Buenos días y bienvenidos a la presentación de resultados del primer trimestre del año 2023 de Vidrala. La compañía estará representada por Raúl Gómez, Chief Financial Officer, e Iñigo Mendieta, Head of Investor Relations. La exposición se realizará en inglés. En el turno de preguntas, se recomienda realizar las preguntas en inglés, aunque se atenderán también preguntas en castellano. En la página web de la sociedad, www.vidrala.com, encontrarán documentación de soporte a esta presentación, así como un enlace para acceder al webcast. Good morning and welcome to the conference call organized by Vidrala to present its First Quarter 2023 Results. Vidrala will be represented in this meeting by Raúl Gómez, CFO, and Iñigo Mendieta, Head of IR. The presentation will be held in English. In the Q&A session, questions will be also answered in Spanish. It's strongly recommended to pose 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 a supporting material to cover this call, as well as a link to access the webcast. Mr. Mendieta, you now have the floor. Good morning to everyone, and thank you for the time that you dedicate to attend this call. As announced, Vidrala has published this morning its 2023 First Quarter Results. Additionally, we have also published the results presentation that will be used as supporting material to this conference call. Following this document, we will dedicate the first part of our exposition to briefly explain the figures released today, to devote afterwards as much time as necessary to discuss on the business performance in the Q&A session. We invite you to access the webcast through the link available in our webpage. Starting with the main magnitudes, in the first quarter of 2023, we achieved as most relevant business figures, revenues of almost EUR 378 billion, an EBITDA above EUR 100 million, and a net income equivalent to an EPS of EUR 1.91. Net debt at the end of the period stood at EUR 316 million, which is equivalent to a leverage ratio of 0.9x the last twelve months EBITDA. Turning to slide four, we look at the top-line performance, analyzing the annual variation of revenue broken down by concepts to arrive at the reported figure of EUR 377.9 million. As it is shown in the graph, this figure is the result of a 38.3% growth on a constant currency basis. Our recent acquisition, The Park, consolidated since the first of February 2023, contributed +2% to sales growth. Volumes were down -3% in the quarter, while price mix effect was up 39%. Following the order of key business figures referred to at the beginning, we analyze with exactly the same breakdown the variation of operating income. 2023 first quarter EBITDA amounted to EUR 100.7 million, reflecting a constant currency growth of 339.3%. In reported terms, EBITDA increased by 332.6% in the period. These operating figures resulted in an operating margin EBITDA over sales of 26.6%, which represents an expansion of more than 18% points compared to 8.3% registered in the previous year, moment where it was affected by unprecedented inflationary pressures. If we conduct the analysis of last 12 months data to try to mitigate non-representative quarterly distortions and to deduct business trends, we can appreciate how we are gradually recovering more normalized profitability levels towards historical average well above 20% over sales. Finally, net debt at the end of the reported period closed at EUR 315.7 million, which is a consequence of cash generation that is still affected by exceptional working capital movements, something that was already anticipated and that we expect this effect to normalize throughout the year. As a consequence also of our firm commitment to shareholder remuneration with the interim dividend payment executed in this first quarter. Finally, the cash out for the acquisition of The Park and the non-controlling minority stake in the share capital of Vidroporto. As a result, leverage ratio stand at 0.9x last 12 months EBITDA. Now before turning to the Q&A session, I pass the word to Raúl so that he can extract the main conclusions or highlights and make additional comments that he considers appropriate. Thank you, Iñigo, thank you all for attending this call today. We really appreciate your time. Well, after a quite a volatile year 2022, I think that we are where we were planning to be some months ago. The results published today are a good proof of the strong fundamentals of our business an evidence of what we are after last year that was completely distorted and maybe made more difficult for you to read and understand our real underlying business profitability. I mean, our sales prices are today more adapted to cost. Our industrial footprint is stronger than ever. We consider that we are gaining some competitive advantages under a phase of very ambitious industrial investments, we are actually further diversifying the business, always keeping a particularly solid financial position. Under the basis of today's numbers and the very deliberate intention to promote transparency and a business story that you all can consider predictable, we would like to provide you some color on our business outlook for the full year 2023. First, we expect to maintain a double-digit growth on sales for the full year 2023. The obvious implicit flatting sales volumes growth reflect the