Good morning, everyone. My name is Patricia.

Do you hear now?

Yeah.

It's okay now?

Yes.

Okay. Let's start again.

Okay. Good morning, everyone.

My name is Patricia Gastelumendi, Chief Financial Officer of Ferreycorp. Welcome to our fourth-quarter and full-year 2025 earnings conference call.

Joining me on the call today is Mrs. Mariela García, our Chief Executive Officer, and Mrs.

Milagros Benavides, our new Investor Relations Manager. I am glad to introduce Milagros, who assumed the role at the beginning of this year and has been able to meet already some investors.

She has a strong track record at Ferreycorp, with more than 20 years of experience at our flagship company, Ferreyros, where she held key roles in the commercial, logistics, and finance departments. At this point, I would like to thank Ms.

Jimena de la Piedra for her years of dedication to investor activities, showing commitment and dedication to keep investors well-informed and to promote your participation in our activities. We are confident she will continue to bring value to our corporation in her new responsibilities within Ferreycorp.

Thank you, Jimena. Now, I will ask Milagros to continue with our agenda.

Please, Milagros.

Good morning, everyone. Thank you, Patricia and Mariela, for this opportunity.

I would also like to thank Jimena for her incredible work and committed to maintaining that standard of excellence in the years to come. It is a pleasure to meet you all, and I look forward to working closely with you from now on.

Please don't hesitate to contact me for any inquiries and need you may have as a valued investor and shareholders of our company. We will begin the analysis of the company with the results, an overview of the quarter and also full-year figures.

At the end of our prepared remarks, we will open a Q&A session. At that point, if you wish to ask a question, please use the chat box located below your screen or raise your hand and we will announce you.

In the meantime, we kindly ask all participants to keep their microphones off. Please note that this call may include certain forward-looking statements.

These statements relate to expectations, belief, projections, and other matters are not historical facts and are, therefore, subject to risk and uncertainties that may affect future results. With that, I would now like to turn the call over Mariela García.

Please, Mariela, go ahead.

Thank you, Milagros. Good morning, everyone.

As we do in our conference calls, we will review a brief presentation, which is available in our website, to support the discussion of our company's results and key highlights for the fourth quarter as well as the full-year results for 2025, according to the financial statements that were published yesterday. Before explaining the results of the quarter, I would like to highlight some excellent news regarding our performance.

2025 was a standout year for our stock, characterized by robust growth and exceptional returns. Our stock price appreciated by 33%, closing at 3.9, and when adding the dividend yield of 7.95%, total shareholder return reached an impressive 46.8%.

These results validated our strategic direction and the continued confidence of our investors. I am also pleased to point out an important event that took place after our last call in November.

At the meeting held on November 26 and following the guidelines of our dividend policy, the board of directors approved an advanced cash dividend of 100 million soles. This payment correspond to the 2025 results and was distributed on January this year.

Thus, we paid two advanced cash dividends for the results of 2025. Now please, let's go to slide 4.

As an introduction, I would like to highlight that throughout this quarter, Ferreycorp delivered strong results and maintained a robust financial position, as evidenced by revenues of 1.9 billion, an operating profit of 131 million, an ROIC of 8.9%, and an ROE of 16.2%. These results were primarily driven by increased sales in business lines of Caterpillar construction and infrastructure machinery, as well as the sale of CAT and allied equipment for underground mining.

This performance was further supported by enhanced efficiencies in our SG&A expenses. Now let's go to slide 5.

The political landscape by the end of the year was defined by the commencement of the 2026 electoral race. Elections will happen on April 12, with a most probable second round some weeks after that.

The campaign now shows an unprecedented pool of more than 30 registered presidential candidates, an equivalent list for Congress that this time will have two chambers, restating the Senate after several years, who will have more powers than before. Even being only 60 days apart from the election, is too early to know who may win.

However, we still believe that the risk of having significant change in the economic system and institutions are low. Peru's technical institution has successfully shielded the operational stability of major corporations from political volatility, ensuring a stable governance despite ministerial rotations and legislative pressures.

In this context, the country continues to demonstrate a resilient stance, with a GDP growth reaching 3.3% in 2025. This growth is underpinned by a stable monetary policy environment, as evidenced by inflation declining to 1.5%.

This economic momentum is largely fueled by a robust 9.8% surge in private investment and a significant 6.8 expansion in the construction sector, providing a solid operational buffer for the industry. Please now turn to slide 7 of our earnings presentation to discuss financial highlights as of December 2024 25 and the fourth quarter.

As of December, consolidated sales amounted to 7.8 billion soles, representing a 3% year-over-year increase. When measured in US dollars, total sales reached $2.2 billion, an 8% percent growth compared to the $2 billion recorded in 2024.

