Good morning, good afternoon, and welcome to Ence's first quarter 2026 results presentation. Thank you for joining us.

I'm Ignacio Colmenares, Executive Chairman, and today I'm joined by our CFO Alfredo Avello and our Head of IR Inés Álvarez. Let me start with the strategic picture and our overall objectives.

Our plan remains simple to describe and rests on four pillars: growth in higher margin special pulp substituting BSKP, local wood and biomass sourcing, cash cost efficiency, and EBITDA growth in our renewable platform, leveraging our position as the largest collector of biomass in the Iberian Peninsula. Slide 4 summarizes the first quarter of 2026.

It shows the progress we continue to make in all pillars of the strategy, despite a less-than-brilliant quarter impacted by several one-off events. Importantly, these events do not change our full-year pulp guidance.

We consider that both the market and the company's costs are at an important inflection point that will be visible in future quarters. The pulp price environment has continued the positive trajectory we saw at the end of 2025.

European gross BHKP prices stood at $1286 per ton at the end of first quarter '26, compared with $1100 per ton at year-end 2025. Major producers have announced further price increases up to $1430 per ton to be implemented in the short term.

Since prices in our contracts are linked to the two previous months, we start to benefit from the price increase in the second quarter. At the same time, we continue to work on the fundamentals of the business, improving our product mix, making progress in our cost reduction initiatives, and advancing the renewables platform.

In our pulp operations, our pro forma cash cost was €479, 4-7-9, per ton in first quarter, with Navia in its planned shutdown, and excluding the impact of the Navia strike. On the product mix, special pulp products, including initial fluff volumes, accounted for 34% of total pulp volumes sold in first quarter '26, +13% compared with 2024—sorry, compared to 2025, despite the strike.

We remain on track to reach 40% for the full year 2026, and to exceed 62% by 2028. As for our renewable platform, pro forma energy generation was 303 GWh in first quarter '26, compared with 277 GWh in first quarter 2025.

This figure excludes recent extreme weather conditions in the Iberian Peninsula. This had an impact of 40 GWh in production and of around €6 million at EBITDA level.

La Galera has completed its odor elimination program and will act as a showcase for our biomethane pipeline developments. Financially speaking, group consolidated EBITDA was €1 million in first quarter '26.

Pulp EBITDA was negative €1 million. Renewables EBITDA was €3 million, including €1 million of devex related to new business developments.

Investments amounted to €53 million in the quarter, including machinery leasing of the fluff project, and the final payment of €15 million for the 2019 pulp dryer debottlenecking at Navia. Our full-year capex guidance of €120 million for both businesses remain unchanged.

Net debt stood at €462 million, with €209 million in cash. We also continue to act proactively on financing.

As a reminder, we registered a new €200 million MARF bond program in January 2026, and completed a first €85 million issuance with a 4-year bullet maturity and a 410 basis points coupon, a clear signal of the reliability of Ence for the investor community. In addition to the €7 million CAEs already collected in the first quarter, we cashed in last week €21 million from the collection of tax losses.

In summary, this was a quarter heavily impacted by one-off events: the Navia strike in pulp, and extreme weather conditions in biomass generation. None of this changed our full-year guidance, nor our strategic trajectory.

Before turning to the pulp market, I would like to address the geopolitical context. On slide 6, we not only outline why we expect the Iranian conflict to have a limited negative impact on our business thanks to strategic mitigants in both pulp and the renewable platform, but also why the conflict could create opportunities for European pulp players and local energy producers.

In pulp, our mitigants are structural. We are more than self-sufficient in electricity within our production process, with excess energy sold back to the grid, and that excess may benefit from higher pool prices.

Our gas exposure will be further reduced in the near term through Navia's efficiency and decarbonization plan, which includes replacing gas consumption in the lime kiln with pulverized biomass and bioethanol captured during the process. This investment will be fully operative by mid-2026.

Remember that out of 6 thermal MWh required per ton of pulp, 5.5 are already self-produced. We source wood locally, with an average radius of less than 110 kilometers, and our commercial focus is in Europe, which accounts for 92% of our pulp sales.