fact that we are running still at low inventory levels and also reflects an overall demand outlook intentionally conservative given risk of a weaker economic context. Also, not less important, the implicit moderation on our annual sales price increases mostly reflects the effect of a progressively higher last year comparable base, a point that we invite you to understand and analyze well, and the result of moderate and progressive pricing adaptations to reflect real cost conditions. Second, despite this more modest top line contribution, we feel quite confident that our margins will remain safe at levels above 25% of sales, EBITDA of sales every quarter till the end of the year. This confidence on margins, this confidence on our levels of profitability basically reflects that our cost base, our manufacturing efficiency and all the many recent investments are giving real or are offering real results. Third, maybe more important, as a conclusion of the before, we today guide that our earnings could grow by more than 40% this year, 2023, reaching targeted levels above EUR 7 per share. This number, EUR 7 per share EPS for the full year 2023, intends to give you a guidance on how strong we see our operational profits this year. Fourth and last, after a period, as Iñigo explained before, of evident cash consumption due to well anticipated extraordinary CapEx programs and some needs also extraordinary and non-recurrent of working capital, we for now expect to generate more than EUR 150 million of free cash flow for the full year 2023, something that would mean more than EUR 180 million for the remaining three quarters of the year. This particular concentration of cash will keep our leverage ratio or our financial position at quite strong levels, even if we complete the acquisition of the remaining stake in the Brazilian company. In summary, under our view, we are today delivering a guidance for the year that includes what we consider useful for you to understand our real conditions. A sustained and sustainable solid core operating performance, forecasting levels of margins not far from our historical record levels. A full year guide on sales that take what we consider an appropriate prudence on underlying demand conditions. A proof that this won't change our expectations for strong earnings growth this year, including operating profits. A detailed perspective to a more normalized cash generation from now that will be full-year free cash flow this year will be a first reference or a starting point of our structural cash profile for the years ahead. Finally, before the Q&A, please let me end with some remarks on what has been a quite dynamic recent corporate activity. As you are aware of since last January, our subsidiary in the U.K., Encirc, owns the beverage logistic filling facilities and infrastructures in Bristol, known as The Park. The business purchased further improves the range of services we provide in the U.K. More important, creates demand and captures sales. There is a lot of strategic sense for us behind this small transaction. Moreover, culturally, probably more transformational for us. In early February this year, Vidrala announced the acquisition of a minority stake in the Brazilian company, Vidroporto, a very well known for us competitive, highly competitive Brazilian manufacturer of glass containers. This was a step nothing but remarkably represents for us a very deliberate strategic development. Whatever is the timing for now for the completion of this acquisition, please consider that this movement creates a driver for future growth for Vidrala in regions that will offer interesting opportunities in the long term. Thank you. Okay, this completes our exposition. We now give way to the Q&A session. Ladies and gentlemen, the Q&A session starts now. Questions by phone will be answered first. If you wish to ask a question, please dial star one one on your telephone keypad. The first question comes from Francisco Ruiz from BNP Paribas Exane. Please go ahead, sir. Hello. Do you hear me? Yes. Hello. Good morning, Raúl and Iñigo. I have some questions. Some quick ones. First one if you could give us the average price of your energy cost in the guidance for the year. Also an update on the Vidroporto remaining acquisition, if you could give us some more detail. The third question is, given the current environment on some doubts on price increases or on price evolution for next year and also some weakness on volumes, not only on you, but on the whole industry, have you seen any may pushback on the new projects, on new capacity, that are coming in the U.K. or Belgium in the coming years? Last but not least is on the debt side. If you could give us more detail about what's the level of CapEx in this quarter and the working capital, how do you expect the stocks to evolve in the coming quarters? Looking at your free cash flow assumption, I mean, this EUR 150 million for the rest of the year taking into account that has been negative in the quarter, it looks quite high level of 0.8x then net debt for EBITDA. Are you conservative on that, or I'm making any wrong calculation here? Thank you. Well, thank you. Thank you, Paco. Well, first point, regarding our energy costs, please let us remind that we are hedged this year, 2023, 65% of our total energy, natural gas and