Good morning. Welcome to Virši Investor Webinar. As always, we will start with the company's presentation, followed by a live Q&A session. We're looking forward to receiving your questions. Please submit them through the Q&A box that you see beneath the presentation. This session is being recorded and will be available for rewatch shortly after the call. Let me now introduce you to our hosts, the Virši Chairman of the Management Board and the CEO, Jānis Vība, and Management Board member and CFO, Vita Čirjevska. Jānis, Vita, please continue. Thank you, Ieva. Hello to all investors and everybody who is interested in our company's development. We had quite a, let's say, interesting and full of events year 2024. It was also the year of record high investment amount, where we invested around EUR 23 million. A lot of things to talk about today. We will kick off right away together with Vita. I guess we will start with the usual, let's say, macro slide. Since we are operating in fuel, natural gas, and electricity markets, these are the areas where we are also looking at what is happening. On the fuel side, in terms of macro level, we saw that in year 2024, oil prices were around $70-$90 per barrel, which is actually not super significant fluctuations if you compare it with previous months. The trend was that this, let's say, peak in oil prices was usually at the point when there were some tensions in the Middle East, because the Middle East is obviously a very important area in terms of producing oil and also in terms of transporting oil. When these tensions were, let's say, not so big, then obviously the oil price was going down. Also important to remind that OPEC+ countries are still expanding those oil production cuts, at least until the end of 2024. We will see how it goes in 2025. Of course, the biggest event in world politics was Donald Trump's election in the USA, which obviously is very interesting what will happen next, because nobody knows. The policy is very unpredictable, but what we might guess is that if these tariffs and, let's say, war on trade continues to escalate, it will lead to a higher inflation rate in countries affected. Also, very likely that this economic development will be slower than it would be without tariffs. From that perspective, oil prices might actually continue to be low or maybe even lower. On the other hand, we, of course, have to remember about sanction policy. There are some, let's say, discussions about putting additional sanctions on Venezuela and Iran, which are both quite big oil producers. Depending on where we go with sanctions, of course, the Russian sanctions also is an open, let's say, question what will happen next. If the sanctions are, let's say, bigger than currently, this will again give a higher impact on oil prices. We will see which of those effects will take over. On natural gas, relatively, I would say, calm year, at least in the H1 of 2024, the prices of natural gas were actually already in the H1 of the year lower than previous years, and it was around the same level as in 2021. This was primarily driven, of course, because Europe had stocked up storage levels, and also the demand for natural gas was not very strong. Actually, something changed towards the end of the year. I guess we remember that there was a suspension of natural gas transit through Ukraine, which of course limited this supply of natural gas in the market. Also, together with the relatively cold winter in Europe, this had some push towards higher prices for natural gas. We saw that actually towards the end of the year, the prices reached almost already EUR 50 per Megawatt, which was actually quite a big jump versus maybe previous months. On electricity, of course, I guess we remember as well, but just reminds that in September, EstLink 2 cable resumed operations. The cable, of course, connecting Finland and Estonia, and which had a good and, let's say, stabilizing effect on electricity prices in our region. With regards to Latvia, maybe more specific is that our solar park capacity is now doubled in 2024 versus 2023, but still this solar panel capacity level is still quite far away from the Estonian and Estonian markets. Still we need some catch-up to do. That is a very quick run through macro level picture. Now I guess just a couple of words also on our strategic goals. Previously we had communicated strategic goals up until 2026, but this year, actually late last year, we have revised our strategic plan and also put some numbers how we see the company developing until 2027. There are two, I guess, items which I would like to stress. One is that we are putting our target of 90 stations, which we previously expected to launch in 2026. Now this target is put on 2027. I will explain the reasons why. Also in terms of financials, which is EBITDA and net profit numbers, we are basically still reaching the targets which we communicated before, but the thing is that we are putting them also in 2027 rather than 2026. This one-year delay is mostly because we see that this picture in economy and geopolicy around the globe has changed quite drastically versus maybe a couple of years ago when we created the initial long-term plan. We see that, of course, this economic development is being much lower than we hoped it will be. Just remind, in Latvia, we had negative GDP growth in 2024, which obviously is making us a bit more careful about making huge investments. We are still doing investments, but maybe at a bit lower pace and at a bit longer period. All in all, still we are holding that our assumptions that 2027 will be very strong. We see that these financials should be increased quite significantly, mostly because we believe that those investments which we have done in 2024 and also some years before, those will generate return in coming years, because all those investments, usually, at least in our business, they need to have some time to