Good morning, and welcome to the conference call organized by Vidrala to present its 2025 first half results. Vidrala will be represented in this meeting by Rául Gómez, CEO; Iñigo Mendieta, Corporate Finance Director; and Unai Alvarez, Investor Relations. The presentation will be held in English. In the Q&A session, questions will be also answered in Spanish. Nevertheless, it is strongly recommended to post questions in English in order to facilitate understanding of everyone. In the company website, www.vidrala.com, you will find available a presentation that will be used as supporting material to cover this call as well as a link to access the webcast. Mr. Alvarez, you now have the floor. Thank you.

Good morning, everyone, and thank you for joining this call. As announced, Vidrala published its 2025 first half results this morning. We also shared our presentation to support today's call. We will start by quickly explaining the main numbers in the presentation. After that, we will spend time answering your questions about the business. Now Iñigo will explain the key financial performance for the first half.

Thanks, Unai. So let's begin with a quick overview of the main financial figures. For the first half of 2025, Vidrala delivered revenues of EUR 750 million, an EBITDA of EUR 216 million, and a net income equivalent to an EPS of EUR 3.22. At the end of June, net debt stood at almost EUR 215 million, which translates to a leverage ratio of 0.5x over the last 12 months EBITDA. Just a quick reminder at this stage. Italy contributed to revenue and EBITDA in the first 2 months of 2024, but was reclassified as discontinued from March onwards. So this impacts year-on-year comparisons, and we will try to focus on like-for-like trends as we go. Let's take a closer look at revenue. Sales for the first half of 2025 came in at EUR 250.1 million. On a like-for-like basis and at constant exchange rates, this represents a year-on-year decline of 6.7%. The reduction reflects the expected price adjustments of around minus 4% and ongoing soft volumes. Scope change due to the exclusion of the Italian business had a negative impact of 2%. Moving on to EBITDA. First half 2025 EBITDA amounted to EUR 216.1 million, showing a stable performance at constant currency and like-for-like scope. This highlights the benefits of diversification and ongoing footprint optimization to drive competitiveness. This operational performance translated into a robust EBITDA margin of 28.8%, reflecting an improvement of 171 basis points compared to the same period last year, underlying our ability to safeguard profitability despite challenging market conditions. Now we break down revenue and EBITDA by region based on the current scope with Italy fully excluded from the prior year's figures. As already mentioned, price reductions are visible across all our markets. Volumes are performing better in Brazil compared to other regions, although Brazil is again affected by adverse currency fluctuations. Anyway, margins remain solid across regions, thanks to our internal measures. Regarding free cash flow generation, we examine this chart that traces cash conversion over the 12 months ending in June 2025. Beginning with an EBITDA margin of 29.5%, we've directed 12.8% of sales towards CapEx and allocated an additional 4.1% to working capital, financials and taxes. Consequently, free cash flow amounts to approximately 12.6% of sales. And finally, let's take a quick look at the balance sheet. Net debt stood at EUR 214.8 million at the end of June, maintaining a low leverage ratio of 0.5x EBITDA. With this healthy balance sheet, we'll keep investing in the business and finding ways to improve competitiveness. And now before we open the floor to questions, Rául will summarize the main points and offer some additional insights.

Thank you, Unai, and thank you, Iñigo. Good morning to you all. Thank you very much for attending our conference today. It's a real privilege to receive your attention, and we today feel particularly proud of seeing how many of you are connected from different places attending this call today. Well, the results we are making public now are under our view and evidence of what we are today, the foundations of the Vidrala business profile that we are creating. That means that we are a more diversified business, more agile, well invested. We are becoming a modern packaging supplier of choice with strategic commercial positioning in 3 core regions of activity, and we remain supported by a particularly strong financial position. And so as a result of this, our second quarter results are broadly in line with our expectations 3 months ago. And this is despite the demand context remains evidently soft. In fact, actually, persistently weaker than initially expected. So my conclusion we want to share with you today is that our numbers and our profitability levels that we are making public today obtained under challenging conditions are the result of internal actions. And so this should be -- these levels of profitability should be sustainable. As a result, in consequence, we are today reiterating our guidance for a full year EBITDA of EUR 450 million with some risk of, in any case, limited negative deviations basically due to the impact of potential FX fluctuations and a free cash flow of EUR 200 million in the year. In any case, looking beyond the guidance and looking beyond the next quarter, please let me share with you, please be sure that we are proactively preparing the business for the challenges ahead. We are managing costs and operations to stay competitive, and we are investing more and better with our customer in mind. Our solid financial position today is only a motivation to remain ambitious. We feel really confident that our future belongs to us today more than ever. Thank you very much.

