Morning, everyone, and thank you for standing by. Welcome to the Soltec full year 2023 results. I'm Meritxell Pérez, Investor Relations Director, and today I'm joined by Raúl Morales and José Núñez. They'll take you through the key highlights of 2023 and the financial performance of the year. After our prepared remarks, we will move on to the Q&A session, where we will take your questions. You can submit them from now via our conference website. I'd like now to hand over to our CEO and Founder, Raúl Morales. Please, Raúl, go ahead.
Thank you, Meritxell. Good morning, everyone. Today, before presenting our 2023 results, I have several announcements to make. When I founded Soltec 20 years ago, I knew that solar energy had a great potential and that it was a sector with a great dynamism, but I never imagined the huge opportunities that I have experienced in this sector over the last 20 years, nor the challenges from which I have learned important lessons. Soltec was born in the year 2004, primarily as a fully integrated developer of solar PV projects. After a few years, I saw that the trackers I was buying from third parties at that time were immature, so we designed a much more technologically advanced tracker, adapted to the needs of the industry and to the projects we were developing.
There have been many ups and downs in the industry, but since then, we have continued with a clear focus on solar trackers, and today we are one of the most recognized and technologically advanced solar tracker suppliers in the world. In 2018, we decided to create a specific business unit dedicated to develop projects, to diversify our business and provide another revenue stream for our tracker division. Today, we have 13 GW under development in very relevant geographies. We continue to growth, always committed to the sector, and in 2022, we gave a new step towards greater integration with the new activity, asset management. We decided to become an IPP, retaining part of the assets we develop to generate more synergies, reduce the seasonality in terms of profitability and cash flows, and increase our business intelligence.
Our sector is extremely dynamic, and it is therefore important to maintain a high degree of the flexibility, diversification, and adaptability at all times. Today, we are taking another step. We are evolving towards a specialized solar player. From now on, Soltec is divided into two divisions: tracker and energy. Within the industrial division, we will naturally focus on the activity in which we have a leading position globally, the supply of solar trackers, while maintaining the other activities with limited and/or residual contributions. As far as the energy division is concerned, it includes both project development and energy sales, with a clear focus on value creation. Both divisions have multiple growth levers, thanks to our market-oriented strategy with technology and innovation. We have a very strong growth outlook, driven by the accelerating demand for clean, renewable energies.
Our goal is to become a global market leader in the industry. To lead and drive the success of the important changes taking place in our business, Soltec has appointed Mariano Berges as Chief Operating Officer. Mariano is an accomplished executive leader and pioneer in the solar industry. He brings in-depth knowledge of the energy sector, a strong global financial and operating background, and valuable executive management experience, further strengthening the company's management structure. I'm very pleased with this announcement, a new step towards a greater value creation, and I personally give Mariano a warm welcome. Considering the fine-tuning we are implementing in our business, we will be updating our business plan during the year. Our visibility of 2024 is good. Many levers will push the business towards higher value creation in an unstoppable industry.
There is no ceiling for solar energy, and we are well positioned to capture this growth. Our tracker supply will continue to grow based on the increasing demand, mainly in the U.S. and Europe, with volumes from 5-6 GW and EBITDA margins from 6% to 7%. Regarding our energy divisions, we are fine-tuning our strategy, prioritizing value and focused on the most generating opportunities in key markets. In addition to our new organizational structure we are introducing, I would like to emphasize that we, we have initiated several work streams, including a number of cost-saving activities, to become more efficient and strengthen our profitability. We are optimizing our corporate structure by reducing our presence in non-core activities and/or geographies. Let's move on the result of the year 2023. 2023 was a very eventful year.
