Digi Communications N.V. (DIGI) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Digi Communications N.V. Investors 2025 Preliminary Financial Results Presentation. A copy of the corresponding report is posted in the Investor Relations section of Digi's website at digi-communications.ro. The conference is being recorded today, and a reply will be available shortly after. [Operator Instructions] Before we can start, you are advised that certain statements in this conference are forward looking and, therefore, subject to material risks and uncertainties. Actual results could differ materially from those stated or implied by such forward-looking statements due to the risks and uncertainties associated with Digi Communications N.V., which include among others, various risks related to our business, risks related to regulatory matters and litigation, risks related to investment in emerging markets, risks related to our financial position as well as risks related to the note and the related guarantee. I would like to introduce the speakers for today's call, Mr. Serghei Bulgac, the CEO of Digi Communications N.V.; and Mr. Dan Ionita, the company's CFO. We may now begin the call.

Thank you very much, Mariana. Good afternoon, ladies and gentlemen. I also want to introduce one more presenter for today. Just like in our third quarter call, we will have also Marius Varzaru, the General Manager, the CEO of our Spanish operations, joining our call and presenting our results from Spain. Having said this, thank you very much for joining. And yes, let's start discussing our outstanding results. So we had another successful robust year of growth with both revenues and RGUs growing 15% on a group level, revenues surpassed EUR 2.2 billion. Of course, this is also the year when we exceeded EUR 2 billion in revenues. RGUs increased 15% in 2025 exceeding EUR 32 million RGUs. Of course, Spain was the largest contributor in terms of customer growth for Romania, the current -- the established markets in our Group. Having said this, we also had growth in our new operations, particularly in Portugal, which we will discuss a bit later. So I said Spain, and I will keep saying Spain during this presentation, margins will continue. I'd say this was the year of Spain with revenues exceeding EUR 936 million year-on-year with customer growth at a very healthy 28% with EBITDA growing from EUR 153 million to EUR 175 million. I mean, this is the moment when our colleagues were extremely grateful and proud of our colleagues' achievement. Other than that, it was really a year of continuous operations for us. We continued expanding our network. We continued gaining customers across all our markets. And of course, we also celebrate the first year in Portugal and Belgium, which will certainly contribute to our results in the years to come. Couple of words on just to repeat some of the developments and to highlight some of the developments that took place in the fourth quarter. So as we discussed a couple of times so far. On October 1, we completed the acquisition of Telekom Romania assets. It was part of the larger transaction done with Vodafone. As of today, we have integrated part of the Spectrum licenses that we acquired through this acquisition part of the towers and also a significant part of the prepaid customers, which also show up in our year-end results. We also -- in October, also on the 1st, complete the Andalucía, Spain transaction, whereby we delivered 2.5 million new homes passed in a Andalusia region. And the total financing for the project amounted to EUR 300 million, equity and debt. We have refinanced successfully the 2028 notes with a new instrument, which is due in 2031. So 6 years, EUR 600 million, 4.62% interest rate. We believe this was one of the most important achievements from a pricing point of view as we secured our debt profile and maturity profile, we will come up to this a bit later. And I think we are in a very good shape to continue our growth and development from this point of view as well. And last and certainly not least, we have just announced a couple of weeks ago the intention to triple the number of shares in circulation from 100 million to date to approximately 300 million. This is a transaction benefiting our shareholders and benefiting the liquidity of the shares. So all shareholders holding a share will receive 2 new additional shares for free through incorporation of reserves, we expect the General Meeting to take place on March 20. And once approved, the share capital increase should be complete before June -- shall be complete before June 30. Once again, it's probably a small thing, but it should significantly, hopefully, it should improve our liquidity profile on the Bucharest Stock Exchange. So coming back to the numbers, once again, EUR 2.2 billion in revenues, EUR 1.2 billion of revenues in Romania, almost EUR 927 million of revenues in Spain. Romania, EBITDA of close to EUR 500 million, Spanish EBITDA at over EUR 175 million, a healthy growth from EUR 153 million a year ago. All in all, total EBITDA, EUR 585 million, it's a small growth in comparison to last year. Yes, just pretty much on par with 2024 results. However, as you see on this table, this is really the result of launching the Portuguese operations. And we