start generating investments at, let's say, good return levels. This is on strategic goals, but we are also having goals on ESG, and that is where Vita will jump in. About the sustainability and ESG, in year 2024, we actually had a major shift in our general understanding and general target setting through all the organization. We see that this has been like an explanatory task to go through all the areas and understand what can we do better and how can we do better and how to align these targets all along the organization. We have been setting our 15 key performance indicators for 2025. We have assessed the impact also in the longer term until 2030, but currently, due to the legislation, we go step by step, and the first year for 2025 is set internally. We have set these goals in three areas: in ESG, environment, or our own value, creating the future today, is about the emissions generated in our own operations and also all through our trade activity, and also the waste management. In the social perspective, where we see three directions: employees, clients, and suppliers. Also in governance, where we see our business relationship, governance internally, and also creating this awareness and training of our employees to, let's say, shift the understanding of sustainable business internally. This has been a big road to these targets, because initially we were setting our targets on efficiency, but more like just increasing efficiency in all areas as much as you can in a way you can. We had a period of two to three years where we had this sustainability as a goal, but also increasing sustainability. Actually, all the things done under these activities were good in a sense and were also towards the improvement, but this has been aligning our goals through the organization and having one understanding on what we can do and what we need to do to make Virši more sustainable. Okay, so let's move then each goal step by step. Let's start with station network. We are actually very happy and proud about 2024, because it was really a powerful year as we launched 10 trading sites. In our business, 10 trading sites is actually a very big number. Very rarely somebody can do like that, something in one year. We have done it, and we did it basically. We are actually happy about that work, which was devoted to, let's say, launching these projects and took several years before in terms of documentation and everything. This has finally kind of resulted in real, let's say, real stations, which we can see in the roads. In terms of locations, we have launched eight fuel stations in Latvia. One is a shop-only trading place in Latvia, and one is also a fuel station outside Latvia, which is located in Lithuania. Quite, let's say, across geography, quite dispersed, and also in terms of business, you have shop and also shops with fuel. Quite different options. Yeah, we are very happy about this, because obviously this required quite a big effort and quite a big investment amount, and we are confident that this will bring those returns in coming years. To extend the shop network and also the fuel stations, we need the employees, and this has been quite a challenging year also towards building up our value as an employer. This has been challenging in the past years due to the macro situation and the payroll models and challenges in the market. This year we made our own challenge. We made the challenge of new teams, new cities to open up in Latvia, also a new country, Lithuania. We have increased the average count of employees by 15%. This has been also challenging to apply all the processes, values, and align everybody on the same level as we have it all through our stations. We see that we have found the right people in the right places, and we are happy about them. In the last year, we also received CV-Online top employer awards in a level that we did not expect so fast to reach, as our top target was set to top 10 in 2026, now in 2027. Actually, we reached it already in the top for the year 2023, and we reached place four in the main category, and we are top selection as the first thing to come in mind as an employer in Latvia. Also, very high level in the trading sector, the second place and first place in the Zemgale region, as we are mainly represented in Latvia. This Latvian top is our main benchmark in our values as an employer. I think it has been a great, great year for our HR and everybody involved, and also thanks to our employees who have sustained our fast growth in the past year. Okay. The next strategic goal is to be a leading player on alternative fuels. Here again, I will just remind that we are having two, let's say, main alternative fuel products. The first one is CNG, which is compressed natural gas, which is mostly devoted to heavy trucks. On the other hand, we have electrical points, charging points, which is obviously mostly devoted to the light transport segment. In both of these segments, we are happy that we are seeing quite significant growth. We are seeing that both of these segments are growing quite good, and also the margins are quite okay. That is why we obviously will continue to develop both of these fields and to continue to keep our number one position in those fields in the Latvian market. But one thing I wanted to maybe talk a bit more today is this biomethane plant, which we have talked about in some of the media in Latvia. Just to be on the same page, currently we are already completing the field work, and the biomethane plant is started to being kind of developed. We are, as you can see in those pictures, that's step one. Next steps will be to install the equipment and everything. We are expecting that by Q1 2026, we should be able to finalize this project and start already producing biomethane. Again, just to remind you, biomethane is in a way like a green or friendly for nature natural gas, which is being produced from different kinds of