In our renewable platform, we rely on fully local biomass sourcing, with an average radius of 145 kilometers. We have an ongoing electricity hedging program for 80% of production, and gas hedging for 72% of our needs.

The opportunities are real. In pulp, the positive pricing momentum favors European players focused on the local market, given the logistics constraints faced by Middle East, Asian, and Latin American pulp and paper producers in its exports.

In our renewable platform, we expect an acceleration in our industrial heating pipeline. Biomass is more competitive than gas, and its supply is more reliable, as well as increased revenues from ancillary services due to higher power prices.

Biomethane benefits from similar tailwinds. Let's look at cost competitiveness on slide 7.

Our cash cost trajectory remains on track to meet our full-year guidance of around €468 per ton for 2026. Our competitiveness and efficiency plan aims at cost savings of €30 per ton: €22 per ton from headcount reduction, process re-engineering, and digital and AI-enabled optimization; and €8 per ton from the Navia cost reduction decarbonization project.

In terms of progress during the quarter, on the competitiveness and efficiency plan, we captured savings of €6 million on annualized basis in first quarter. Taken together, these initiatives underpins the €30 per ton cash cost reduction expected during '26 and '27, with approximately €15 per ton expected this year in '26, supporting our guidance of around €468 per ton for the year.

Slide 8 considers the market environment and the continued upward momentum in hardwood pulp pricing. BHKP prices ended first quarter '26 at $1286 per ton, compared to $1100 per ton at the end of '25.

Major pulp producers have announced price increases in Europe of up to $1430 to be implemented in the coming weeks. The expected cost increase in logistics and chemicals stemming from the Iranian conflict, combined with a tighter paper and board market in Europe, may offer further upside on spreads.

We expect a price improvement in the second quarter and third quarter, as our pricing structure is indexed to a two-months trailing reference. Importantly, BHKP continues to gain share versus softwood.

Eucalyptus pulp demand has grown by 1.3% so far in 2026, January and February, in contrast with a 6% decline in BSKP. Fiber-to-fiber substitution, combined with BSKP capacity closures and shifts towards dissolving wood pulp, will continue to drive BHKP demand up.

Moreover, logistics disruptions linked to the Iranian conflict favor higher prices for regional players such as Ence, due to the limited availability of overseas products, such as pulp and paper, from Asia, Latin America, and Middle East. Overall, the message is clear.

The market backdrop supports firmer hardwood pulp pricing in Europe, driven by a combination of favorable demand dynamics, supply constraints, and higher fiber costs. That is precisely why our strategy is built around cost, fiber security, and growth in special pulp substituting BSKP.

Moving to slide 9, our product strategy continues to progress as a key differentiator. Special pulp accounted for 32—sorry, for 34% of sales volume in first quarter '26, compared with 30% in '25.

These products deliver higher margins, approximately €36 per ton above standard BHKP, since they substitute higher-cost softwood alternatives in multiple applications. We expect this share to increase to 40% in 2026, and to exceed 62% by 2028.

We have two range of special pulp products. Ence Advanced is our solid, broad range of BSKP pulp substitutes with different attributes: high strength, unbleached hardwood pulp, low porosity, softness, suitable for diverse applications, including hygiene, decor, and packaging.

Our 2028 target is 500,000 tons, with an incremental margin of over €30 per ton versus standard BHKP. Ence Fluff is another flagship, strategic product.

Ence is the sole European producer of fluff pulp based on eucalyptus wood, competing with more expensive softwood. We are currently in eight homologation processes.

Our 2028 target is 125,000 tons, with an incremental margin of over €60 per ton. Fluff ramp-up is not just a startup story; it's a market access story.

Qualification takes time, but once approved, volumes tend to be sticky, and the product is anchored in more stable end markets linked to the aging population and improved hygiene habits. These products are not simply marketing labels; they are an economic lever.

When customers use our grades to substitute softwood pulp, they do so for performance reasons. That performance allows pricing discipline and, over time, a structurally higher margin than standard hardwood pulp.