believe that this number will improve significantly going on, given the fact that we have very robust, very good performance in our established markets, Romania and Spain. Spain catching up quickly with EBITDA, and Marius will explain it in much better detail just in a few minutes from now. Also speaking of Portugal, we know that this is the, let's say, most consuming year in terms of resources. It's the first year of operation, it's the launch. This is the moment where we incurred all the costs, but still benefited from little revenues as our customer base is growing and we are certainly set to improve this growth figure significantly as we go forward. So all in all, we expect EBITDA to continue growing, but not in line with 2025 results, but rather in line with previous years, whereby our growth was in the 10% area. We are extremely happy with the EUR 32 million RGU numbers -- RGU number because this is the fundamental value of our company, customers and customer relationships. Very healthy growth of more than 4 million RGUs during 2025, shows that our efforts to build, grow networks, our efforts to provide sophisticated, high-quality, good telecom products but for prices work, and they work across all our geographies. So diving in a little bit into our numbers. So we mentioned the high figures, revenues, EBITDA. CapEx stood at almost EUR 800 million, EUR 798 million to be to be very precise. This is more than 10% decrease from a year ago, in line with our expectation and we are set to continue decreasing capital intensivity going forward. So for 2026, we would expect CapEx to decline by -- in the area of 10% versus 2025 further. So with total final CapEx being somewhere between EUR 700 million and EUR 750 million. But anyway, the expectation, the intention is to decrease this number towards EUR 725 million range. So all in all, very robust, very good performance in Romania and Spain. First year of operations in Portugal, which affected our EBITDA, which affected our net income. But once again, as we mentioned, we do not expect this trend to make us stagnate. We certainly expect this to improve EBITDA and profitability to improve significantly in 2026. So RGUs -- we are -- we used to be mostly a fixed operator, a fixed services operator, pay TV, broadband as of last quarter of this year, mobile has exceeded all other segments combined. So mobile RGUs amounted to 16.1 million units as of December. This -- mobile continues to be our fastest-growing segment, certainly in Spain, and in Romania, but also in all as we offer not in all markets where we operate. So -- and this is -- yes, this is the segment we will continue focusing more at least in Romania. And this is a segment we will continue focusing also in our other existing markets. So just mentioning mobile as a focus, we continue to be the leading benefit of portability, both in Romania and Spain. We've attracted almost 800,000 numbers -- or customers portability in Romania in 2025 being the #1 operator from this point of view. Similar performance is in Spain. We attracted 1.4 growth mobile numbers, of which 784,000 is the result of net portability. Portability gains adjusted for portability losses given that some of our customers also left for other competing networks. We work hard to maintain the same position in the market and to continue the same result as we go forward. So having discussed broadly the Group, I will hand over to Marius to discuss in much detail the outstanding results of our Spanish operations.

Thank you, Serghei. Hello, everybody, glad to be with you today and to present the results and the progress of Digi Spain for one more quarter. As you can see here on this slide, our most important critical factor of success in Spain is the deployment of our FTTH network in a vertically integrated model with our own employees. This solution of deployment allow us to roll out and to operate on a daily basis, very good quality networks, to deploy a future-proof network with the best available technology as this one, and based on the economies of scale, synergies and cost efficiencies, to achieve very competitive economics, both for CapEx and OpEx for the FTTG network. By December 2025, we reached the total footprint deployed by Digi, the footprint that we call smart footprint, a level of 13.7 million homes passed with an overall average cost of deployment of EUR 49 per home passed, a very competitive cost compared to the historical deployment costs that we've seen in the market. The speed of deployment continues to be high. In 2025, we rolled out 2.7 million homes and in the previous year, 3 million homes. I'll goal for the next 5 years is to continue to deploy FTTH networks and to reach total smart footprint of 21 million homes passed. On the bottom part of the slide, you can see how the constant evolution of the takeup of the smart footprint reached a level of 15.8% by the end of last year. And on the top part of the slide, you can better interpret this blended average take-up by the individual penetration rates for each of the cohorts, depending on the year when they were built. And in this sense, a couple of comments our competitive offer is very attractive and continues to generate growth in all cohorts, including in the initial ones of 2019, 2020 which reached