waste. In Latvia, there is a small, let's say, town located in the northern part of Latvia where we are building this plant. There are quite a big amount of agricultural raw materials which we can use for this plant. You have to transport these materials to a biogas station. You are basically making this biogas cleaner up until biomethane level. Once you have biomethane, you are putting it into the grid. Throughout this grid, you can sell this biomethane to your buyers. We already have concluded agreements with our buyers for this product. We now have to move on and basically launch this plant by Q1 2026. That is on biomethane. Just to remind that another goal which we have is business diversification. How do we measure business diversification? We are measuring what percentage of our gross profit is coming from non-fuel segments. We see that we have made some good progress over the past years in this field. For example, we see that our shop or convenience store segment was making around 39% of gross profit back in 2022. In 2024, this is already close to 50%, which is quite a material increase. We are happy about that because convenience stores are obviously having higher margins. You also do not have credit risk. Especially we are happy about this because it is not so that fuel is not growing. Fuel is also growing, but simply convenience stores are growing much faster. Currently, it seems that we are in line with fulfilling this goal in the coming years. The next goal, EBITDA, as Jānis already presented, we have experienced growth in gross profits area, and we will also touch upon each big segment of our gross profits in later slides of this presentation. The gross profits have gone up by 9.3% or EUR 3.5 million and have generated a big value for Virši. At the same time as we have discussed already in the previous slides, this has been a period of big investments. In respect to EBITDA, the main effect from these investments or opening up new markets comes from the payroll expenses, where cost of sales has gone up and administration has gone up. In cost of sales, where the effect is the main, around 85% of the costs in growth in this area comes from payroll. We have attracted 160 new employees for Virši over this year. Also, as the fuel station network opening works, we firstly onboard the people in our existing teams. We train them for several months, and when the station is ready, we build these teams in the new stations. That means costs before actual profits. This has been the year of investments and expansions and new projects as well. There have been effects from the costs. Year 2024, in respect to 2023, in EBITDA, respect has been steadily, and there has been no big growth, but we have sustained the same level over this year. We are happy about the result, and we see that this base or this year has been a base for future developments. To the net profits. In respect to the net profits, we see that almost zero effect from the EBITDA, but also the other effects for the net profits are related to this expansion. In this past year, we have built up the new stations and invested in new projects in total of around EUR 23.3 million in investment cash flow. Part of that comes from the lending from the banks, where lending from banks have increased by 30%. That means this lending base has increased. Also, we experienced Euribor effects, where in the end of 2023, Euribor actually reached its peak over the past years. This effect from the Euribor, when you adjust the agreement rates, has been, let's say, the highest over 2024. Each and every year, we still managed to get better rates on the fixed rates on our loans. We see that in the next coming years, according to the forecasts, these expenses in the rate level should become less. We also see that the lending will be less over the next years as the big investment year has been over 2024. We see that this cost has been there, but we see that such big shifts over the next year should not be there. Also, the depreciation amortization, there has been a shift up because the fixed asset base has also gone up significantly due to the new stations, new locations, and new investment projects. This derives us to the net profits where they are shifting down from the past year. Also, over the past years, we saw the effect from the financial instruments valuation due to the electricity price turbulences, where it went up in 2022 and then shifted down in 2023. In this year, we see that this electricity price has been normalized, and we see that right now the value of the financial instruments has reached its stable level. Here, in respect to 2023, the cost has decreased. In total, our net profits have decreased by EUR 270,000. In percentage terms and in the perspective terms, we still see that the result is good, and the result is a good base for the future net profits growth. Yep. I guess now we will quickly go through each of those biggest business segments. Let's start with fuel. What has happened in fuel is that, as you can see in the right-hand side, the market in Latvia, in terms of liters sold in retail in 2024, has been growing by 1.2%. We have managed to grow by 8.8%. It obviously indicates that we have quite a strong growth despite the fact that the market is quite stagnant, which also means that we are increasing our market share. Obviously, we are happy about that because of new customers coming and also staying with us. In terms of other things which we are, let's say, happy about is our mobile application because when we launched it a year and a half ago, we saw that there is maybe quite a small percentage of customers using it initially. Now this percentage is already much, much bigger, and we are happy because obviously customers can pay by this app. If they are in hurry, they are not going to the store, and also our employees are, let's say, less overloaded. Two things about Latvia in general. We see