Good morning, welcome to the presentation results of Dominion.
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Before starting, I would like to remind you that once the presentation is over, as usual, we will move on to the Q&A session. You can leave us your questions in writing in the section for Zoom questions, or you could also either call in by the telephone or raise your hand on the menu of Zoom. We're going to kick off the presentation. We have Mikel Barandiaran, Roberto Tobillas, who's the Director-General, Patricia Berjón, who's the Director for Corporate Development.
Good morning, everybody, many thanks for attending this call for the first half of the year 2026.
Yesterday, when the market closed, we published the documentation with all the information on what these six months have been like, where several conclusions can be drawn, that I would like to underscore just to kick off with this presentation. For us, let's say that as a summary of these first six months, one of the most important things is that quarter after quarter, we're seeing how recurrent businesses, in other words, GDE and GDT Services are growing organically, they're doing so above the guidance. This means that the company is growing organically on the whole, although, as we pointed out in Q1, the project segment is still affected by the current economic situation.
In other words, we can see that the core segments, those that really have a weight in excess of 85% of our business, that are growing in a sustained manner with high single digits. The second important thing is that we're still advancing a lot in the simplification of the company, which is one of the pillars of our current strategic plan. Let's say that as a landmark for this quarter, we have initiated the sale process of the renewable infrastructure in Argentina, this is also added onto the different divestitures, activities, infrastructures that we initiated in 2023. It's obvious that this means that we have low levels of turnover less results. In any case, it's a necessary process that was to achieve more returns in the future.
In other words, this comparative snapshot that is perhaps a little bit more ugly because it has to explain what is the price that we have to pay in the short term, because we want to build the company, but in the long term. This strategic plan is going to finish, we're going to be moving on to the 2027-2029 strategic plan. In other words, with a much more simplified much more focused company, we will focus more on growth that is produced by the tailwinds of the energy transition, the digital industrial transitions. With these three ideas, we're going to be looking into the details of these different elements. As I pointed out before, in order to analyze the figures in the segments, we have to bear in mind this simplification process.
In other words, the strategic divestments that we are carrying out, together with the process for the sale of Biomass in Argentina, as well as the acquisitions of companies in our build-up process in the area of the environment. Let's just review that as regards to divestments, we have made the sale in December 2025 of industrial activities in France. That is the virtual mobile operator, CGB, a portfolio that has been transferred progressively since the Q1 quarter of 2025. Then we have the mass Orange connection shops, which started in January 2026. As regards acquisitions, you know that we've made several acquisitions in the environmental area, in Q3 of 2025, we integrated the decarbonization business in Germany. In the month of June, the Spanish company on circular economy in Spain has diversified our capacities in terms of industrial waste.
As regards the classification of the Biomass plant, or what they call activities for sale, this for the financial statements, means that we are subtracting EUR 5.9 million in turnover, EUR 2.6 million in EBITDA or the contribution margin, if we take into account the different segments, which means that we have an interruption here and along these lines, this impact is linear, so that you can make your forecast for the next few quarters. In order to cover these effects and in order to correctly interpret the financial statement with the results we're presenting here, what we've done is re-express the accounts for this quarter so that we can include this same period that we're talking about right now. Therefore, let's now talk about the first half of the year.
Well, we've closed with a business figure of EUR 497.2 million, which means that we've had positive organic growth of +0.05% at a constant currency compared to the first half of 2025. What we've done is discounted the inorganic effect that subtracts 7.5%, and the exchange rate effect that has a negative impact is -1.1%. In other words, we've had positive organic growth, even in a very complex macro context. As regards profitability, the semester's EBITDA stands at EUR 63.2 million, which means that the EBITDA margin is 12.8% over sales. Here there's been a slight slump compared to the comparable period that can be explained by the reduction in weight of the GDT Projects in the mix, which is the segment that has the largest margins. Moving on.
We have this part that has to do with projects that have an influence on the business mix, we also have the fact that Biomass, that also has high margins above the average figure, is now covered by interrupted activities in the financial statement. Then we have the recurrent businesses. Those GD and GDT Services are still behaving in a solid manner, which confirms the better quality of the business mix that has been reached in recent years and reinforced our capacity to generate cash, even in environments where there's less growth. The central structure is, those overheads, it's 2.6% of sales without major variations throughout the quarters, which shows that the group has operational leverage, and amortizations do show a slight increase as we saw in previous quarters.