levels of penetration of 25% to 27% and still continue to grow. Also newer cohorts benefit from higher take-up and faster ramp-up compared to the initial cohort. So we reached faster levels of penetration of 25% to 27% like the initial ones. And in the initial cohort, we started with 3% penetration rates in the first year. Newer cohorts start faster with 6% or 7% for the 2025 cohort. And lastly, related to the network partnerships we concluded during the last 2 years, as Serghei mentioned, on October 1, we concluded the delivery of the 2.5 million homes agreed for the Andalusia project. And for Sota project, we are ahead of schedule. We delivered 5.45 million homes by the end of December, by the end of last year. And we will deliver gradually the rest of 550,000 homes during during 2026 until December. If we continue to the next slide, we can see how these great results in terms of deployment reflects reflect also in our accelerated growth momentum. 2025 being the strongest year historically of net growth for Digi in Spain, both for fixed and mobile services. For fixed broadband, we reached 2.58 million fixed broadband customers with a growth of more than 630,000 net adds in the year, while 100% of the net growth during the last year came from the smart footprint, benefiting from the competitive products launched in October 2024 for this footprint specifically, reflected also in the gradual decrease in ARPU as new customers joining in Digi are subscribing products with lower pricing. We've reached a market share of 17.1% with an impressive increase of 2.7 points of market share during 2025, which is actually achieved only by the net growth in smart footprint, which covers only half of Spain. This means that it makes a lot of sense for us to continue to expand the smart footprint in 21 million homes and replicate in other areas of Spain, the same commercial success we have on the existing cohorts. For the mobile services. This year, we are growing at our fastest pace ever, which is a confirmation that the transformation of the commercial offer from an MVNO type to an MNO offer is effective. And even though the decrease in ARPU during the last 12 months is noticeable, it is compensated gradually by the growth of the customer base. 75% of the net adds for mobile lines are convergent, confirming once more the attractiveness of the Digi value proposition as customers are bringing all their services with us. Continuing to the next slide. We can see how the constant growth of revenues over the last 5 quarters -- we can see the constant growth of revenues for the last 5 quarters, which is a mixed result of customer base growth and ARPU deletion. On the bottom part of the slide, we have presented a gross margin evolution for fixed broadband for the last 5 quarters, which improves due to strong operational leverage, expansion of the smart footprint and increase of its penetration rate. On the mobile side, the margin evolution for the past 5 quarters is determined by 2 moving parts: one starting with July 1, 2025, the new model of mobile telephony cost, the M&O economics, as we call it, started to apply, improving significantly our margins for Q3 and Q4. And for the past 5 quarters, the transition from an MVNO to an MNO model of commercial offering. And in the next slide, we see how this evolution is reflected also in adjusted EBITDA, ex operating leases which for the last 5 quarters reflects the effect of both fixed broadband and mobile gross margin evolution. For the second half of 2025, we clearly see the effect of the new MNO economics model. And for Q4 2025, we anticipated effect from last call -- from our last call for the latest commercial offer update from September 2025. We anticipated a decrease in ARPU revenues with an effect of EUR 6.6 million, which was compensated partially by the customer growth, reaching a net effect of EUR 4.1 million over the quarter. All in all, a very good result for the adjusted EBITDA ex operating leases for 2025 with EUR 175 million, up from EUR 153 million last year. And in a like-for-like scenario, you would have to consider also that in 2025, the growth is even higher due to the fact that it's the first year of full year of Sota related cost access fees for the network. Moving on to the next slide. Going forward, we see the smart footprint as our main engine for growth in Spain, both through new footprint that we intend to deploy towards the EUR 21 million goal on EBITDA and constant growth of the customer base on the smart footprint towards more mature levels of penetration of 25%, as we already have seen in the initial cohorts. This, in turn, will drive growth for mobile customer base as well as 75% of the mobile net gains are convergent, and we expect this trend to continue in the next years. And finally, in the next slide, we can see as these -- how all this translates to a forward-looking guidance for Spain, both for 2026 and midterm. For revenues in Spain, we expect to deliver revenues for 2026, somewhere in the range of EUR 1.40 billion or EUR 1.85 billion. For the midterm, our expectation is for top line to grow in low teens CAGR, which is mostly driven by the ramp-up of the penetration rate for the initial 13.7 million homes of the smart footprint cohorts already deployed and for future