With that, we finished our introduction, and let's start the Q&A session.

[Foreign Language] [Operator Instructions] First question comes from the line of Francisco Ruiz from BNP Paribas.

I have three questions, if I may. The first one is if you could give more detail on Q2 numbers and volumes for -- by divisions. And what's your view on the current weakness in the U.K. market, theoretically lower volumes than initially expected, and also with the tax on packaging coming in the coming quarters? The second question is more on what you have said, Rául, on your EBITDA. EBITDA margin is sustainable from here. So I mean, with a weaker demand than initially expected at the end of the year, you reiterate your guidance. What is the level of margin that you are targeting in '25 in order to reach this EUR 450 million. And last, and I will give the floor to other questions, is a quick modeling questions on -- I mean, if you have an explanation for the lower financial costs, what's your estimate for the full year and also on the working capital?

Paco, could you repeat, sorry, the third question?

Yes. The third question is just on modeling. I mean financial cost has declined significantly versus last year. So what is the best estimate that you could give us for financial costs at the end of the year and the best estimate for working capital?

So thank you very much for your question, Paco. If we look for volumes in our 3 regions in the second quarter of the year, we got in Iberia, a minus 1%; in the U.K. and Ireland, a minus 7%. And if we go to Brazil, we got a plus 4%. If we look at prices in other regions, we are evolving in a minus 3% or minus 5%.

Just to add on that, and I pass it to Rául in terms of the U.K. market conditions, also consider, Paco, that the comparison basis for the first half was quite high, showing in the first half of 2024, an increase in volumes of 12%, mainly affected still by second round effects of The Park.

And regarding the specific situation of our sales in the U.K. market, it's very evident that this is a point of attention for us. And under our view, we know the market well. Encirc is a very solid supplier of glass in this market with a low market share. So we have the opinion that our sales performance in the first half of the year reflects basically real trading conditions in this region. This is probably where consumption is so far. But at the same time, let me insist with you that our margins in the U.K., you will agree with me, remain solid despite this weak top line performance. And that gives me the confidence that we can recover volumes and recover market share. So at the end, to make our guidance, the guidance that we officially reiterated today, possible, that means that we will end this year better conditions, and that should be a solid starting point for the next year. Encirc, our U.K. business is a great business, different, and we are very proud of this as it needs to become more competitive. So if we are able to attract new market share.

And then finally, Paco, regarding your third question more related to modeling, I should consider that our financials, I assume you're talking about cash flow view, should be below EUR 20 million for 2025, let's consider the range of EUR 18 million. And working capital, best estimate as of today should be flattish or slightly positive for the full year, depending basically on stock evolution.

And the final comment probably the most interesting part of your question, Paco, is we are very conscious, we are aware of the fact that for us to achieve our full year guidance on EBITDA, our margins should remain solid at similar or slightly higher levels than today. And if you are considering this, you are right.

Just a clarification. I didn't hear Unai on the volumes on U.K. and Brazil. And also on the packaging taxes in U.K., what's your view? I mean, how it's going to be affected specifically glass, and more particularly yourself?

Thank you, Paco. Maybe just as a recap for everyone. So I assume you're asking about the EPR. So under this U.K. Extended Producer Responsibility scheme, recycling cost will shift from local authorities to beverage producers, okay? You know that, we gave an initial guidance back in December 2024, suggesting a level of GBP 240 per tonne. The final fee was below that. That's GBP 192 pound per tonne, which is a slight improvement. And theoretically, looking ahead, those fees are -- should be adjusted depending on how recyclable packaging is, obviously, with higher cost for those materials that are hard to recycle. The reality is that it is probably too early to assess potential impact on volumes, but we are not seeing any significant changes in customer behavior. And in any case, it's relevant to understand that if this regulation means that the U.K. is less competitive, they should mean also that other regions are more competitive. And please remind that Vidrala is the group composed by 3 different regions, Iberia and others, the U.K. and Brazil. And finally, if we take a look at the very final impact, the impact on the price of the final product for a consumer, it should be no more than 2%, 3% of the selling price of a standard product. So these are not good news but probably are not dramatic.