During the fourth quarter, sales reached 1.95 billion soles, a level consistent with same period last year. In this period, Caterpillar equipment, including allied brands, underground mining, and construction segments, exhibited robust growth of 73% and 17%, respectively.

Parts and services experienced a marginal decline of 4% compared to the same period in 2024. Furthermore, when measured in US dollars, the primary currency of our operations, revenues reached $569 million, representing an 8% increase over the same quarter in 2024.

The sales mix for fourth quarter '25 was led by spare parts and services with 52%, followed by prime products with 36%, rental and used equipment at 5%, and other business lines with 7%. Regarding gross margin for the fourth quarter, it recorded 20.5%, much lesser than the 24.9% from last year.

However, as we always explain, we need to consider the adjusted margin, which was 23.5%, closer to the adjusted 24.8% from last year. When considering full-year numbers, as of December, adjusted gross margin stood at 24.7%, below the 26% adjusted gross margin last year.

This performance was influenced by the sales mix, where higher volume of equipment deliveries was further consolidated our market leadership within a highly competitive environment. As we explain, margins are distorted when significant revaluation or devaluation happen, therefore it's important to consider adjusted figures.

Our earning release reflects these adjusted figures. Now please, let's go to slide 9.

Regarding the adjusted operating profit as of December, after excluding the impact of foreign exchange fluctuations, profit stood at 762 million soles, representing a 10% decrease year-over-year. Consequently, the adjusted operating margin reached 9.8%, remaining below the 11.2% recorded in 2024, reflecting the lower gross margin explained before.

Our fourth-quarter adjusted operating profit amounted to 189 million soles. As of December, SG&A expenses totaled 1.18 billion soles, a 2% increase year-over-year, much lower than the increase in sales.

However, as a percentage of total sales, SG&A expenses represented 15.2%, a slight improvement over the 15.3% reported by the end of 2024. Furthermore, adjusted EBITDA as of December amounted to 1.07 billion, narrowing the decline to 5% compared to the previous year's adjusted EBITDA of 1.12 billion.

The adjusted EBITDA margin for that period was 13.7%, down from the 14.8% in 2024. Now I would like to turn the call over to Patricia Gastelumendi, our CFO, who also already greeted you, to discuss the financial results of this quarter.

Moving to net financial expenses, they amounted 86 million as of December, representing a 2% decrease year-over-year. This reduction was primarily driven by a lower average debt level compared to the previous year's peaks.

The average cost of debt improved to 4.79%, down from 5.08% in '24. This decline was largely attributed to a reduction in average short-term interest rates, which fell from 5.49% to 4.68%.

Conversely, the average medium-term interest rate increased from 4.49% to 4.92%, reflecting debt-restructuring activities conducted during the second half of year and into the fourth quarter. These strategic moves were part of a continuous evaluation of market conditions and diversified financing alternatives, aimed at containing the growth of financial expenses while positioning the company to capitalize on the expected downward trend in interest rates.

I will now move on to FX results as of December 2025. Now let's go to slide 13.

As we explained in our previous conference calls, the Peruvian sol experienced a significant appreciation in the first nine months of the year, which resulted in an FX gain of 120 million. During the fourth quarter, this trend continued.

Therefore, as of December, the full-year FX is an accumulate FX gain of 162 million, compared to an accumulate FX loss of 43 million in 2024. Great portion of the 162 million FX gain has already been offset by its impact in gross margin.

However, we estimate that as of December 2025, there is a remaining balance of FX gain of around 65 million soles that will be offset by impact in gross margin in the next few months. The pace of that offset will depend on the future evolution of exchange rates.

As we always explain, it is crucial to remember that these foreign-exchange gains or losses result in a purely accounting impact, because the inventory is registered in soles, but will be sold in dollars. The FX loss will be recovered in the upcoming months through the gross margin, and the opposite will happen when there is an FX gain.

Now let's move on to slide 14 to review the net profit during the fourth quarter 2025. Net profit during the fourth quarter reached 102 million, a 2% increase year-over-year.

This result was primarily driven by: 25% reduction in EBITDA, equivalent to 70 million; a 19% decrease in financial expenses, or 4 million; and a 10% increase in depreciation and amortization, totaling 7 million. These factors were partially offset by an FX gain of 68 million resulting from the appreciation of the sol during the quarter, compared to an FX loss of 27 million in the fourth quarter '24, and lower income taxes, which decreased 6%.

Consequently, accumulated net profit as of December 2025 reached 481 million. When excluding the foreign exchange impact, adjusted net profit stood at 463 million, representing a 9% decrease compared to the 511 million reported for the same period last year.