As you can see in slide 10, our strategic goal is simple. We are not only lowering costs, we are improving what we sell.

Together, these moves are designed to reposition Ence as the lowest-cost producer on a BSKP-substitute basis. By 2028, more than 62% of Ence's sales will come from BSKP-substitute products.

Combined with our cash cost reduction programs, this strengthens our relative position on the curve in downcycles, and increases our operating leverage in upcycles. Due to the effects of both the improved product mix and cost saving initiatives, in 2028, the pulp spread will be €52 per ton higher than in 2025.

Moving on to slide 11, let me now turn to our renewable industrial heating platform in Spain. Our target is to supply 2 TWh of thermal energy by 2030, contributing around €30 million to EBITDA.

We currently have one contract in operation, and we are adding one more in May, and three more in the summer: five contracts operating at the end of the year. Our pipeline includes 11 projects under negotiation, of which three are under advanced negotiation, with a required ROCE above 11%.

Continuing with slide 12, our biomethane platform in Spain continues to advance steadily. Our target is to produce over 1 TWh of biomethane by 2030, and to contribute more than €60 million to EBITDA, with return discipline above 12% ROCE.

The pipeline is solid and substantial. Nine plants are expected to reach ready-to-build between '26 and '27, and 25 plants are already in the late permitting phase.

In total, we have 41 plants with gas grid connection authorized, feedstock, and locations guaranteed. Slide 13 illustrate the depth and maturity of our biomethane pipeline.

Our pipeline has a potential capacity of 4 TWh, four times our 2030 current target of 1 TWh. This underscores the different options open to us, and our ability to accelerate or pace development according to market conditions and return discipline.

I now ask Alfredo to summarize our financial position.

Thank you, Ignacio, and good afternoon to everyone on the call. I will now walk you through the financial results for the first quarter of 2026, before handing back to our Executive Chairman for the closing remarks and the Q&A session.

Let me start with slide 15 with an overview of our financial results. As already mentioned, the first quarter of 2026 was, apart from the annual planned shutdown at Navia, marked by two one-off events: strike at Navia, linked to the ongoing collective dismissal process, and the extraordinary spell of extreme weather conditions suffered in the Iberian Peninsula, with relentless rainfall reaching a staggering 2.4 times the annual average.

In any case, none of these change our full-year guidance given in our last call. Group consolidated revenues amounted to €154 million in first Q '26, compared to 187 in first Q '25.

In the pulp business, revenues reached €114 million, compared with 135 in first Q '25. Increase in gross pulp prices was offset by a weaker dollar and by lower sales volumes in the context of the strike.

In the renewables platform, revenues amounted to €41 million, compared with 52 in first Q '25, as a consequence of lower electricity production due to the disruptions caused by the said extraordinary spell of extreme weather conditions. In the pulp business, EBITDA amounted to a negative €1 million, compared with 29 in first Q '25, which included €30 million of energy saving certificates, the so-called CAEs.

The extra costs from the strike were mostly offset by €7 million of revenues from CAEs, which are not included in our cash cost calculation. In the renewable business, EBITDA stood at €3 million, compared with €6 million in first Q '25, as a result of lower production, lower pool prices, extra costs derived from the extraordinarily severe storms, which alone impacted EBITDA by approximately €6 million.

At the bottom line, attributable net income amounted to a loss of €18 million in first Q '26, compared to a positive €2 million in first Q '25. Importantly, as highlighted by our Executive Chairman, these results reflect isolated events and the seasonal planned Navia shutdown.

Looking ahead, the combination of stronger pulp prices—which you need to remember that have a time lag of approximately two months prior to flowing into our P&L—the end of the strike in agreement with the unions, and therefore the permitted execution of our efficiency and competitiveness plan, the start-up of the Navia cost-cutting decarbonization and woodyard debottlenecking project, and the normalization of the devastating weather conditions, should drive a significant improvement in the coming quarters. Turning to the next slide, the quarter ended with a free cash flow cash-out of €76 million.

