitment we have in terms of paying the dividend. We will have to look into what kind of capital allocation we make. Definitely, there could be M&A, and there could also be certain levels of buyback considering what things are like right now and if the board considers that these stocks are interesting.
[Foreign language]
Juan Carlos Piñeiro from Plensa is asking if there is any exclusion plan being contemplated for your listings.
[Foreign language]
As the Director General, I cannot answer this because we do not have the CEO, nor do we have the board members present. You know what we are like at Dominion, and you know that everything can be addressed. The truth is that I cannot answer this kind of question. I cannot do that.
[Foreign language]
We have no further questions in the chat, so we are going to finalize this disclosure of the first quarter of 2025. Thank you very much for your attendance, and we hope to see you soon. Bye-bye. Thank you very much. Bye-bye.