electricity. The percentage hasn't changed since our last conference call. We feel more or less comfortable with the prices that are fixed in this hedging level, despite hedging is this year, economically useless, okay? What that means, that means that we are considering our energy prices at approximately 10%-15% above our current market prices. Okay? More important, please let me remark, because time is passing, that for 2024, our hedging level is deliberately low, less than 25% so far. That means that we are probably gaining some competitive advantage as long as we are capturing most of the recent energy drop looking at this year, looking at 2024, okay. Second point, your question was regarding Brazil, Vidroporto. Well, let me extend a little bit my exposition on this point because I do consider very relevant and this is, okay, we already given a lot of time to this, to this process. Okay. We know well Vidroporto since years ago. We have been providing them technical assistance. Under my view, our destiny is to be partners. The assets of Vidroporto, the two factories are what we like, very well invested. Vidroporto is by far the most competitive player in Brazil, and we can see, we can confirm that all stakeholders, without any exception, around Vidroporto like us as future owners. Shareholders, management staff, customers, banks, administration, they are probably giving us our credit to our business integrity and our long-term industry intentions and our more or less a solid industrial track record in other previous acquisitions. I do consider that Vidroporto needs us industrially and financially. The majority shareholder that represents the founder family and all the great industrial legacy created by them has expressed formally its desire to sell us, and we do have an agreement with them. We won't materialize this agreement till some legal limitations that block the sales of this majority stake are fully solved. This is not a problem for us, and we can't control this timing. We transparently want, and we will take full control of Vidroporto, but we feel comfortable where we are today, and we won't accelerate events that we can't control. This will take the needed time. Let's be please patient, let's remind that even with a minority stake, we are creating value for Vidrala. Please let me invite you to consider that this is only the beginning of the platform we are building in South America for future growth. This is relevant for a long-term industrial company like us, okay? These months of wait will, in my opinion, soon be forgotten or diluted in our long-term history. Third point, capacity additions. Well, it's true that the last three years the industry has been determined, maybe excessively determined by a deficit of supply, a scarcity of glass and some supply chain disruptions, as in many other industries. It's true, and this is great to see that the glass demand, particularly in Europe and the U.K. over these periods, particularly after the pandemic, has been performing, in some cases, surprisingly positive. Okay. The conclusion behind this is that glass has a brighter future than ever, okay? This is good. As a result of this, a number of players in the industry, and we are not an exception, we have been trying to expand capacity and projects to expand capacity in this capital intensive industry takes time, okay? We still consider that there is a deficit between supply and demand. Obviously, demand conditions, mostly macroeconomic conditions could be changing, and we need to monitor this very carefully. Vidrala will monitor carefully, underlying real demand conditions frequently or periodically to adapt our inventories, our utilization rates, and more our expansionary ambitions with all needed prudence. I hope that the rest of the industry do the same, okay? We don't know. So far, we still haven't received any news about the closures or cancellations of any particular project. Please consider that most of the projects that are on track or have been announced are projects that won't affect us significantly, okay? We are not a pan-European player. We are the leaders in Southern Europe, we are the leaders in the U.K., and we do have a level of market share, control of the market and competitiveness that should give us some level of protection, even if all these projects to add capacity takes place in a future of maybe weaker demand conditions, okay? Third point, CapEx. Iñigo, please. Okay, Paco. Just to clarify on the working capital of this first quarter, you know that this first quarter is not the strongest in terms of free cash flow generation, mainly because we usually have the payment of the interim dividend. This is something around EUR 30 million this year. On top of that, this year we have special item which is around EUR 90 million related to M&A transactions. Okay. On top of that, what we see is a CapEx figure for this quarter, around EUR 35 million. Mainly the poor free cash flow generation is explained by a EUR 90 million negative effect in terms of working capital, okay? Explained by both an increase of stocks, both versus the previous year, but also versus 2022 year end. You know that we were very tight, so this is somehow something needed. Second of all, still the effect of additional round of price increases. Just wanted to give you a picture