Please note that this figure includes €41 million in growth capex, a high concentration of carryover capex payment in the period, as several strategic projects initiated in previous quarter or years will reach commercial operation by mid-year '26. Let me walk you through the remaining components of the cash flow.

Starting from EBITDA, we had €8 million of maintenance capex, €7 million of net interest payments, and no tax payments during the quarter. This results in a free cash flow before working capital and growth capex of approximately a negative €14 million.

Working capital absorbed €18 million in the quarter, driven mainly by an increase in pulp trade and other receivables, and by renewable industrial heating inventories. These are assets that, since will revert to the client at the end of the contract, rather than accounting them as assets are registered as inventories.

Growth and efficiency capex amounted up to €41 million in the quarter. This figure includes the final payment of €15 million from the Navia 2019 pulp dryer debottlenecking project, capex associated with the Navia cash cost reduction and woodyard debottlenecking project, As Pontes engineering development expenses, and the renewable industrial heating capex linked to the Mahou and Lactalis projects.

Although first Q '26 is marked by a high concentration tail of capex payments, we have a clear target of deleveraging the company, and a committed focus in continuing adjusting down our capex obligations in the coming quarter. All in all, free cash flow for the quarter stood at negative €76 million.

It is important to stress that the Navia cost reduction, decarbonization, and woodyard debottlenecking project, as well as the Mahou and Lactalis renewable industrial heating projects, are all expected to enter into operation in the second and third quarter this year, starting to contribute to EBITDA and cash flow in the second half of '26. In addition, as our Chairman mentioned, we're receiving a positive cash inflow of approximately €30 million in the year: 21 from the collection of non-applied tax losses already cashed in during the second—during the first quarter, sorry, during the second quarter from the Spanish Inland Revenue Service, and the rest from energy saving certificates, the so-called CAEs, of which €6 million have already been collected in the first quarter.

Moving to our financial position in slide 17, we closed first quarter '26 with a solid and well-structured balance sheet. Consolidated net debt stood at €462 million at end of March, with €209 million in cash across both businesses.

Let me break this down by business. In the pulp business, gross debt amounted to €498 million, including €63 million of IFRS 16 lease contracts, with €158 million in cash, resulting in a net debt of 340.

The pulp business financial debt remains covenant-free, and enjoys from great liquidity, well-diversified financial sources between institutional investors and banks, long-term maturities, and no covenants. Maturities are also well spread, with no significant concentration in any given year.

Also, back in our balance sheet, we have fully available €130 million RCF. As I highlighted, in January '26 we registered a new €200 million MARF bond program, and successfully completed a first issue of 85 million with a 4-year bullet maturity in 2030 and 410 basis points coupon.

This transaction extends our average debt maturity, diversifies our funding sources, and represents a clear signal of the confidence of the investor community in Ence's credit profile. In the renewables business, gross debt stood at €173 million, including €5 million of IFRS 16 lease contracts, with €51 million in cash, resulting in a net debt of 122.

This financial structure is also well diversified, with comfortable, long-dated maturities, and a fully available €20 million revolving credit facility. Overall, we have strong liquidity, long-term maturities, and no covenants in the pulp business, which provide us with the flexibility to execute our deleveraging objectives without any constraints.

Before handing back to our Executive Chairman, let me briefly comment on slide 18, which summarizes our main sustainability highlights for the first quarter '26. Sustainability is not a side topic at Ence; it is fully embedded in how we operate, and it directly enhances our cost competitiveness, our commercial positioning, and our license to operate.

On safe and eco-efficient operations, our cumulative lost-time injury frequency rate stood at 2.54 in the first quarter, the best result across our entire historical series. At Navia, we recorded no odor minutes, maintaining our 2025 historic record, and we achieved a new historical low in specific water consumption.

100% of our pulp and energy plants are zero-waste certified. Under climate action, direct Scope 1 emissions at Navia were reduced by 10% in 2025—sorry, by 10% in yes, in 2025 versus '24.