Our consolidated EBITDA for 2023 is above the consolidated guidance provided to the market and above market consensus. As we expected and shared with the market at the beginning of the year, 2023 was very backloaded. Q4 was exceptional, and we were very able to achieve good margins for our tracker supply business. In our tracker business, volumes in our target regions remain very healthy, and our tracker gross margins are above 26%, with an EBITDA margin of 8.5%. In our energy division, our pipeline of projects under development is very healthy and continues to progress towards higher levels of development and achieving relevant milestones. We are prioritizing value. We have closed five deals in 2023, selling 1,091 MW of projects in the early stage of development, generating cash revenues of EUR 9.5 million.
These deals include additional earn-outs to be recognized in future years, depending on certain milestones related to the development of the projects. All of them include the sale of our trackers. Regarding asset management, we already have 501 MW under operation or under construction. On a different topic, but one that is very much on the minds of many investors, including myself, I would like to highlight and clarify our investment framework. It is very selective and disciplined approach. On average, the spread of the IRR to the WACC is between 200 and 300 basis points. Value creation is supported by the PPAs we close and the lower CapEx with more than offset that the current interest rate environment. In 2022, we set out an ambitious growth strategy.
Our key focus throughout the execution of our plan is to safeguard a healthy capital structure and ensure the best possible value from our investment decisions. Today, our business plan is underpinned by a fully self-funded investment program that will not require additional capital to be raised in the market. Despite the good growth the industry is experiencing, short-term macro trends mean that we need to extremely diligent and disciplined in our future growth. Let me provide you additional visibility on the key challenges we see in the industry and how Soltec is addressing them. First, macroeconomic developments continue to challenge the industry through a high cost of capital. We have seen an increase in interest rates globally in 2023, which has had an impact on the market.
In our view, the profitability of RTB projects remains very similar, mainly because CapEx is being reduced globally. Equipment prices are falling, especially module prices. Solar trackers have also experienced a reduction in the ASPs in 2023, partly due to the increase in module efficiency and partly due to the market trends. Currently, ASPs are in the range of $0.10, depending on the region. We have seen a slight increase recently due to the logistical issues around the Red Sea, and even if it is a temporary issue. In our energy division, we are targeting projects with significant value creation and a spread over the WACC of at least 200 to 300 basis points, and interest rates have not had a significant impact in this spread. Second, electricity prices.
To offset the volatility associated with electricity prices, we are pursuing a PPA strategy to guarantee long-term prices. In 2023, we closed several PPAs agreements with tier one off-takers above the market average, and we will continue along this path in 2024. Third, supply chain. Supply chain issues eased during 2023. We have significantly diversified and increased our suppliers, with a strong focus on the U.S. market and increased traceability to reduce delivery risks and guarantee local content. In terms of logistics, there have been additional disruptions since December. Red Sea issues are adding up to two weeks to the journey to Europe, and in some cases, tripling the logistics costs. We have reached agreements with some shipping companies, and we do not expect an impact on the margins coming from this issue. Four, let's talk about government support.
Governments around the world continue to implement new initiatives that strengthen the structural push for renewables and accelerate their growth. There are many reasons for this: energy independence, security, sustainable transition, lower cost, et cetera. As you know, we focus on low risk, high growth countries with a well-diversified strategy by country. The most relevant for us are Spain, Italy, the U.S., and Brazil. In Spain, in terms of permitting, we have the European guidelines that reinforce national laws, and there are national laws, and there are important steps taken by the current government to accelerate this. There are currently more than 30 GW pending construction in Spain. The Royal Decree , approved on December 28, provides an additional six months for construction permits and three additional years for the project completion.
In my view, this is a good initiative that will allow to structure the planning and connection of new plants to the grid. It will help to overcome the bottleneck in which many projects have been held up by administrative bureaucracy, and will promote legal certainty and predictability in the medium term. However, the sooner this project can be connected to the grid, more chances of better finances-financing and PPAs. As far as the United States is concerned, the Inflation Reduction Act was published in 2022, and at the beginning of the year 2023, there was some uncertainty as to how some of the measures would be implemented, so we have seen tracker supply focused on the second half of the year. Let's move on the business update.