In order to move on to the last line of result, we have a very positive aspect of the half year as regards financial results, which is about 50% compared. That is reduced, sorry, by 50% compared to the same period of the previous year and now stands at -EUR 15.1 million. This improvement has improved our financial expenses. There have also been improvements in the rates of exchange and a valuated correction in the photovoltaic assets of the Dominican Republic. That means that the net results increased from EUR 2.2 million to EUR 7.1 million, and this profit nearly reaches EUR 11 million if we exclude the renewables infrastructures that are for sale. In other words, the end result, once we have divested these infrastructures, is carrying on. Let's take a look at these segments.
Let's start off with Global Dominion Environment, our environmental business, which closes the semester with a business figure of EUR 251 million, which represent organic growth of +5.5% compared to the first half of the previous year, and it's the segment which has the biggest currency impact with a negative effect of the rate of exchange of -4.4%. As regards profitability, the business still is gaining operating efficiency. The contribution margin has gone up to EUR 27.2 million, which means that the margin is 12.3%. In other words, a new expansion in margins compared to the previous period. At an aggregated level, GDE already accounts for 45% of the total sales of 36% of the company's contribution margin in this first half of the year. Several milestones that we consider relevant that would have to be mentioned in this six months.
We have reinforced the position of our environmental business in Asia in emission control projects. We've incorporated new industrial customers in sectors like steel, aluminum, or power stations. We've also signed a framework agreement, a five-year framework agreement, for thermal efficiency services for two European plants of Aurubis, which is the leader in terms of copper in Europe. In circular economy, we still see a high level of recurrence with contract for the recovery of industrial waste in Spain and Latin America, and the presence of new countries like Turkey, which means that we have a greater diversification of customers, which is something that we want to achieve in all of our areas of activity. As regards our activities in the Gulf, we still feel certain effects there, because in Q2, especially as from April, we've had less activity than we expected.
We're talking about EUR 1 million less of EBITDA that could be affected by problems associated with executing things and because of the lack of materials. GDT Services. This is the segment that is focused on the electric and telecommunication grids, which closes this semester with a business figure of EUR 221.5 million, which means that it's a growth of 9.8% of organic growth. It is the segment that has grown most, and the one that had also concentrated most of the divestments because of the sale of B2C businesses that are not strategic. The contribution margin reaches 75% of the sales for the first six months of the year, which shows that we have more operational profitability than most of the activities. GDT Services represents 45% of the total sales and 51% of the group's contribution margin.
In Q2, in this segment, we have carried on reinforcing our position in the sector of electric grids, boosted by the electrification process, which means that we’ve signed new contracts with good margins. Mention would have to be made about the extension improvement of the agreement with Endesa in Spain for another six years. Finally, we have GDT Projects that closes the first half of it with a business figure of EUR 51.4 million, with a contribution margin of EUR 10.3 million. As we pointed out at the beginning, this geopolitical instability has reduced the trust of businesses and means that people are more cautious in terms of global investments. This explains the lower level of activity in this segment compared to the previous year. We also have to compare the projects with 2025, which was a very strong period.
As you know, the projects are not linear, but rather they are based on turnover milestones, so we could not really find significant data if we did focus on specific or short periods of time. Therefore, the snapshot for nine months will not have such a sharp impact. Although what is relevant is that we have maintained the solidity of our portfolio with a backlog of EUR 369 million, and once again, without any cancellations of projects to date. Mention has to be made of the signing of an agreement for the new project of the Puerto Cortés Hospital in Honduras that could kick off at the end of this year or perhaps in 2027. Let's move on now to the balance sheet.
Let's say that the balance sheet for this half year has the effect of the perimeter changes because we’ve consolidated the assets of the acquisitions that the company has carried out during this first half of the year, and also because we made available for sale Biomass in Argentina. As a consequence of this, we have deconsolidated its assets as well as its liabilities that can be seen in the accounts, whose net value is over EUR 22.9 million. The net financial debt remains practically stable. When we closed in 2025, we ended up at EUR 135.9 million. The main movements in this figure were, apart from Biomass, are also related to M&A operations, that is, current operations and operations that took place in the past. We'd be talking about something like EUR 11 million in disbursements and with the seasonality of the circulating capital, working capital.
Well, there's been a variation in working capital of EUR 39.3 million, which is the end result of the inclusion of the net assets of the Biomass plant in Argentina and because of the conversion differences into financials. As regards our equity, we’ve incorporated the profits of this half year, EUR 7.1 million, and the dividend, that is, that was paid in July on July the ninth, EUR 8 million, and the payment of the dividends in minority shareholders. There's a conclusion. Well, there's been a positive evolution because there's been organic growth above the guidance in our recurrent sectors, that is GDE and GDT Services, which shows that the strategy is completely valid. Secondly, this project segment is still affected by the situation, the current macroeconomic situation, although there could be an activation at the end of the year.