On bioproducts and ecosystem services, we obtained six new approvals for specialty pulps under our Ence special products portfolio, and we have submitted the application for the approval of our fluff pulp under the Nordic Swan and EU Ecolabel schemes. Special pulp products substituting softwood now represent 34% of our sales.

The recycled fiber project at As Pontes has been awarded €25 million under the Industrial Decarbonization PERTE Program, reinforcing our commitment to circularity. We also continue to make progress in forestry bioproducts, with a new eucalyptus clone planned for '26, and over 4,300 hectares of CO2 forest sinks registered in the voluntary carbon market schemes.

On responsible supply chain, approximately 88% of the land we manage and 84 of the wood we source are certified, and 100% of our sites are SURE system certified for sustainable biomass. On positive social impact, 30% of our managerial position are held by women.

41% of job openings have been filed with internal promotions. We continue to advance in the allocation of €3 million to 240 social and environmental projects under the sixth edition of the Pontevedra Social Plan.

We have launched four talent programs across Navia, Pontevedra, Magnon, and corporate forces. Finally, the external criminal compliance audit has been completed, with results indicating that the level of implementation and operation of our control mechanisms is more than adequate, with no non-conformities or observations identified.

These achievements are not only reflected in our leading ESG ratings—EcoVadis Platinum, among the top 1%, and MSCI ESG rating fine and excellent, and our inclusion in the FTSE4Good Index—but also translate into direct, tangible cost and commercial advantages. With this, I hand the floor back to our Executive Chairman for the closing remarks.

Thank you, Alfredo. Let's finally look at slide 20 with the outlook for 2026 and some closing remarks before inviting your questions.

It is true that it has not been a great quarter because of the impact of several one-off events. However, putting all this together, our strategy remains consistent and disciplined: to increase sales of special pulp substituting BSKP, to strengthen local wood and biomass supply, to reduce cash costs, and to expand our renewables platform EBITDA, while protecting the balance sheet and maintaining capital allocation discipline.

To summarize the quarter and the outlook for 2026, I wish to highlight five key messages. First, the pulp market continues to improve.

We have announced $1430 per ton from May. The positive outlook is supported by fiber-to-fiber substitution, rising production costs in the context of the Iranian conflict, and scarcity driven by logistics disruptions on Middle East, Asian, and Latin American pulp and paper imports into Europe.

We are already benefiting from the better prices in the second quarter. Second, we have strategic mitigants to absorb geopolitical volatility.

In pulp, we are not only self-sufficient in electricity, we also export energy to the grid. We have local wood sourcing, and we are regionally focused on Europe.

In renewables, on local biomass sourcing. In both businesses, the conflict may offer opportunities: higher pulp prices and spreads in Europe due to limited overseas supply, energy surplus sold at higher pool prices, the acceleration of the renewables pipeline, and higher revenue from ancillary services.

Third, the quarter was impacted by one-off events, but our full-year guidance is unchanged. Ongoing cash cost initiatives are expected to reduce cash cost by €30 per ton over the '26 and '27 period.

€15 per ton on savings are targeted in 2026, supporting our cash cost guidance of around €460 and €68 per ton for 2026. Fourth, our mix upgrade continues.

Special pulp substituting BSKP accounted for 34% of sales volumes in first quarter '26, and is expected to reach close to 40% in 2026. By 2028, over 62% of our sales will compete against BSKP, positioning Ence as the lowest-cost producers in the BSKP cash cost curve.

Together with Pontevedra Avanza, we expect these initiatives to increase the average across-the-cycle EBITDA by 1.5 times from 2028 onwards. Fifth, the renewables platform continues to grow and diversify.

Leveraging in our solid pipeline potential, we are building the largest Iberian biomass backbone renewable energy platform, combining regulated biomass electricity, renewable industrial heating, biomethane, and renewable fuels. We are on track to almost triple its contribution to EBITDA by 2030.

The execution of these projects will be adapted and aligned to our cash flow generation to maintain a prudent across-the-cycle leverage and an attractive shareholder remuneration. Thank you.