deployments, which take 4 to 5 years to reach more material levels. As we have previously seen, our historical cohorts have performed quite homogeneously with initial cohorts reaching 25% and still growing beyond it. For adjusted EBITDA, excluding operating leases in Spain, we expect for 2026 to be in low 20s, consolidated the levels achieved in the second half of 2025. We expect a small EBITDA growth for Q1 compared to Q4 2025 in the context of a step-up of the fixed costs related to mobile telephony, and we project constantly quarterly growth for the remaining 2026 quarters. For mid-term, we target to improve the adjusted ex operating leases margin to above 30%, mainly driven by gross margin improvement, both in fixed and mobile. In fixed due to mix effect as we will increase the penetration of customer's smart footprint and expanding the smart footprint. And in mobile, as we will further benefit from the MNO economics model that we just started to apply. This margin improvement, which is in its nature, also quite mechanical. We expect to be mostly from front-loaded and beyond the midterm, we expect the margin to continue to improve further as the smart footprint penetration for the new cohorts will grow towards small material levels. And in terms of CapEx additions in Spain, we are currently scheduled to invest around EUR 400 million in 2026 for CapEx additions, including here recurring CapEx, gross CapEx and new FTTH deployment CapEx additions. Our target for the midterm is for recurring CapEx additions to remain below 10% of revenues, in line with our historical figures. In terms of growth, CapEx and FTTH investment additions we currently expect to invest around EUR 850 million to EUR 900 million in aggregate for the period 2027 and 2029, roughly half of which should be related to new FTTH deployment for the smart footprint. This investment will be front loaded, and we expect that the annual investment will gradually decline towards EUR 250 million per year in the midterm. This gradual decline should continue until we reach our deployment targets, subject to new potential development opportunities. So we have a clear vision and plan in terms of absolute target and pace of deployment which will naturally slow progressively with fewer employees dedicated to network deployment efforts in time. Once we reach that point, we will be covering with our own network, most of the urban municipalities in Spain. Beyond that, our strategy in Spain will be based on a number of factors that will take into consideration at that point in time, including competitive landscape, investment returns or new development opportunities. But we want to reinforce the message that the investment, both on the mid and long term in Spain is largely under our control and aligned with our growth vision and plans, and we have significant flexibility to adapt the speed and size of these investments. With this, we conclude the presentation for Spain. We can go back to Serghei.

Thank you very much, Marius. And just a small remark to the audience. This is somehow first time that we provide guidance. We feel that, as we mentioned from many times, Spain is a very mature market -- sorry, Spain is an amazing market being both mature, large for us, but also continued growth. And we saw that providing more detailed guidance on Spain. At this moment, will certainly help for those of you who are making your models to run them better. And just one -- a couple of words on leverage. So total gross debt of around EUR 1.9 billion total net debt, somewhat less than EUR 1.9 billion at EUR 1.87 billion. As we mentioned, we have refinanced our 2028 notes in October last year. And yes, we should have shown this chart as -- when we spoke last time in Q3, but now you see very clearly and cleanly, the maturities. So 2026 is almost without upcoming maturities at 900 -- sorry, at EUR 94 million in payments, followed by 2027, EUR 260 million and 2028, EUR 350 million. Leverage has gone a little bit somewhat up from 2.3x to 3.19x as of end of last year. This is really -- I mean going beyond 3x is really the effect of launching the new operations. In particular, both Portugal and Belgium, the EBITDA and the cash outflows that were necessary to support the EBITDA loss and the cash outflows that were necessary to support these operations. However, we see this moment of being higher than 3x as temporary by the end of this year, 2026, we intend to go below 3x territory and we intend to deleverage further in 2027 to being in the area of 2.5 to 2.75x at least. So I think this concludes our presentation. Yes. And just final remarks. We will continue in '27 -- in '26 focusing on customer growth, consolidation of networks the same places we still build out like we do in Spain, like Marius mentioned. In other places, we just further refine further improved networks that we operate. But customer growth will be our biggest focus driving growth, profitability and overall Group value. So thank you very much. And yes, once again, hope our pace was good enough for you to absorb and digest our messages. And we are more than happy to speak to you and to discuss. Just maybe a few seconds for questions to start showing up. They are in the chat of the Zoom. And once we start receiving, we will speak to you.