We supplied 4.3 GW of trackers in 2023, an increase of 13% compared to 2022. Our track record is more than 20 GW since 2004. Q4 2023 was particularly important in terms of tracker supply. This exceptional situation was mainly due to the late closing of contracts in the year, and was possible thanks to our flexible supply chain and outstanding manufacturing capabilities. By region, the United States experienced a 5% increase, representing 26% of the total revenues. Spain represented 28% of the total revenues, with an increase of 175% year-over-year. In the case of Brazil, it represents 19% of the revenues, with a flattish evolution versus the previous year. As well known, we work with tier one customers, mainly global utilities.
This is a key factor that help us to penetrate different regions. Our backlog is defined as contracts signed, pending to be executed. As of December 31st, we had EUR 470 million. This reflects the good health of the business. Our pipeline includes EUR 17 billion of contract not yet signed, with a certainty, a certain probability of success, out of which EUR 1.4 billion have a probability of success equal or higher than 15%. Innovation has been an integral part of Soltec since its inception, and has contributed greatly to the company's success and differentiation. This commitment to innovation has enabled Soltec's value proposition to be one of the most comprehensive and differentiated in the market.
Soltec has been a pioneer in the introduction, development, and commercialization of various solar tracking technologies, such as single-axis standalone trackers, self-powered trackers, or bifacial trackers. In 2023, we continued to optimize our products and processes to make them ever more efficient. We have released a study confirming a reduction of between 12% and 14% in the cost of earthworks using our SFOne tracker. We apply a wind analysis to the design of our tracker, an innovative method that accurately estimates the behavior of the tracker under the action of the wind. In addition, we have developed an application dedicated to improving the efficiency of earthworks in photovoltaic solar energy installation. The company has also developed innovations to optimize solar installation through advanced algorithms.
In 2023, Soltec launched a new bifacial tracking algorithm, which searches for the optimal position of the solar trackers, taking into account not only the front radiation, as well as previous tracking algorithms do, but also the rear radiation. An improvement in energy production of up to 0.3% has been observed. TeamTrack is a tracking algorithm that looks for the angle closest to the perpendicular position of the sun, and then adjusts the position of the solar trackers to minimize the negative effects of the shadows on photovoltaic generation, taking into account non-constant slopes. Additionally, Soltec Diffuse Booster algorithm aims to increase the PV plant output, even on cloudy days.
In 2023, we have also updated our 2007 algorithm design to protect modules from the effects of hailstorms, and we have also opened a laboratory for electrochemical testing of green hydrogen. Let's talk now about our energy business. Soltec has built a platform of projects under development in high-growth PV markets. We developed the project with our own development teams. Our goal is always to sell the project at RTB or earlier, depending on the value creation of each project, based on a case-by-case analysis. As of December 21st, our pipeline stood at 13 GW. We have a backlog of 593 MW. These are projects that are fully de-risked: 488 MW in Brazil and 105 MW in Spain. 2.9 GW are at an advanced stage of development.
Most of these projects have already been partially rotated, and have already generated cash for the company, although further milestones are expected to be reached to crystallize further value creation. 2.1 GW in Italy, 411 MW in Spain, 173 MW in Brazil, and 135 MW in Colombia. 2.5 GW of early-stage projects in Brazil, Italy, and Spain, and we also have 7 GW of identified opportunities. We are prioritizing key markets and focused on value creation. In Spain, in addition to this project in partnership with TotalEnergies, 0.21, we have, sorry, 21, we have managed to build a very attractive portfolio, and the portfolio that we have in Italy with Aquila and Acea are reaching key milestone and we, as we speak.
In terms of megawatts rotated, in this year, 2023, Soltec Development sold 1.4 GW of assets in Spain, Italy, Denmark, and Colombia. This strategy is enabling us to crystallize the value of our pipeline and self-finance the capital required to fund our business plan. Capital proceeds from exceptional, from external disposals, reached EUR 9.5 million, and further amounts linked to the development of the projects will be achieved in coming years as certain development milestones are reached. 612 MW are expected to reach RTB in 2024, and 531 MW will reach ready-to-build status in Italy, important milestone that will contribute to crystallize value. As you know, in 2022, we have launched our asset management business to complement our development portfolio.