As previously noted, exchange rate trend was significantly different in the second year, in the two years that are compared. While the sol's revaluation across all four quarters 2025 positively impacted the bottom line, the adjusted results provide a different picture.

Although first-quarter net income remained higher than the previous year, this trend reversed during the second and third quarter due to operational factors previously discussed. Please let's go to slide 15 to review financial resources and cash generation.

Total debt as of December 2025 amounted to $637 million, slightly higher, 3%, than the $617 million reported last year. 54% is current debt, and 46% is long-term debt.

In the quarter under analysis, we structured a portion of debt, and an additional amount will be restructured during the first quarter 2026. We should point out that in fourth quarter of 2025, the company had a positive free cash flow of 235 million soles, driven by improved working capital management.

Leverage ratio, net debt to EBITDA, as of December, stood at 2.06. Additionally, the debt-equity ratio amounted to 1.59 times, way below our covenant limit of 3.5.

Now move to slide 16 to review the state of financial position main accounts. As of December 2025, total assets amounted to 6.8 billion soles, a similar level to that of 2024.

However, there were some variation among the main assets components. While inventory and accounts receivables declined by 20 and 126 million soles, respectively, fixed assets increased by 117 million in the year.

The increase of fixed assets mainly include 43 million related to infrastructure investment, 47 million in new machines and equipment, and also 253 million for the inclusion of more units into the rental fleet, which were partially offset by 140 million in depreciation. The cash conversion cycle improved from 158 to 154 days as of December '25.

This result was driven by inventory turnover days, which decreased from 154 to 151 days; collection days that declined from 52 to 45 days; and by payable days that decreased from 47 to 41 days. Regarding the asset turnover ratio as of December 2025, it was 1.14, a similar level as achieved by December 2024.

Now let's turn to slide 17 to discuss our CapEx. As previously mentioned when explaining the variation in main assets components, net investment in fixed assets as of December reached $102 million.

The main items were: $31 million in infrastructure; $17 million in machinery and equipment for workshops; $24 million net investment in rental fleet; $28 million in mining rental fleet investments. I will turn the call back to Mariela now for the closing remarks.

Thank you.

Thank you, Patricia. I would like to close my presentation with some final remarks.

During the fourth quarter and for the whole year, we continued to deliver robust results, demonstrating our knowledge and understanding of the markets we serve and our deep experience in our operating model. Even in a shy economic environment with low single-digit growth, our strong year-end position is the result of our deep integration with the most dynamic sectors and a world-class portfolio levered by the constant technological innovation of Caterpillar and our partner brands.

We recognize that our market is increasingly attractive to global competitors, creating a more competitive landscape. While this intensity means that margins may not always mirror the peaks seen in previous years, we are taking decisive action to ensure long-term stability.

As announced in our previous call, we are actively deploying efficiency strategies and cost-reduction plans to protect our bottom line, while our superior product support model continues to secure our market share and leadership. Throughout 2025, we successfully captured diverse market opportunities, from large-scale projects to medium-sized contractors, by leveraging digitalization and e-commerce to provide a seamless customer experience.

Now, we enter 2026 with a clear focus on results and an unwavering commitment to delivering value. This concludes our presentation for today.

Thank you for your time. Now, we will be glad to take any questions that you may have.

Thank you very much, Mariela. We are wondering if you have any questions.

I don't know if my phone is unmuted or not.

No, we hear you well, Cesar.

Okay. All right.

Hopefully, I didn't say anything in the interim. I always...

Never mind. Thank you very much for your presentation.

My question is: we have started or we had a very strong final quarter in terms of commodity prices in 2025, but this is non-stop as we go through 2026. My question to you, Mariela, is essentially how do you see the investment environment in Peru?

Obviously, you mentioned the elections and the implications for that, which possibly may be non-event. How should we think about investment in 2026 both for mining and also for infrastructure or other significant industries that you service?

I would say those are the most relevant. How should we see that?

How does that filter through your guidance into 2026, especially on the revenue side? Hopefully, some guidance on the unit side, hopefully if that can be segmented, and capital expenditures for 2026.

I also saw that there was an allocation out of those $102 million, I believe I saw $31 million in infrastructure spending. Is that related to your shops?

Is that related to the new equipment that you're selling, electrical vehicles? How should we also think about that?

I've asked a lot of questions, and I'm talking too much, maybe I'll have to repeat my questions later on, but...

No, no. I think I captured main three.

Thank you, Cesar, for your participation and always for your questions and active participation. I captured three main topics, no?

One is investment sentiment, what we can be expecting. Another one is a little bit like a guideline of next year growth.