for the full year. We expect CapEx to be something in the range of EUR 150 million for the full year. Again, working capital should progressively normalize, especially in the second half of 2023. Let's say may still be cash outflow, but it should be closer to more historical levels, something in the range of 1% or 2% of sales. This means that in terms of leverage ratio, we could be, as we are guiding, below the 0.8x the EBITDA. Many thanks. Very clear. Thank you very much. Ladies and gentlemen, let me remind you again, if you have any question or comments, please press star one one on your telephone keypad to enter a queue. Thank you. The next question comes from Iñigo Egusquiza from Kepler Cheuvreux. Please go ahead. hola, Raúl and Iñigo, you hear me? Perfectly well. Okay. Thanks for taking my question. Just, I would say, a follow-up on Paco questions because, I mean, most of my questions have been already answered in this first, in this first question from Paco. Just a follow-up on the volumes. You have given Iñigo the breakdown on the top line for Q1, and if I understood well, volumes are falling 3%. If you can give us some more details. In terms of these negative volumes by markets and by categories of products, or how can you explain this - 3%? Some other players were also publishing weak volumes in Q1, but just if you can share with us your explanation. On the same topic on volumes, Raúl, on your guidance for the top line that you were mentioning, this solid or sustained double-digit revenues with this pricing moderation quarter after quarter. If you can give us what can we expect in terms of volumes for the full year 2023? Thank you. Thanks, Iñigo. Just very quick on the volume performance for the first quarter in 2023. We see volumes, let's say in our two biggest divisions, business units. In continental Europe, volumes are down -6% approximately, including both Italy and the rest of Iberia. In Italy, the decline is even higher, okay. You know that we have a small business on that division that is okay more seasonal and especially dependent on small number of big customers. We have seen some customer order deferrals in first quarter, but okay they should normalize throughout the year, so we are not especially worried with the Italian case. Probably more relevant, we'd like to see the results improvement in Italy since our investment plan and commercial reposition. Okay. Volumes in the U.K. are growing in the first quarter by 3%. Okay. Let me add that, by segments, situation is more or less aligned, the only point to mention is that we are seeing somewhat weaker those segments that are more cyclical. For example, when we compare beer to wine, okay? Nothing yet, particularly relevant, okay? The first explanation of our weak volumes in the first quarter is please do always consider that the first quarter is not particularly illustrative for us from a natural seasonality point of view. We need to understand that our sales volumes performance since the last year is still determined by our tight inventory levels. While it is obviously very evident from our competitors, from customers, from macro indicators that glass demand in our regions of activity during the first quarter is down. Okay? Probably down, maybe around 5% to the prior year. This is maybe reflecting some unavoidable impact of economic slowdown and maybe also some normalization or restocking after a very good and very high comparable levels last year and even the year before. Okay. Having said that, the second quarter so far, to give you some confidence on our guidance for the full year, the second quarter so far evolves as suspected, basically flat. Our customers today, now that we are to enter into the peak season of sales, still keep on insisting us to secure supply of glass. Glass demand remains under a solid momentum compared to other materials. We are particularly well prepared, better than a year ago, to serve our customers and capture any demand conditions. Okay? All in, as a conclusion, we still predict flat volumes for the full year 2023. Okay. In any case, let me remind you that we didn't depend on volumes growth to deliver on our margins and profit targets. Okay. That's the reason why we do feel confident in terms of EPS and in terms of margins. Maybe I should add that the view on the demand side, on the macroeconomic conditions will be now put on 2024 and beyond, this is probably another story we will discuss surely in next calls, then probably our business will be maybe different or particularly strongly, yeah, stronger positioned, diversified and competitive. Okay. Gracias. Thank you very much. There are no further questions by phone. I return the floor to Mr. Gómez and Mr. Mendieta. Okay. Just taking a look at the webcast, there are some additional questions. Some of them have been already answered. Just taking the ones that are still pending. Okay? First of all, some clarification on financial result or results below EBIT in the first quarter of 2023. For you to understand, the contribution of Vidroporto, the participation that has been accounted through the equity method in this first quarter is EUR 1.8 million. This means that financial result, excluding this impact, is at - EUR 2.2 million. Okay. Just to clarify that to you. The next we are asked, during 2022, we mentioned