In our asset management business, our goal is to have between 750 MW and 1 GW of projects under operation or under construction by 2025. As of December 31, the company already had 501 MW under operation, construction, or about to begin construction. As of December 31, we have three plants under construction in Spain, with the mechanical completion, finish, and PPA secured for the three plants. Financing has been closed for one of the plants, and the other two are expected to close their financing agreements during the current financial year. In addition, we have 238 MW at RTB in Spain, which will start construction in the coming weeks. As I have reiterated, the company has a very clear investment framework with a very selective and disciplined approach to deliver strong returns.
We target an unlevered IRR of 200 to 300 basis points over WACC. We leverage on our good PPA closing capabilities, together with innovative financial structures that combine senior debt and local community investment to optimize the IRR of the projects. With this, I hand over to José.
Thanks, Raul, and good morning, everyone. Let's move now to the next section of the presentation, the full year 2023 financial results. On slide 23, we have a quick summary of the full year 2023 financial results for Soltec Power Holdings, both on a per year and on a per quarter basis. As usual, we have focused on three key metrics: revenues, adjusted EBITDA, and net profit. As Raul has explained earlier, consolidated revenues reached EUR 587.2 million, a 3% increase versus 2022, mostly driven by the strong demand for solar trackers in our main markets, mostly concentrated at the end of the year, as we mentioned when we released the guidance for the year. Consolidated revenues per quarter have been improving throughout the year, totaling two hundred and eighty-three point one million euros in Q4 2023.
118.3 million EUR increase, almost 72%, compared to the Q4 2022 figure. During 2023, we have seen a continuation of the trend we saw in 2022 in terms of profitability in the tracker division, triggered by keeping input prices, supply chain, and logistics under control, while maintaining a sensible pricing strategy. Our EBITDA margins have been positively impacted, reaching record levels, 8.5% of our sales, well above the average values we typically expect for this business, 6% to 7% of our sales. As usual, before we go any further, let me remind you that the consolidated adjusted EBITDA does not only include the EBITDAs generated by our different businesses, but also the corporate expenses incurred by Soltec Power Holdings and the consolidation adjustments.
EBITDA at the end of 2023 was EUR 56.5 million, compared to EUR 32.6 million at the end of 2023, while the Q4 figure reached EUR 55.9 million, EUR 31.7 million more than the Q4 2022 figure. Finally, consolidated net profit was EUR 11.7 million, compared to 13.1 million at the end of 2022. On slide 24, we can see how our tracker division reached revenues of EUR 569.2 million. As explained before, the EBITDA margin for the tracker business was 8.5% at the end of 2023, achieving a Q4 2023 margin over sales of 16.4% due to the activity levels we experienced at the end of the year.
The increase in profitability has been driven by, first, significant demand for our products worldwide, but most specifically in Europe, USA, and Latin America. Second, improving conditions on the business environment. If we move now to slide 25, we can have a look at the breakdown of our sales at the end of 2023. On the left side of the slide, you can find the distribution by activity, and on the right side, we have the distribution by geography. Tracker supply represented 75% of our sales at the end of 2023, while construction services was 25%. And as we have explained in previous calls, we expect this activity to reduce its contribution to the business as it focuses on lower volumes with only key customers.
By geography, Latin America leads the way in 2023 with 39% of our sales, 19% coming from Brazil, and another 20% coming from the rest of South America, followed by Europe, 35%, mostly from Spain, and North America, U.S., with 26% of our sales. As you can see, the Americas as a whole account for 65% of our revenues figure at the end of 2023. On the next slide, slide 26, we have the evolution of our sales, tracker gross margin, and EBITDA margins by quarter for the last year. If we look at the tracker gross margins, we have been constantly achieving high returns throughout the year, although they have not been translating into high EBITDA margins until the end of the year, when we have increased our activity levels.