Well, in this quarter, well, we've carried out another of the simplification stages with the sale process of Biomass in Argentina. In other words, we're going to be facing the last part of the year with more visibility in recurrent activities, and we believe that there could be a certain amount of reactivation in these projects so that we can go back to lines of execution that are much more in line with what we've done in the past. This is where the analysis ends, and we're going to be moving on now to your questions. Thank you very much for your attention. Okay. If you're connected via Zoom, you can send your questions in writing through the Q&A section, or you can raise your hand by clicking on the hand.
If you're following this via the telephone, please enter number 9 so that we can give you the floor. Number 9 followed by an asterisk. Well, firstly, we have Carlos Treviño from Banco Santander.
Good morning, and thank you for giving me the floor. I have a couple of questions. The first one, in Q1, you were talking about EBITDA of about EUR 150 million. Do you still think that you're going to remain at those levels? I'm surprised to see, looking at the backlog, I'm surprised to see the weakness of new orders, because according to my calculation, it's only been EUR 3 million in Q2 and EUR 4 million in the Q1 of the year.
If you take a look at the pipe, now, do you think that this is going to speed up or do you think that the current context is going to penalize us still? I understand that in these figures that have not been included in the backlog, the hospital in Honduras, you signed the agreement. I suppose that there's no firm order. Thank you.
Good morning, Carlos. Well, as regards EBITDA, as you know, this is an estimate because I think that in Q1, what we said is that at this point in time, and bearing in mind that it's the last year of the strategic plan, we were significantly increasing.
Apart from the recurrent EBITDA of the company, which we think is about EUR 135 million, which were fully guaranteed, although there could be difficulties that we are all familiar with, and that there were 25 million that depended on the project area. It depended on how we executed this project portfolio. As you can see in the backlog, they are available, and what we have to do is carry all of these things out. It's very difficult to forecast or to know what is going to happen in the future, because yes, we know that there are going to be positive things, once the summer is over, but I cannot guarantee everything, of course. In any case, I think that we are very close to achieving our goals. As regards the project portfolio, yes. Yes, we've incorporated very few new projects.
We haven't included one of them projects that was included by, mentioned by Patri, but we're not going to do so until we sign the loan agreement so that we have an absolute guarantee that we are going to be paid. Which would happen at the end of this year, and if not, it would move on to the following year. As regards renewables, we have not included projects in our backlog or our pipeline until we have total guarantees from the company that is buying our projects so that they can be executed, and that's where we stand. Any more questions?
No, that was it.
Well, let's say that in our pipeline, we only reflect those things where there is a commitment. We are being much more conservative when we deal with our pipeline.
That doesn't mean that we have got a much more extensive pipeline, and we have the example of Puerto Cortés. Even though the agreement has been signed, we have not included it in our pipeline until the execution is agreed to. Okay, Luis Padrón now. You have the floor, please. From GVC Gaesco. I think you're muted, Luis, I'm afraid.
Luis, [Foreign language].
Luis, I'm sorry, but we can't hear you. [Foreign language]. We can hear you now. Okay, good. Wonderful.
Well, good morning. I've got several questions. Do you know when it is you're going to be presenting the update of the strategic plan? This is one of the questions I had, and the second question has to do with the sale of assets. In other words, the issue of Cerritos.
Perhaps, could you give me a timing as regards the possible sale of Biomass in Argentina, the biomass plant? Then as regards projects, and bearing in mind the results of Q2, as far as trends are concerned, have you seen any kinds of changes, or do you have problems with the funding? Or I don't know. Could you please be a little bit more specific about how projects are evolving? That's all from me. Thank you very much.
Well, thank you very much. Luis, as regards the strategic plan and its presentation, we have not yet confirmed a date. Let's say that we are still focusing on the logistics. In any case, we'll be talking about, I don't know, the second week of November, for instance. That is our intention, and we'll let you know as soon as we possibly can.
As regards projects, we are currently looking into, as I said previously, we want to achieve levels of execution that perhaps will not be reflected in Q1, but perhaps they will appear in Q4, which would be very similar to what we've done in the past, too.
Oh, yes, Luis. Look, this is Robert. As regards the other two questions, in other words, what is the situation like in terms of projects? Well, I think that there are two issues. One of them is clearly that countries like Nicaragua and the situations in Chile with concessions and co-funding, or countries like Honduras, are much more related to macro variables than to the conditions that make it possible to get funding. It's true that in this complexity or in this instability of macro variables that we've experienced, you know that certain approval processes have been slowed down.