that some of our contracts had price adjustment formulas. Given the current lower energy prices, will you need to give back some of the price hikes you implemented through paths? Yeah. Let me add with regards to our price increases annual variations so far for the remainder of the year, please understand the comparable basis. Okay. In 2022, you remember that we were forced to implement different consecutive price increases to adapt our prices to abnormal cost inflationary pressures. That means that our prices in 2022 have started to grow by around 10% and grew by more than 30% for the last three quarters of the year 2022. Should prices remain where they are today, our annual variation will mathematically moderate to less than 15% for the remainder of the year, okay? This is only the base effect. It's that simple and won't affect profitability. Please understand this comparable base effect. Second, as Iñigo said, and as you probably remember, 40% of our sales are already comprised by long-term supplier agreements, where prices are dictated by automatic price adjustment formulas that very efficiently, we like this, very efficiently help us secure our margins and protect our margins, okay? This portion of our sales will progressively, as a result of this, reflect some price adaptations if cost relax, not affecting our margins in value or in percentage. Third, we assert today that should our external underlying cost really relax on a sustained basis, far beyond the energy factor, and you can believe us, there is still a lot of inflation across our business, in some cases consolidated inflation in many factors from raw materials to labor. Should that happens, we will be fair with our customers, we will be fair with the market, and we will accept some progressive price adaptations that, again, won't affect our margins and will capture and secure some positive price to cost spreads. Thanks. Now going into the LatAm debate, we are asked, you clearly have ambitions to build a presence in LatAm. Is this conditional on securing a foothold in Brazil first and then considering other countries, or can you enter other countries before Brazil is secured? Thank you. Well, it's a, it's a good question. Well, listen, Vidrala, you need to understand this is still from a strategy point of view, a quite a conservative company, okay. The decisions we are taking are the result of deliberate, conscious, in deep internal deliberations. Brazil is a big country, South America is a big region, full of opportunities, but with not many glass players active in this region, opportunities are few. The opportunity, the main opportunity, the target, our desire is one, Vidroporto. We would like to first complete the acquisition of Vidroporto. This period of wait is something that is becoming very useful for us because we are learning and learning more about what that means for Vidrala entering into a business in Brazil or in South America. I really think that this is becoming quite an illustrative, interesting, and strategically useful period. The answer is no. We will first complete Vidroporto. We will understand how we can grow Vidroporto and help our big customers deliver the ambitious expansionary projects in Brazil before thinking in another steps. Obviously, looking at the future, as I said before, we all should be aware that we are nothing but opening a door for future growth. Okay. The next question again says you mentioned that Vidroporto is your platform to grow in LatAm. From now on, will LatAm be your main growth area? If this is the case, will you be able to achieve equal or higher return levels adjusted for FX risk than in Europe? Beyond Brazil, will you consider other countries in LatAm? I think that this has already been answered. The first questions. Yeah. Thank you. Well, if you take a look at the numbers of our competitors, luckily this is very transparent because most of our public competitors are quite active in South America, and particularly in Brazil. You can see that Brazil is a growing market for the glass packaging industry. is a market, a region of focus for expansionary projects for big beverage companies, particularly in the beer segment. That means that Brazil is from operational point of view, is a country that is structurally more profitable than other more mature markets, like the European or the U.K. markets, okay? in terms of return on capital employed, basically the situation is aligned with our situation in Europe, in our traditional business and with our targets, okay? Brazil is... needs to be more profitable in terms of margins. Something that will help expand margins of Vidrala is if we complete this acquisition. Brazil is a country where the cost of capital is higher, where we need to invest more to capture growth that is not happening in the mature European markets. That's the reason to sustain these higher on average levels of profitability, okay. Thanks. We have now answered all the questions received via webcast. Once again, thank you all for the time that you dedicate to us, and just remind you that we remain at your complete disposal for any further questions that may arise. Thank you very much. Thank you very much. Please keep on consuming on glass. Good for you. Thank you. Ladies and gentlemen, thank you for your participation. You may now disconnect.