On slide 27, we have a quick summary of the key financial metrics of our energy business. Our revenues reached EUR 18.6 million in 2023, versus EUR 11.1 million in 2022, and adjusted EBITDA was EUR 8.7 million, compared to EUR 6.2 million at the end of 2022, due mostly to the contribution generated by the assets under operation, Araxá and Pedranópolis , despite the fact that the sale of assets to third parties had a lower impact in our income statement in 2023 than in previous years.
Soltec rotated 1.4 GW in 2023, 100% ownership in a 130-MW portfolio in Colombia in early stage, 100% ownership as well in an 850-MW portfolio in Denmark, also in early stage, 49% of a 52-MW portfolio in Italy at ready-to-build status, and also 65% of a 59-MW portfolio in Spain in advanced stage. It's worth mentioning that we still maintain a very healthy pipeline under development, 13 GW, which is evolving over time and capturing the attention of relevant players, leading to many currently active M&A processes, which will be completed over the coming weeks and months. In addition, we also expect to see additional contributions positively impacting our income statement and cash flows coming from assets already sold in previous years as they reach new development milestones.
On slide 28, we can see our debt profile as of December 2023. Debt is split between the corporate debt linked to our tracker business and the debt linked to our energy division. As you can see, the debt related to our tracker business, EUR 89.3 million, is mainly related to the syndicated revolving credit facility, which has an impact of negative EUR 9.5 million in our income statement. For the energy division, debt is mostly related to the projects under operation in Brazil, which account for EUR 58 million closed with BNDES, and the Incus facility we signed at the beginning of 2023, which totals EUR 68 million. These two facilities have an impact of negative EUR 5 million and negative EUR 2.3 million in our 2023 income statement, respectively.
Additionally, we have other minor facilities and the impact of IFRS 16 leases, which elevate our gross financial debt calculation to EUR 257.3 million. Our consolidated net financial debt at the end of December 2023 is EUR 220.4 million, which represents a 3.9x multiple of the consolidated adjusted EBITDA of the year. And now I hand it over to Raúl for the closing remarks. Raúl?
To wrap up, we have a massive growth potential ahead of us. Solar is still underpenetrated, and our market-driven strategy is enabling us to capture new opportunities in key markets. We have multiple growth levers in the business that we will crystallize in the coming months with good growth visibility. We are fine-tuning our energy division to ensure the best possible value from our investment decisions, maximizing project valuation, accelerating proceeds, mitigating risk exposure, and focusing on delivering strong returns and value to our shareholders. We are a global leader in a growing industry with short-term challenges, but long-term growth fundamentals are very appealing. Thank you.
Okay. Thank you, Raúl. It's time now for the Q&A session. We've got the first question coming from Tomás Reyes, CaixaBank. Could you explain the seasonality quarter on quarter of the industrial division margins? This one's for José Núñez.
Hi, Tomás. Good morning. Well, let me start by saying that, if you look at slide 26 of our presentation, you'll see that the gross margins, percentage-wise, have been quite stable over time. So I guess you're talking about EBITDA margins. The seasonality related to EBITDA margins is mostly related to the fact that activity levels change every quarter. So in quarters in which we have low activity levels, the gross margin, in absolute terms, is relatively low and is not enough to cover the general expenses of the company. And the opposite thing happens when we have large volumes, like for instance, in Q4 2023, when they are so large, they cover very much the general expenses we have for that particular quarter, and therefore, we have an increased spike on EBITDA margins, okay?
As I said before, gross margins, percentage-wise, have been relatively stable over time. Gross margins, in absolute terms, have been changing over time based on the activity volumes, and that's basically what's causing the differences in EBITDA margins on a quarter-by-quarter basis.
... Next one is for Raúl. Could you give us a geographic split on the 5-6 GW deliveries guided for the tracker division in 2024?