I think that there's more than pipeline. There are commercial agreements that have been agreed upon, and we are still waiting for things to be activated and for these financial agreements to be closed. As regards renewables, I would just underscore, and this perhaps has to do more with Latin America, with the signing of PPA in the Dominican Republic. We've had some auctions, and the funding arrives as a consequence of signing PPAs. In the case of Ecuador, we have to receive recognition of the index for PPAs at clearance, and until that index has a significant impact, we can't do anything. This has to be closed and approved by the government or the Ministry of Finance.
As Patricia pointed out before, we're being very rigorous in the execution stages because we prefer not to start certain projects and not start them until we feel completely safe. I'd say that these are the two variables that are affecting us. As regards the sale of assets, I would also like to answer Miguel, because we've reduced our interactive activities and Biomass, for instance. We believe that this coincides with our accounting value, and we hardly expect any differences, and we think that the prices are perfectly suitable, and these are the prices that we will be able to achieve. In this value, we've included the possibility of negotiating debt in a better manner that could improve our equity. This as regards Biomass in Argentina. As regards Cerritos, I would just like to say that, well, it's somewhat terrible because of the Mexican bureaucracy.
I read yesterday in the newspapers, in the Mexican press, that the Secretary of State for Energy was going to facilitate the migration process for all his old projects. We've already charged for the power that we've delivered, and we are very close to the commercial operating date. Even so, we estimate that this could take place towards the month of October, according to the most recent meetings we've held with the Mexican institutions and authorities. In this regard, we are still working, so that with this situation and other COT situation and with a couple of long-term purchase and sale agreements we have for PPAs plus all of the situation.
For the candidates that say that they are interested in this, we expect that as from the month of October, we will be able to reduce a much more two-way negotiation so that the situation by the end of the year can be improved, or perhaps next year. I think that the important thing, as Patricia pointed out before, is that in a way, what we have done is we've reduced the discontinued activities in the two renewable infrastructure assets that represented the end of the IPP strategy that we decided to abandon a couple of years ago.
As you know, I think that this means that the KPI, as was pointed out during the AGM, that we are going to be talking about has grown, and that these assets were giving us a profitability of 11% or 12%, which does not agree with the ambition or the expectations that this company has in its strategic plan as regard owner terms for businesses of recurrent execution we have for the plan. This is the answer. I think that we have answered the question from Ignacio Andreo and from Miguel Medina, too, if I am not mistaken. Arthur Gomia from Cobea Finance asking via the chat, if we can give more data. Are there any divestments that are to be carried out in the future?
I think that what we did in June is discontinue those activities that we considered were non-core, and you know that there could be some activities within Dominion in the simplification process or things that are much more geared towards commercial marketing or things that have to do with some issues that we have in a joint venture with companies that are more related to the IT world, but which do not have a very relevant impact. I think that basically what we are doing now with these actions, we are simplifying things, both in Liberum as well as the Dominion business, and we are getting ready to launch this new strategic plan. In any case, perhaps, what I could also say that this question that comes from Arthur is very relevant because we are really focusing a lot on our core activities.
Therefore, it is relevant to ask questions as regards how much this represents in terms of turnover, et cetera. This will be in the next strategic plan. We will be talking about the activities that have to be divested so that we can have a clear-cut picture of where the focus of the company is and to see how these activities are going to grow, which are the core activities as regards what we are seeing here, because this inner transformation process, you know that this makes comparisons a little bit more difficult, because what we have to do is we will clean those activities that we are divesting and see what can be done in the future. Okay, there is also another question, Luis.
Will the timing for the favor of Biomass? I think that we have several alternatives for this, but I think that we have a short-term vision.
We have a de facto situation in which we can transfer Biomass. I think that it should take place sometime this year, perhaps in Q4. Perhaps this is something that could happen in Q4 because you know that this is being considered and things are in motion. We are talking about Argentina, which I suppose has certain difficulties, of course, with the summer in the middle. In any case, we are involved in the negotiation process right now. Diego Martínez says, "Do you think that the BPA for Q2 is going to be similar to the one reported for Q1?" This was mentioned by Mikel before. I think that we are at lower activity in the first half of the year. That shows a low range of this EBITDA of EUR 125 million euros. That should be our floor.
You know that we are a company in which operational leverage of contribution margins and structures, as well as the Liberum, you know that this makes us think to the extent that we stand above that EBITDA, we should have a BPA that is higher in relative terms compared to the figure reported for the first half of the year. If you have any additional questions, this would be the right time to go ahead with them, either via the chat or by raising your hand. There are no further questions, we will close the presentation here. Thank you all very much for attending today. Thank you very much, and I hope that you enjoy your summer holidays. Thank you very much. Goodbye