So the first question comes from Arnaud [indiscernible]. Could you please confirm whether the EUR 2 billion cumulative CapEx guidance for 2030, both years included as communicated in Digital Spain in June last year remains unchanged. And this is the first question. And second question, regarding the reported below market average deployment cost of EUR 48, EUR 49 per homes passed. Could you provide more granularity on what is included in this figure specifically? Does it cover customer activation costs like installer visit, drop fiber CPE or does it refer strictly to passive network built up to premises. I will let Marius to comment as these questions relate to Spain.

Thank you, Arnaud. So related to the first question, EUR 2 billion cumulative CapEx guidance for 2024, 2030 that is already ongoing. So we maintain the promise of investing in Spain more than EUR 2 billion in this period of time. We already had 2 years out of that interval investing. So we think we will reach that level by that time. And regarding your second question, the cost we communicate for average deployment costs for home passed. So for the network that we deployed is strictly related to the network in itself, both the active and the passive part of the network. So all this included as well, but we do not include in this cost, neither CPEs, nor fiber cost of installation as it's related to that. So it's pure network deployment cost.

Thank you. So we go on.The next question is from Jeremy [indiscernible]. You have 71% of the 21 million homes passed in Spain owned by Digi. How many more homes of these can you potentially sell? Is it all? And at what sort of price per home? This is the first part of the question. Then the second part, the 49 cost per home passed, does that include fiber from the to your backbone network? Or do you have to wholesale some of the network connectivity from Telefónica? If yes, what is the cost of that, please? Thus, the EUR 49 exclude connection costs. If yes, what is the cost to connect per home, please, including and excluding customer equipment. How many homes passed did you have in Portugal at the end of 2025? And what timeline do you now have for reaching 100% of homes passed? I will let -- I think some of the parts of the questions are repeating. I'll let Marius just comment on differences and on what was not answered before.

Thank you, Serghei, and thank you Jeremy. So out of the 21 million homes that we will have deployed in midterm, we expect that 6 million homes will have been delivered to Sota and 2.5 million homes to the to region Andalusia for the rest of the homes with our current thinking is to continue to own them. So we -- unless something relevant would happen, we would not sell those homes in particular. So out of the total homes we have now, we will continue to sell to Sota during this year, 550,000 tonnes. And this is the initial objective of the project related to the EUR 49 per home passed. As mentioned before, this is close connection costs. So does not have any kind of cost included related to CPEs, installation costs or SAC. And until now we haven't decided not to disclose this detailed information related to what is our SAC cost or CPE connection costs for customers. And related to your second question, EUR 49 cost per home passed, if it does include the fiber-to-the-home to our backbone was more so the network. The cost for deployment includes all the passive and active elements starting from the data centers, including OLT, all the fibers, including the customer distribution boxes up to the building of the customers in and nothing else. So it doesn't include backbone network connecting this FTTH network to the national backbone and to Internet and does not include CPEs. And for the question for Portugal, Serghei will comment.