Thirdly, investments that we're doing, our CapEx. I captured those three.

Investment sentiment, I will repeat a little bit what we have been saying the last calls, no? We still see this strong fundamental of projects that could happen.

There's an interesting list of mining projects that could happen and they can move forward. There's a couple of them which are not huge, but we are accompanying our customers in analyzing what can be their investment.

There's a lot of OpEx, no? What we are seeing, precisely because of this good pricing, is how to benefit from it right now and not wait for a greenfield.

What we have been seeing in the last year or a little bit more is a lot of brownfields, and we are still seeing that: mining companies putting into operation new areas of the sites, new areas of the mine. We're still seeing those, and companies that are continuing to grow.

On top of that, some new projects that could happen. Along with mining, we have infrastructure.

We don't see huge projects now. Even in the last days, we have seen some projects that have been turned down here locally in Lima, problems with the G2G that we hope that can be resolved, because G2G had a good outlook through 2029, no?

I hope that can be resolved. What we are seeing is a lot of regional activity, probably boosted by the fact that there was a regulation time ago where they receive more cash, more funding.

We're seeing a lot of regional medium-sized operations. That's what has been driving also growth in our prime product sales, no, of medium-sized equipment or even small-size equipment that we sell through one of our subsidiaries, Unimaq.

We're seeing a lot of activity spread out the country, and we expect that to continue. That's covering your first question on economic opportunities and investment sentiment.

Secondly, regarding our expectation for next year, with this environment that I just mentioned that we don't see any big greenfield or we don't see any large infrastructure, we're seeing more OpEx, brownfields, and more medium-sized regional investments, no? We are expecting a somewhat similar year regarding sales from what we saw this year.

Slow growth, very slow growth, just following, covering the markets, and getting all the opportunities that there are to repeat our volume that we have already shown. Going to the last portion of your question on CapEx, the $31 million in infrastructure investment is in our shops, in our warehouses, in our branches.

I would say that's more or less what we always do, between $20 to $30 million, to update our shops and branches. The new element is the rental fleet for mining, no?

That, as Patricia outlined in the explanation of the $100 million investment in 2025, 28, almost a third of that, went to mining rental fleet investments. We are seeing this new opportunity that started three years ago when we launched the 798 and we brought in 20 trucks to the country.

Some of them are still being rented, some of them then were sold. That opened a new opportunity, a new operating model, a new way of doing business with mining companies, that is renting equipment that we saw in the past in other countries, no?

Also when they use contractors. We are also providing this type of doing business, which is rental fleet.

That was 30 million for this year, and it could continue to grow in 2025. Serving our customers with trucks that could even open the space to do it with autonomy trucks.

We already have one autonomy fleet in Peru,

and

just as we did to launch the 798, also to continue to introduce the autonomy truck, we could also do it in a rental fleet basis. We do expect to continue increasing our rental business, not only in the construction equipment that we already were doing 30 years ago—we started with the rental business back in 1998—but also through the rental fleet for mining that started just a few years ago with the 798.

Thank you, Cesar.

Thank you. Just before one one final question, a small follow-up: what is your capital expenditures guideline for 2026?

Yeah. We are thinking around $130 million.

That $130 million again has a significant portion for this mining rental fleet that I was just explaining. It has also improvements in our shops.

You also mentioned, I think, with this new technologies, if we needed to invest in our capacity, no? We have been doing that some years ago already.

We created a second CRC in the southern part of Peru. Before, we only had one in Lima, the rebuild center.

Now we have a second one in Arequipa. We have also been including capabilities to handle the electric vehicles and the autonomy vehicles.

We are always updating. I wouldn't say there is a huge gap, because it's a constant effort.

In 2026, we are already including in our CapEx, again, 30 million or so on for rental fleet, and another similar number for our shops and warehouses.

All right. Thank you very much, Mariela.

Thank you.

Thank you, Cesar.

Yes, Hector, please go ahead, Hector.

Hi, Mariela, rest of your team. Good morning.

Thank you for taking my call. I had two questions.

One, last quarter, you talked a little bit about the increase in competitive landscape, and you referenced it again this quarter. I was hopefully to better understand if there's specific sectors that you're seeing that have more competition, and then potentially how is that directly impacting your spare parts and services side of the business?

That's one side of my question. Then the other question is with regards to this rental equipment that you're talking about for the larger-scale mining industry.

Can you help us maybe understand a little bit of how that, once again, impacts the spare parts and services unit? Could we potentially see more of an impact from that unit specifically?

Those are both my questions. Thank you.

Thank you, Hector. Thank you for your participation in the call.