that 2025 is currently the first year since a very long period of time when Latvia is more competitive on excise tax for diesel compared to Lithuania. We see that Lithuanian, let's say, business customers are fueling in Latvia, and also our Latvian transit customers, which previously fueled in Lithuania, are coming to Latvia and doing it in Latvia. The second thing is just to remind that we are approaching this emission trading system in year 2027, which will basically define that all fuel traders will have to buy quotas for each of the CO2 kind of put into the market. The current estimate is that based on current prices, the increase in liters sold could reach at least EUR 0.15 per liter when we are into this system. Basically, it means that fossil fuel products will most likely become not cheaper, but more expensive in the future, while renewable or alternative fuel types could actually become more competitive versus fossil fuels. Yeah. In respect to convenience stores, which has now been our biggest business from a gross profit perspective and also employee perspective, this has been quite a challenging year. As I also mentioned in the HR blog, this has been opening up the new markets. That means challenges in choosing the products and services we offer. This means challenges in the supplier selection and the logistics chains. We had done major work and also set up everything to be up and running. For the shop, this has been also a turning point in this year, opening up a new shop in Latvia and also watching our customers, what are they interested in or not if there is no fuel station around. This has been a big year also for the shops. In the end, we have still managed to grow our results, and we are growing much faster than the market, as you see on our also Nielsen data for the fuel stations in Latvia. With the shops, the tendency is that we still keep up on a bigger increase. Over the past year, we have gone up by 18.6%, while the shop together with us only by 8.8%. In respect of the shop, we have also been able to put more interest on the loyalty system, where we have reworked that or shaped up at the end of the past year. We have created new offerings, and we have understood which are the main products of interest and how to attract the customers more to get this better break-even on the supply-demand side for the shops. We believe to have the effect already in 2025. The last of the segments which we wanted to touch on is energy, or in other words, electricity sale. This segment, I guess a key point to understand is that we are still a relatively new player in the market since we started this segment, I guess, a couple of years ago. We see very positive and strong dynamics in terms of the electricity volume, which we are buying from producers and also selling to our customers, as you can see in the graph. We are also happy that in 2024 alone, we have managed to double our number of business customers. Also, in only slightly more than one year's time, we have managed to become the fourth largest electricity supplier for households, which in our mind is very good. We will obviously continue to expand this segment because it's very, let's say, naturally it goes together with our other products, which we are offering to our customers. We arrived to our key financial indicators or the last section of our presentation. As we went through the presentation, we saw this has arrived to the general understanding that this year has been a year of investments, a year of developments, and a year of opening up new directions in our portfolio. We see that the main business is still growing at a good pace, but we need to have these expenses to shift our operations at a new level. In this year, return on equity is 6.7%, which comes from the equity side, from the net profit side effect. As we discussed before, if we see the equity assets proportions to 48.9%, and our net debt EBITDA ratio is 2.3. This year, it has been shifting up because we had the lending year, the investments year, and we saw that EBITDA was sustained at the same level as in 2023. We believe that our financial situation, our financial results at this stage is in good shape. We have done a lot of homework this year, and we are waiting for the results on the next years to come. Exactly. I guess that's pretty much from us on the formal side about the presentation. Thank you for your attention, but let's go to the questions if there are any. There indeed are some questions received. Participants, if you'd like to add yours, please use the Q&A box. We'll start with the first one. What is the planned capacity for biogas plant? Yeah, thank you for the question. The answer is that capacity is 5.5 Megawatts, and we expect that we will be able to produce up to 60,000 Megawatt- hours per year. Thank you. Coming back to the slide that you showed in regards to EBITDA, in your EBITDA bridge from 2023- 2024, you showed increased gross profit, but then separately showed a negative impact of increasing cost of sales. Surely, gross profit is after cost of sales. What was the separate item of cost of sales? Yeah. This separate item, in a better wording in English, would be selling costs. These are sales costs or sales team. The gross profit is obviously sales deducting cost of goods sold. This is purely selling costs. Which includes salaries for our sales employees. Salary employees, yeah. Thank you. Our next question. What financial instruments do you still have on the balance sheet? What is the current policy regarding the use of financial instruments? Okay. As we mentioned, over the past years, the financial instruments in our balance sheet are mainly pairs of the major effect is from the contracts in a period of the instruments contracted in 2021, but the use of these financial instruments is planned in 2023 - 2027. The top value or the main amount of the instruments units behind that was in 2023, and right