Sure. So we have around 2.2 million, 2.3 million homes passed in Portugal. We are not concentrated -- we will continue building the network. So no question about it. But we are not focusing now on speedy rollout. We are rather focusing on exploiting the existing coverage and yes, we -- there is no target that we want to assume in terms of the time to roll out 100% connectivity. A question from Ivon [indiscernible]. Congratulations on the impressive RGU growth this year, particularly in Spain. It is highly noticeable that if we were to look at the group operations, excluding Portugal, the adjusted EBITDA growth would have likely exceeded 10%, a significant jump from the reported 1%. From this perspective, could you clarify how much of the EUR 79 million loss in Portugal is truly onetime market entry expenditure versus recurring operational costs. Furthermore, at what RGU threshold, do you anticipate the Portugal segment reaching EBITDA breakeven. So you're absolutely right. So if you just add plus the positive geographies. So if you look at losses in our EBITDA, excluding the minuses, we would have generated EUR 670 million, EUR 675 million in EBITDA this year, which indeed is significantly more than 10% growth. And basically, we've achieved it in our legacy markets. Of course, we have to pay the cost of starting the operations in Portugal. It's -- I'm not sure I have the calculations ready to answer the second part of the question about onetime costs. We are certainly working towards diminishing the EBITDA loss through customer gains, through improvements in our cost base through further integration between NOWO and Digi. The intention is to decrease this loss significantly this year, but I will not provide guidance as of now because this is work in process, and it's difficult to give you exact numbers. But once again, thank you for pointing it out because other than Portugal and in terms of EBITDA, our growth was amazing during 2025 in Spain, Romania, Italy. Thank you. So a question from Irina [indiscernible]. Are there any updates regarding the potential Digi Spain IPO? We have -- I think we have disclosed in the last quarters that -- at the end of last year, apologies, that we are continuously looking for opportunities and making [ IP ] in Spain is an opportunity to enhance value of the Spanish group of the Digi Group, overall. So this is certainly possibility for us. However, as of today, we don't have clear and precise guidance on the moment and timing of IPO. Whenever we are ready, we will certainly announce the market. And the second question, what will be the cash dividend distribution policy for 2025? Should we expect free share allocations to substitute cash distributions or do you intend to continue both in parallel? Well, thank you very much for the question. I think it's very helpful. We do not consider that these 2 are competing. To the contrary, we want to continue the cash dividend policy in '25 as we did this before, meaning the dividends will be on par with '24 -- sorry, the dividends will be -- the dividends paid in '26 will be on par or better to the ones paid in '25. And yes, increasing the number of shares in circulation has no connection to this. So it will not affect the normal dividend distribution. But thank you very much for the question. A question on Digi Spain net debt position as of December 31, 2025, we have just published preliminary results at this moment. The full report is being prepared and is being led by the auditors by KPMG. So we would kindly ask you to have patience until end of April when we publish the full numbers, both for Romania, Spain and the rest of the Group. On Belgium, what are the main structural barriers you face in Belgium? Why the market accelerating at a significantly slower pace compared to Portugal? Well, thank you very much. I think it's a correct question. And I will just come back to what we discussed for a few times, well, maybe not in the last 6 months or maybe not in the last 1 or 2 conference calls. But before, but we've always mentioned that our markets in Iberian Peninsula, both Spain and Portugal benefit from much more developed infrastructure that is available in those markets and is provided by the incumbents. In certain cases, based on regulatory environment, in other cases on a competitive basis. So this infrastructure is lacking in Belgium, which makes us do an effort to develop our own. This does not change the attractiveness of the market or the project for us, it will just take longer to develop and to achieve in comparison with, again, Spain, Portugal. But this is something we're used to. We have developed Romania from scratch. Of course, I would say jokingly in the last more than 30 years, of course, 30 years has no relevance in this example. But building organically networks is something that we know and we're not afraid of. Having said this, we will exploit any opportunity to obtain access to existing fee infrastructure of the incumbent operators or we will try to find opportunities again to the deals with them or with other infrastructure providers. Second question, where do you tend to fully consolidate Belgium? There's no guidance on that. As you know, we are partnering in Belgium with Citymesh Group, and long as this partnership involves mutual control of business, we cannot consolidate in Belgium. So far, so good. We are in this setup. So no change is expected. Yes. Question number three, what is the effective CapEx budget allocated to Belgium for 2026? How much of these investments will be financed through local debt versus capital injections from the parent company? I think our allocation for -- our expectation for contributions to the Belgian market are in the in the EUR 50 million to EUR 60 million for 2026? So this is a relatively smaller number in the overall picture of CapEx that we want to deploy. However, from the accounting perspective, this is not part of CapEx, and these are not the funds that we're looking to obtain locally. These are the funds provided on the group level. Given the relatively low ARPU in Portugal, do you foresee price increase what would be a target ARPU level that would make the Portuguese operations sustainably profitable? And this is the last question. I think this is not the right way to the right way to look at it. We're not -- we believe that we have right affordable good prices in all our markets as of today. We have launched our Portuguese operations only recently for slightly longer than 1 year. There's no intention to do any price increases because we believe that the current prices work both for our customers and for us. Also for us, becoming profitable is just a matter of volume. It's not a matter of price. And we can certainly say that, yes, now midterm, long term, it's not our intention to adjust the prices. A question from [ Christian Pedri ]. Can you comment on the cost per home in Spain of EUR 800 per home? Well, sorry, no, sorry, it was the first part of the question. And then there's a correction, sorry, EUR 48, EUR 49 per home and how it is versus the competition. So I'll let Marius just comment.