Hello, Tomás. Thank you for your question. The geographic split for the tracker will be 2024, roughly, Europe will be around 40% to 50% of the total volume in terms of megawatts. Basically Spain, that's accounting for almost 80% to 90% of that 40% to 50%. USA will account for 30% to 40% of the volumes of the tracker supply. Latin America, and specifically Brazil, will account for about 10% to 20% of that volumes.
What is the net debt level you expect at 2024? What was your average cost of debt this year, and what do you expect for 2024?
Thanks. We will provide additional information on what we expect in terms of net financial debt for 2024 at the end of this year, when we released the update on the business plan. But I can tell you that in terms of cost, we do have, as you know, three main facilities. We have the syndicated revolving credit facility, and for that particular facility, the cost for that facility is Euribor one month plus 2.5%. Then, we have the Incus facility, and we're paying between 5.5% and 6% for that particular, on an annual basis, for that particular facility. And then, we have the BNDES project finance debt for the two assets that are already operational in Brazil.
But we're basically paying inflation plus 4.37% for one project and 4.29% for the other one. So... But inflation, as we always say, is also part of the adjustments we have on our PPA price, and therefore, there's a natural hedge between the PPA prices, the updated PPA prices, and the updated interest rates we pay on these projects. And we do not expect to see significant changes in 2024 regarding these facilities, so cost should be more or less the same.
Next question comes from Cleber Santana, from Bradesco. EBITDA margins have been 8.5% for the tracker division, but for this year, 2024, they will already drop to 6% to 7%. To what is due?
Okay. Thanks, Cleber. Good morning. Well, essentially, it's not that they are dropping, it's essentially that our long-term view, and this has been shared with the market since the very beginning, since we basically got listed. Our long-term view on EBITDA margins for the industrial division and now for the trackers division, has been that, on average, basically, we should get between 6% and 7% EBITDA margins. Now, 2023, in that sense, has been exceptional. We've been able to achieve a higher margin than initially expected, but it's, it's an exception, as I just said. In the long run, averages should be between 6% and 7%, as we've always stated, and, on, on a given year, if everything goes really well, we could improve that particular level.
Again, our expectations going forward are to be between 6% and 7% in this particular industry, in this particular business.
It seems you're having some difficulties finding non-bank financing for your projects. Do you completely rule out a capital increase for this year, 2024, and even for 2025?
Well, first, we're not having any difficulties at all of finding bank finance for our projects. In fact, we just basically closed a small project finance facility with Triodos for the Totana IV project, and we're not having any issues at all at this point. But after that, after saying that, I would say that we completely rule out any potential capital increases this year or even in 2025. As we've always been very clear on this point since we released our new business plan at the beginning, sorry, at the middle of 2022, when on the capital market day we had in May 2022, and our statement hasn't changed. So essentially, we rule out any additional capital increases.
This year, 2024, you've got important bank debt maturities. At what interest rates will all the maturing debt have to be refinanced?
Well, I guess, I mean, we just have one really, the syndicated revolving credit facility for Soltec Trackers. And we do not expect, as I mentioned before, any significant changes in the cost of that particular facility.
Next question coming from Ignacio Domenech, JB Capital. 2024 outlook. I do appreciate strong volumes expected in the industrial division. What is your expectation on ASPs for 2024? Could you please provide expected EBITDA in 2024 for the industrial division?
Thank you, Ignacio, for your question. So, basically, what we expect is an ASP for 2024 of around EUR 0.09 or $0.10 per watt. So it's more or less what we had last year, a little bit less, but not very far, so very close. As we are having more sales in USA, where we have little higher ASPs. So not all ASPs are constant in all geographies, but the average will be around that EUR 0.09 or $0.10 per watt. For 2024, EBITDA margins will be, as I said, we said before, 6% to 7%.
In the energy division, there is a weak contribution in the quarter from development and asset management. Could you give us some color or more color on the contribution from Brazil?