The next question comes from the line of Enrique Yáguez Avilés from Bestinver.

I have two questions. First of all, regarding the expected recovery of demand in the second half of the year. I'd like to know what kind of recovery do you expect among business area and in which specific sectors? And what is the feedback that you are having from -- why it is taking into consideration that it has passed some time since the U.S. tariffs were announced? And secondly, I would like to have a more clear picture of what is driving the significant improvement in margins, which is much stronger than was expected, taking into consideration that prices are falling and volumes are not performing well? You mentioned internal action, what kind of internal action? What is the environment of raw materials and energy? Because honestly, I don't understand well how margins are performing so well.

Thank you, Enrique. So on your first question, recovery of demand and potential impact on tariffs. So we are reiterating today the full year guidance we gave back in April. The reality is that we are expecting more than a significant recovery on end demand. We're expecting just a progressive contribution of volumes in the second half. Probably the third quarter will be key in that sense. But let's consider that for the full year, we are expecting to be slightly positive in terms of volumes, okay, something between 0% to plus 1%. So this means that in the second half, we should be slightly up, let's say, in the range of 3%, 4%. Overall, in all regions, obviously, we're expecting better performance in Brazil than in the rest of mature regions, okay? Regarding tariffs, probably those products that are potentially more affected by them, I think about wine, I think about olive oil, and I think about specific regions of Spain, France and Portugal. So considering our exposure to that segments, considering that the relevant portion of that segments are already sent to the U.S. in bulk. So probably won't have an impact on our -- on demand on glass containers for us. So we are expecting that the potential impact of those tariffs could be something in the range of 1.5% to 2.5% of our group sales. Again, I would say as the case of the EPR in the U.K., not good news, but nothing dramatic.

And your second question regarding how sustainable our margins are, let me insist that we do consider our margins today in each of our 3 different divisions as structural and sustainable at least in the midterm. Why? Answering your question, because our margins are today mostly based in our cost competitiveness. We are improving cost in every place of the business. We are investing more, and this is a payback. We are managing costs with care in all the structure of our cost base, and that makes us feel confident that we are becoming a really competitive player. But the market is soft, softer than initially expected. So we need to keep on improving our cost beyond the current levels, okay? And as long as we are doing this, I insist our margins are today sustainable.

Our next question comes from the line of Iñigo Egusquiza from Kepler.

I have three questions, if I may. The first one is on the utilization capacity by regions. If you can share with us what is the level in each of the regions? This is the first one. The second one, considering the volumes recovery that you expect for the second part of 2025, if you can share with us how is July volumes evolving? I mean we have seen a nice recovery in Brazil, but what has been the performance of volumes in July by regions, if you can share with us some color? And a final question, Rául, would be on the M&A. You have reduced the leverage substantially. You're again below 0.5x net debt to EBITDA. So I don't know if you can share with us how is the M&A scenario these days? I mean, last call, if I remember well, you were mentioning that it was quite active and a lot of opportunities around the table. So if you can give us an update on that point.

Perfect. Inigo, thank you very much for your question. So on the first one, on capacity utilization. During the first half of the year, the group's capacity utilization was still slightly above 90% levels with all those adjustments mainly concentrated in the Iberian division, okay, both Brazil and the U.K. almost at full capacity, both of them. While market dynamics may still call for some degree of adaptation across the broader industry, at this stage, we do not anticipate any further closures within our footprint. In any case, we will remain, obviously, attentive to demand trends and continue to manage inventories with discipline.