Thank you, Christian. The -- our cost of deployment compared to historical cost of deployment of our competitors tends to be in the range of probably less than half of what they used to spend for it. And this proves that we -- the vertically integration model that we developed was great for us and allowed us to have a structural competitive advantage long term being able to compete with lower pricing for fixed broadband services, but also with good margin and with potential to grow the profitability long term.

Yes. Thank you, Marius. The next question is from [ Peter Victor ], which is the CapEx guidance for 2026, when free cash flow do you expect to become positive? Well, so the CapEx guidance for 2026, ideally mention, we would expect roughly a 10% decrease of CapEx in '26 versus '25, so from roughly EUR 800 million we would like to go to EUR 725 million plus/minus. I mean could be EUR 725 million, EUR 735 million or maybe a bit lower than EUR 725 million. We will see. But the intention is, overall, to decrease the CapEx intensity. And if you paid the attention, sorry, I missed to mention this. It was on our slide number 8 in the presentation. The CapEx intensity is anyway coming down as we spent in 2025, 36% of CapEx from revenues, significantly lower than 40% or close to 50% of CapEx spend that we had in the previous years. And in terms of free cash flow positive. We Are free cash flow positive in Romania, our largest and most mature and established market, and we are very happy about this. We will certainly work to become free cash flow positive in the midterm in Spain, in line with guideline that Marius mentioned a bit earlier. In terms of free cash flow in the other markets, it's probably a bit early to say. But anyway, somewhere in the 10% to 15% market share in mobile and fixed services when we achieve both in Portugal and Belgium, we would expect to be free cash flow positive. So the next question is also on Belgium from [indiscernible]. The growth of the number of mobile RGUs in Belgium has slowed in Q4. Is that a reason for concern for the Group. No, you're right, but the growth is more or less in line. I mean, in absolute terms, we have gained close to 100,000 RGUs by the end of 2026. I think we are working to find the proper engagement with customers. We are working to improve to increase our sales, but it's not materially different from what we had in the first part of the year. So certainly, there's no concern. We see -- I mean despite numbers being relatively small, we'll see healthy engagement with our products and within the Belgium by our customers. So no reason to concern. Second question, what is the expectation of the growth of Digi Belgium in '26 in the mobile area. So we -- as I mentioned, we will not really provide precise guidance, but we will certainly be on par with 75, and we want to be better. Difficult to say more. How is the construction of the fiber network in Belgium evolving? Did you reach the expected 100,000 home passed in 2025 and what is the goal of 2026? Yes, we did reach 100,000 homes passed, and we have accelerated growth of the network towards the end of the year. We would certainly be looking to repeat in 2026, what we achieved in 2025, we will see whether we can also accelerate it further. On the slide about the CapEx, Belgium is not being mentioned. Why is that? Well, it's a very simple answer. Belgium is not consolidated as we did mention. So the consolidated results are for the rest of the Group. Nevertheless, I did mention the amount of funds that we allocated internally for our Belgian operations. And yes, you can draw your conclusions. I hope it's helpful. The next question is from [ Daniela Mandru ], OpEx increased by 22% year-on-year. Could you clarify whether this increase includes any material one-offs or if it primarily reflects structural cost growth. Some of the costs are certainly one-offs related to the launch of Portugal, but also Portugal is structurally to continue. So some -- so most of the costs are structurally there. We will work to improve the cost situation through growth in customer numbers and further improvement in the cost structure, in particular, in Portugal because this is where we need this most. Now because your question was general at the group level, yes, there are also, of course, positives like Spain growing at a very fast pace, as Marius is clarifying that EBITDA guidance for 2026 will be in the low 20s. You can appreciate that EBITDA growth just for Spain is expected to be at at least 30% in 2026 in comparison to 2025 just this year. The second question is the share of loss of equity accounted in this was significant in 2025 and is expected to remain negative in the near term. Should we view the current level as peak related to the ramp-up phase? Or do you expect losses to widen further in 2026 before improving when do you expect the equity accounted in this to reach breakeven at net profit level? So we consider -- yes, you're right. I mean, from a technical perspective, we have recorded the effect of Portuguese losses as part of EBITDA, and we recorded part, the biggest -- the largest part of Belgian losses as part of gross profit or loss that we reported. So this year, 