Well, that from the asset management, it was... I mean, we do not see any weak contribution, just as expected, although some of the plants that started were at COD in February or March of the last year. So, but since then, we had a very good performance, and we are quite happy with those plans. But talking about development, it's true that energy market in Brazil is kind of flattish, as prices are quite low and demand not very high. So, development is right now working and progressing well, but we need to crystallize that value in the future.
Could you please provide targets for the energy division? What is your expected installed capacity for the year 2024? What was the contribution from recent project sales in the energy division?
Okay, obviously, we will provide more information about this particular topic when we update our business plan throughout this year. But we have already provided some visibility about the projects that will be reaching ready-to-build status in the presentation both in Italy and Spain. And that information is also some breakdown in terms of the portfolios that are linked to those projects. So again, we will provide more visibility shortly, but so far, there is some information about what we expect for the energy division in 2024.
Financial costs increased during the second half of the year, but net debt improved. Can you explain why did you see this move?
Actually, although it's true that financial cost has been increasing throughout the year, the net debt balance has not decreased. It's been increasing throughout the year as well, until the balance that we have at the end of 2023, which is about EUR 220 million. So, and as we explained when we released the guidance at the beginning of 2023, our expectation initially for 2023 was going-- was basically to have net financial debt between EUR 250 million and EUR 260 million. It's been a little bit lower than that, but it's been growing throughout the year.
There is no basically difference in terms of how the interest cost has been evolving over time and the balance that we have in our net financial debt.
Given the current share price, do you expect to initiate any buyback program?
No, it's not right now on the table.
Okay, we've got more questions coming from Richard Dawson from Berenberg. Guidance for 2024 EBITDA margins in the tracker division is below the 8.5 generated in 2023. What is driving this decrease, and can we expect the 6% to 7% to be a more normal, normal level going forward?
Well, that is not a decrease. It's, as José mentioned before, 6% to 7% is our expected normal margins in the long run. So it does not mean that a particular year, we may have a higher EBITDA margin. But, that's we believe that 6% to 7% is what the industry can maintain or we can maintain in the long run.
What is the sensible split for tracker revenue between tracker supply and construction services for the medium term?
Right now, construction services account for around 25% of the total revenues of the industrial division. In the medium term, we want to decrease that amount, and we'll be somewhere between 10% to 25%, so it will be decreasing little by little.
Is it likely to see lower revenues in the tracker division year on year?
Well, that's with the amount, the growth that we see, and we do not see sharp declines in ASPs. We do not expect lower revenues in the tracker division year-over-year.
One of the levers of growth you mentioned on the last slide of the presentation is a focus on value creation. Could you give us a sense on your targeted level of return across the two divisions?
Sure. I mean, for the tracker division, as we have explained, our expectations are to have EBITDA margins over sales, basically between 6% and 7%. And again, this is something we've been repeating over and over again since the company got listed back in 2020. For the energy division, what we're targeting, as Raúl explained in the presentation, is basically WACC plus 200 to 300 basis points.
We've got another question coming from José Cánovas from GVC Gaesco . So, Array Technologies published its results yesterday and pointed to flat volumes and declining average selling prices in 2024 due to lower commodity input costs. Could you provide your view on prices?
Well, I mean, yes, that was something that we saw in 2023, and we see in 2024 a small reduction in commodity costs. But we have to take into account that the margins that Array Technologies and Nextracker are experiencing in the U.S. are higher than the others they have in the industry. So they are going to more normal prices, and obviously, the average selling price for them will see a more sharp decline than in our case. We do not expect to be in that level.
We've got another question coming from Virginia Sanz de Madrid, from Banco Santander: Which is the CapEx expected for the year 2024 in the asset management division of the company?
Well, this obviously depends on the geography, depends on the size of the project, and depends on the interconnection cost. But I would say that the thumb rule will be around, for Spain, around EUR 0.50 to 0.60 per watt, including interconnection. I must point out, the interconnection is needed for all plants, so it has to be taken into account, and it is an important part of the CapEx.
Okay, there are no more questions on the platform right now. We can conclude with this, our full year 2023 call presentation. Thank you.