Let me insist in responding that probably our capacity utilization rates today are slightly below the industry average in a new evidence that we are taking care of our inventories, perfecting our margins with a long-term view. As long as we remain competitive, it will be our intention to keep on capturing market share in regions or in places where we have lost some market share in the past. Following your question regarding the trading update in July, it's only July. It's 1 month in the year, but we can share with you the message that our July sales performance, our profitability in this month are basically aligned with the guidance that we are today reiterating. Nothing more to say. But to understand that the industry, the business and the market places today more volatile than it has been in the past. So probably we need to update these figures and this message during the third quarter results conference call. And regarding M&A, Inigo, I will say that our narrative remains basically the same. We are, as we have always been, continuously analyzing potential opportunities. This is part of our spirit. We want -- we have the aim to grow the business. We want to explore strategic acquisitions. We aim to enter or create solid partnerships with customers in regions where we can add value to the business. This remains the same, but we are not distracted. Let me say this. We remain very focused on the business as it is today on our current perimeter. At the end, let me make an effort to remain being a predictable company. Whatever happens in the future in terms of M&A, you shouldn't be significantly surprised. And our financial position shouldn't be stressed significantly and in any case, remain strong. It's true that we dedicate some time, a long time to our analysis. So our decisions are always the result of a deep process of analysis because we have the aim to be sure that the sellers consider us a good buyer in each of the opportunities that we analyze and to be sure that we pay what is worth for any potential opportunity that we analyze and enter into business where we really can add value, grow the future we had foreseen and are welcomed by customers. So it's time to keep calm today under my view.

Our next question comes from the line of Natasha Brilliant from UBS.

I've just got one, which is to clarify on the full year guidance. So you've said today EUR 450 million of EBITDA. I think previously, when I look back at the Q1 slides, it says more than EUR 450 million of EBITDA. So is that just being a little bit more conservative? Is it maybe just some deviations from FX? Just to clarify on that. And also on the FX, as currency stands today, just to confirm that EUR 450 million number is fine. It's just if there's any further moves on FX that there could be some changes. Is that correct?

Thanks, Natasha. You're absolutely right. As you were mentioning, we are reiterating this figure of EUR 450 million, more than as it was the case in April. Basically, this is as you were identifying, partly identifying, an exercise of prudence. And mainly this is related to, as we published in the specific slide, mainly due to FX movements, okay? Just consider that the guidance we issued back in April was done with FX for the British pound of 0.84 and for the Brazilian real of 6.2, okay? Both of them are worse today. In any case, what we guess it's important to clarify is that we expected limited variation, which means variations in the range of 1% to 2%.

At the end, let me say that -- let me add that if we exclude the effect of FX fluctuations, it's very evident, and we are very aware of it that our full year guidance that we are reiterating today means that mathematically, our second half results will be slightly higher than the first half. And okay, we are aware of this.

Our next question comes from the line of Luis de Toledo from ODDO.

Three small questions from my side. First one, if there was any effect on the blackout, if you -- after analyzing, and I assume you have not taken any provision and if it's something that is definitive? With regards to the energy hedging levels, if you could provide some information ahead of the release of the audited information. And finally, with regards to this higher volatility in FX and if you're projecting any additional measure hedging or the like?

Thank you, Luis. Well, regarding the first question, the blackout that we suffered in Spain 3 months ago, yes, there is an impact in our cost that is fully captured in our results in the second quarter. And okay, beyond this impact, that is not small, lies a big concern for any Spanish intensive industries because the circumstances that we suffered this day were difficult to manage, dangerous to manage. And it's sad for us to see that no significant correcting action has been -- has taken place so far in Spain. But my final message is if you consider the -- how serious this blackout was in Spain and you analyze what is the most impact that this has had in our global numbers, group numbers for the second quarter, that makes me reiterate that we are becoming a more diversified multinational company, stronger than in the past.

On your second point, Luis, energy hedging, you know that our energy hedging policy tries to balance protection against price volatility, also still having some flexibility by using a mix of derivatives and options to manage risk, okay? So as a result of that, approximately 75% and 60% of the group's energy exposure are hedged through derivative instruments in 2025 and 2026, which is -- respectively, which is obviously in addition to the protection provided by our long-term price adjustment formulas. And finally, regarding hedging on the side of currencies, okay? You know that we -- our policy usually tries to hedge the expected free cash flow generation in the U.K. in British pounds, and this continues to be like that. And Brazil is a specific case where the biggest part of our debt and the biggest part of our free cash flow is denominated in Brazilian real. So we have a kind of natural hedge on that sense.