now we are sort of spending them over the next years. We see that our policy will be to get the most from the situation or the offer we can have. There are no strict policies in respect to that. If we see that the past year's effects, there have been ups and downs in the financial instruments, but they are mainly related to electricity price dynamics that we could not affect on a global basis. Thank you. Continuing on the financials, adjusted ROE, return on equity has been declining. What are your expectations and targets for coming years? Yeah, it's true that its ROE has been declining slightly. I guess the main message here is that we are currently undergoing a very heavy investment phase. Obviously, when your investment is so, let's say, large, at least to our balance sheet, then of course, you're putting more equity in the company, but not yet receiving those, let's say, returns immediately because you have to have some time when stations are picking up the speed and start generating those returns. As indicated also in those strategic goals, we expect that this heavy investment will pick up the returns in this and next years. In order to obviously reach our financial targets for 2027, just to remind, we had more than EUR 20 million EBITDA planned for 2027. This will obviously also increase our ROE in coming years. We are in a way like currently at the bottom in terms of ROE. We are scaling up the business. Once they are kind of going and giving us return on those new stations, then definitely there should be ROE development, positive sign. Thank you. What is the plan for natural gas trading? Yeah, also a good question. We are already, we have started selling natural gas to our B2B customers since early 2025. That is the first step. We actually did the same also in our electricity. First was B2B, then B2C followed. We are now looking how the B2B portfolio will develop. Of course, it is possible. I am not able to say when and whether it will be 100% true, but it is possible that the next step will be also natural gas selling to households in the future. According to financial report data, energy gross margin has decreased by 85% to EUR 1.3 per Megawatt- hour. Do you see this margin remaining stable going forward? Ignitis data shows energy sales average gross margin being around EUR 3-4 per Megawatt- hour. I guess very complex to answer this question in short, but I guess a lot of factors. You have B2C segment, you have B2B, you have energy which are buying from households and selling into the market. It is very, I would say, complex to compare this EUR 1.3 versus EUR 3-4 versus Ignitis. I guess the honest answer would be that in case we are managing to increase our household portfolio as we plan to do, the margin is relatively bigger in this area. The weighted average margin hopefully should also increase in the future if we manage to execute our strategic plan for this segment as we have expected. That is, I guess, the answer, which is not very concrete, but also best which we can provide. Thank you. Are you able to provide additional information about the network expansion outside Latvia? How many stations are you planning to open? Would all of these be in Lithuania, or would you also consider further expansion to Estonia, for example? I can thank you. Basically, Estonia is currently not, I can honestly say, not in our list simply because we have quite big other projects which are demanding quite a big amount of capital, and we see that this return in other projects is quite okay. Estonia is not in this area of next projects. With regards to Lithuania, that's a bit more complex question because when we launched Lithuania operations, the assumption was that our B2B customers will continue to fill in Lithuania because always excise tax was lower in Lithuania than in Latvia. Now, actually, the situation has changed. In Latvia, excise tax is now for the first time in many years cheaper than in Lithuania. A lot of B2B customers are going to Latvia to fill, which of course makes us, let's say, our ambitions to invest significant amounts of capital in Lithuania expansion, let's say, less ambitious currently. We are not, let's say, so currently focusing in aggressively growing Lithuania simply because of those tax policy items. We are better now launching maybe capital in other projects where we see higher return. Thank you. One more question coming in. Could you elaborate on factors that will contribute to the net profit increase by 2.6 x in 2027, given that the filling station network is going to be expanded by 10%? Again, we try to kind of explain it that when you launch new stations, it's very often that you need some time when those stations are fully, let's say, operational and fully able to provide returns. It's very often that we see that in the first, maybe even second year, the station is still kind of picking up the speed, and the real result is coming in three years, third, maybe fourth year. Of course, there are some exceptions that also in the first year is already super good. Basically, because we have launched quite many stations in 2023, 2024, which are still kind of picking up the space, we see that this will generate us returns. You are basically having this scale effect because we don't see that we will need to grow in OpEx so much in the future because infrastructure, everything is in place. We just need to scale up our sales volumes in our network. Not only new stations, we are also seeing that we still can get more results also from existing stations. Thank you. Seems we have answered all the questions. We will be closing the call shortly. Jānis, Vita, over to you for the final remarks. Final remark from my side is simply one. Thank you for 2024 for being with us, and we are really excited to look for next year because I guess the growth will be quite strong in next year. Yeah. Thanks also to our team for sustaining our dynamics. Yes.