We now invite your questions.

Yes, good morning. Thank you for taking my question.

In a context of significant investments ahead, how do you expect capex to evolve and what deleveraging measures you plan to implement, please? Thank you.

Thank you very much. We enter the quarter, as with €462 million net debt: 340 in pulp business, and 121 in the renewable business.

We have a strong liquidity, which amounted to €157 million in the pulp business, and 51 in the renewable business. Besides, as we have undrawn revolving credit facilities for an amount of €130 million in the pulp business, and €20 million in the renewable business.

Said that, we are conscious that we have to deleverage. We don't have a problem, but we have to deleverage.

As in the second quarter, we have cashed already €21 million from tax losses. Due to its cyclical nature, the pulp business is financed with covenants-free debts and long-term maturities, as Alfredo has explained before.

Our balance sheet and the expected cash flow generation should allow us to reach our growth and diversification goals whilst maintaining a prudent leverage and an attractive shareholder remuneration. The timing of our investments could be adapted to our cash flow generation through the cycle, as it has been always happening on the past.

Net debt in euros will remain almost flat up to fourth quarter '26, when it should be reduced. The company is fully committed towards deleveraging.

No major new investments should occur prior to 2028, to allow the business to consolidate a stronger cash generation profile on the back of the results of the efficiency and competitiveness plan, and Navia decarbonization initiative, and the improved product mix in the context of a positive price environment, as we have described. In 2028, once cash generation reaches a run-rate level and leverage is normalized, initial works of Pontevedra should start.

The last 12 months net debt to EBITDA ratio is affected by the low pulp prices and strikes in fourth quarter '25 and first quarter '26. Nevertheless, investment discipline, pulp prices, and delivery on cash cost saving initiatives are expected to normalize the ratio by the end of the year.

We maintain our target average cycle EBITDA of ratio of below 2.5 times in the pulp business, below 4.5 times in the renewable business. Regarding capex, we maintain our 2026 guidance of €120 million.

Capex in first quarter '26 amounted to €53 million, and it will go down to €28 million in second quarter '26. In the second half of the year, we expect to invest the remaining €39 million, allocated almost evenly between the two quarters.

We should note that the majority of cash outflows will take place in the first half of the year due to: first, payment related to growth investment scheduled for completion during the first half, such as the industrial heating projects and the Navia cost reduction, decarbonization, and woodyard debottlenecking projects; two, the 15 the €15 million payment related to the 2019 Navia expansion, it was made in the first quarter; and three, the maintenance shutdown in Navia in first quarter. In 2026, pulp business capex will be €74 million, 7-4, out of which €23 million are related to annual recurrent maintenance of both factories and forestry activities that are capitalized, whereas the remaining corresponds to investment projects from previous year, with significant impact on the group's profitability, as an example, fluff or Navia decarbonization.

Navia cost reduction, decarbonization, and woodyard debottlenecking, €40 million already paid in first quarter, €3 million to be paid in second quarter. Closing payments of Navia 2019 pulp dryer debottlenecking project, €15 million already paid.

Fluff, €1 million paid in first quarter, and €6 million to be paid in second quarter. Going now to renewable business, in 2026, €46 million, out of which 17 are related to 2026 maintenance or new initiatives, very limited, and the remaining are carryover investments from the previous years.

Renewable industrial heating, €5 million cash out in first quarter, and €14 million, 1-4, expected in second quarter. In 2027, capex should be around half of the 2026 level.

The main items will be recurrent maintenance of approximately €35 million in total in the full perimeter, and no more than sorry, €35 million in total, and no more than €30 million in renewable packaging and biomethane projects. The pipeline of industrial heat projects should continue to grow, supported by PERTE programs, and therefore with limited equity returns.

Is there any other question?

Thank you very much. Again,

Gentlemen, if there are no further questions, we will stop now. That we can call either Inés, Alfredo, or myself next week if you have further questions, and we shall meet in three months' time with better results on the second quarter.

Thank you. Thank you all.

Good afternoon. Ladies and gentlemen,