We have a follow-up question from the line of Francisco Ruiz from BNP Paribas.

This is a question on the use of cash. As you commented that your focus is on the devalued business and M&A will come opportunistically, you are reaching practically net cash position. So are you thinking on a different way to remunerate shareholder or to pay special dividends, taking into account your solid balance sheet position?

Paco, as you know, our debt levels is not a target in itself. We always basically say the same. Our target is to obtain a structural solid sustainable level of free cash flow after having secured that we are growing the business, that we are remaining competitive, that we are protecting our margins and that we are, for this to remain possible structure in the future, investing more than ever with our customers, our cost competitiveness in mind. If as a result of this achievement of our long-term cash profile, we are continuously reducing our debt levels and reach to a point of being in a net cash position, that won't be a problem. We prepared to return cash to our shareholders who deserve it in every potential way that is more efficient. We have been in the past using cash dividends where we always try to create a solid, sustainable level of cash dividends, trying to avoid any distortion in the future, trying to create a predictable dividend policy in this point. And we have combined in the past share buybacks, something that we still consider as an attractive tool. And maybe in the future, why not we are to explore other extraordinary ideas, okay? Let me insist that some months ago, we paid an extraordinary dividend after exiting from Italy. So we won't disappoint you in our shareholder remuneration if the business keeps on improving as we aim.

Our next question comes from the line of Manuel Lorente from Grupo Santander.

My first question is regarding the, let's say, volume recovery on the second half of the year. I might see possible explanations for that volume recovery. The first one is, let's say, an improving macro because of less disturbances from tariffs. The second one is a potential market share gain given the massive restructuring that we have seen, especially in Europe on the last quarters. The third one might be some volume recovery associated with the narrowing of the glass to can gap because of the tariffs on aluminum. And the final might be a more, let's say, straightforward regarding easier comparables versus the first half of this year. So I don't know, does it make any sense? Do you see any of these 4 more biased towards reality? Or if any other issue that you want to add to these potential levers?

Thank you, Manuel. Thank you for the question and the answer. Well, let me add to this that Vidrala is comprised by 3 different regions that creates a good combination of demand context. So in some cases where demand is softer in Europe, could be stronger in Brazil. And that makes me think that Vidrala is becoming a real powerful combination of businesses, okay? So one thing is this, our diversification, another reason to understand our sales volumes recovery expected for the second half. And another one is insisting in your comments is true that we have suffered a number of excessive noise distortions during the first half of the year that should progressively moderate, not disappear, moderate. We are not considering a specific level of optimizing in this point, okay, just to secure that you consider us as a conservative company in terms of our guidance. And the third point is, well, as you can see, our margins remain more or less solid and significantly weaker-than-expected sales or top line performance. And this is a proof that we are competitive in each of our regions of activity, and that will help us to progressively with our mind in the long term, capture sales and recover some of the market share that has been lost in the places where it has been lost.

Okay. And again, on the margin side or in the EBITDA side for the second half of the year, apart from the, let's say, larger benefits from a greater operational leverage from the top line, the energy savings in terms of hedging are going to help a little bit versus the first half?

Not significantly because as you probably know, most of our energy for '25 is fixed so far. So our energy prices in the second half should be similar to the first half and probably up. Actually, market prices are not significantly different, okay? So the reason for our cost improvements expected in the second half because we are foreseeing some cost improvements is, again, the same factors, our continuous investment ambition, our internal actions and the reality that, I don't want to see us specifically optimistic in this message, but the reality that the first half of this year has been distorted by a specific amount of noise across our business externally and internally. So the comparison basis should be -- in terms of cost, the comparison basis should be easy to prove.

There are no further questions by telephone. I now hand it back to the Vidrala team who will address questions submitted via webcast. Thank you.

Okay. So there are no further questions through the webcast. If you have more questions or need more details, please feel free to contact us any time. That's all for today. Thank you very much for joining and listening.

Thank you very much. You all, hope you living in Europe, particularly enjoy a very well-deserved holidays. Drinking and eating in glass is best for you. Thanks for your interest.