The competitive landscape is all over, and I think we have explained a little bit in previous calls that I would say we are probably the only player in the market that has a full portfolio, no? It's Caterpillar that has a full portfolio: so engines, large off-highway trucks, the huge shovels, the large construction equipment, the medium-sized construction equipment.

Some players or some competitors only play in one arena, in one family, in one category, okay? We get specific competitors for each family, different competitors for each family.

Competition is coming from different parts, no? In mining, it is mainly a competition between ourselves, Caterpillar, and Komatsu.

It is a strong competition, it has always been, and each deal by deal. I would like at this point also to mention around Tía María, that has been asked in previous calls, no?

Tía María move forward. They already were doing some works in the site, but they were more profound, and they have moved forward with six distinct work packages, okay?

Three of them were contracted directly, and three were contracted through contractors, okay? That's also important that we have relationship with the large mines, with the contractors, with the large contractors, with the medium-sized, with our branches.

We touch all the market. We're not only play in one of the acts, but in all of them, no?

From this three from the three works that were managed through contractors, we have captured the vast majority of the business. I would say that today 60% more or less of the fleet you see in Tía María with contractors is with Caterpillar units, reinforcing our strong presence through contractors in the mining operations.

On the three direct orders placed by the client, we secured one. There are two that were awarded to a competitor that again reflects this competitive scenario, with deliveries that are still scheduled through 2027.

We are going to see those coming in two, three years in a row. Despite this, our long-term partnership with this customer remains exceptionally strong.

We have fleet operating there, no? We continue to place a high value in this technical expertise and aftermarket that you are pointing out that I will go further into that answer then.

Yes, in mining, it's a very strong mainly between two two competitors. In construction, we see the legacy competitors and we also see the Chinese, as we have mentioned before.

There's more participation from Chinese. We have from Caterpillar a Chinese brand, SEM, where we are the leaders today in the Chinese sphere, no?

The number one player in the Chinese brands is our SEM brand. We have different proposals to compete in each of these segments of the market, no?

Unimaq, with our BCP, the small line, has maintained very high piece. I would say last year, Unimaq with the BCP line has been around a 50%, and Ferreyros with a medium-size construction more than 40%.

We are still very strong in the market even in this competitive landscape. In this way, we're still seeding, putting more fleet, more population in the market in order to keep our operating model of then being able to accompany the customers not only at the moment when we sell the equipment, but throughout the lifecycle with more accompanying them in their operations and the maintenance and repair of their equipment.

In that business, technology plays a very important role. With Caterpillar capabilities by creating the VisionLink and a lot of monitoring conditions, we have been able to provide customers insightful information on when to stop the equipment and not to maintain and repair, also how to operate it better to reduce operating costs, like to reduce fuel consumption, and so on.

It's not only the aftermarket that we can get with maintenance and parts, but also the support we give in the everyday operations to our customers. Moving to the side of your question on aftermarket, there the population continues to grow.

We have a competition also in aftermarket. There's some players that want to provide non-genuine parts.

I think customers still value better the genuine parts, and we provide elements and calculations on how the availability of the product is better when they do repairs with genuine parts, and also when they do repairs with our consultancy, and mainly the big components in mining that they repair with us, no? There's start to appear some competitors.

I would say that in aftermarket, the challenge comes more than from competitor, from the same customers that want to reduce their operating costs, because in some mines, the grade starts to decline a little bit. Even in a very good commodity price scenario, there's a desire to reduce operating costs, there's some pressures also there in margins in aftermarket.

Rental fleet: we do the repair of our rental fleet, each time the customer buys their own, I would say wearables, no, any parts that are consumables, but then the equipment comes back to us, and we do the maintenance and repair from one rental period to the next rental period. The same in the rental fleet of large mining equipment that I was referring to, that is something 4, 5 years new and that we're going to continue to grow, and we're planning to invest $40 million in 2026 in more rental fleet, that comes with a full maintenance and repair from our side.

I would say in mining, maintenance and repair is mainly done by us. We have in some cases even MARC contracts.

When we do rental fleet in mining, we're going to do it with our own maintenance and repair. In the other fleet also each time a unit comes back after 3, 6 years of a contract, we do maintenance and repair.

Thank you, Hector. I hope I have covered your concerns.

Thank you, Mariela.

Okay. I don't think we have any more questions now.

Again, we have more than 40 people in the meeting today. Thank you very much for your interest.

Thank you very much for your continuous support, and also all your questions that also bring ideas to us. We hope to see you soon in our shareholder meeting, no, by the end of this month, we're going to announce, but usually it's in the last week of March.

We hope to see you all there. We will have a full report of the year, and always glad to see you there.

Thank you very much. Have a nice day.