2025 was a one-off year because it has recorded all of the costs of Portugal and most of the costs of Belgium. And the Belgian costs were not just the cost related to 2025, but because of the equity accounting method. In fact, these are cumulative cost that we recorded over the last 3 or 4 years. These 2 from the impact point of view, I'm not going to repeat themselves in 2006. So from this point of view, you have only a positive ramp up, and we do not expect the negative results to widen in both markets. Moreover, we are working to increase sales, both in Portugal and in Belgium. And we are working to contain and to reduce costs so that overall, our situation is improved. As I did mention, we do expect at least 10% EBITDA growth on a group level in '26 in comparison to '25 taking into account all of developments, Romania, the Spanish positive development, but also the improvements in costs in Portugal, like I'm discussing. I sincerely hope it's helpful, and thank you very much for the question. Question number three, within the increase in net financial costs, how much is attributable to the end of interest capitalization in Portugal? And how much relates to one-off refinancing charges? I would just give you a very general guidance. I think the end of interest capitalization in Portugal is somewhere in the EUR 20 million to EUR 30 million range, closer to the higher number. And the one-offs for the refinancing, I would say, in the area of EUR 10 million. You should also take into account that around EUR 10 million to EUR 12 million, where the impact of ForEx change that happened in Romania in the first part of the year and -- which has not impacted us in the second part of the year as the exchange rate was relatively constant. Question number four, given that Spain is structurally a much larger telecom market in Romania. How should we think about the long-term EBITDA potentially in Spain relative to Romania? Do you see scope for Spain to converge over the similar contribution profile over time? Well, thank you very much for the question. I think it's a very insightful and helpful. I will let also Marius to comment, but from my point of view, 3,000 kilometers away also having the benefit of being at the group level, the answer is yes. The answer is, yes, for a few times, so Spanish is bigger than Romania. There is scope for further efficiencies. And the certainly intention on our side to improve the profitability model to -- well, towards 30% to 40% margin area, not in the midterm because in the midterm, we expect it to be just over 30%. But on the long term, it certainly should converge towards the Romanian model. But yes, thank you very much. Marius, do you want to add more?

No, I think it's fair what you said, hopefully, from my point of view, Romania will continue to grow.

No, thank you. Thank you very much. And Portugal yes, all the markets. Yes. Thank you. The next question is from Alexander [indiscernible]. Could you please share some color on the competitive environment in Belgium, particularly regarding customer net adds mobile and broadband and whether you are seeing any change in traction? Are you currently tracking below, in line or above your targets. Well, we have not really set targets at least for -- at least to have certain milestones achieved in a certain time. It's not that the way it works. We are setting up a broad model. We are working to refine it. We're working to improve it, and we are working to continuously improve traction. So I think we are still early one. 2025 was an important year. We have launched 2 markets as a group, both Portugal and Belgium. And strategically, it's more important for us to focus on the Portuguese operations. From this point of view, we let Belgium find its way at its own pace and when it will improve, it will improve. Again, I think we are discussing this in a scattered manner across questions. I hope you follow the question, you follow our logic. The idea is we -- the long-term idea is, we know that the opportunity is right and correct will certainly find our way of growth there. We'll just not overspend before we do so. Question from Danny. Could you provide mobile breakdown in postpaid and prepaid customers of your operations in Romania? Well, thank you very much. We -- up until October -- well, up until November '25, 100% of our customers were postpaid only, we have acquired a relatively small portfolio of prepaid customers from Telekom Romania Mobile and I would say just as a reference number, the share of prepaid customers in our total portfolio is relatively small. It's in the area of 5%. And once again, they are all newcomers to our network, they all arrived just in the last 2 months, November and December. Can you please elaborate on the Belgium operation? A question from Stefan [indiscernible]. Well, I think we did touch on that. So it's a very general question, so we'll move on. But thank you very much. A question from Giovanni [indiscernible]. I have a few questions. What is the amount of undrawn commitment -- committed credit facilities accessible by the restricted group, except Spain. Giovanni, I was going to give you the full figure, but you wanted now split. So you're one step ahead. So -- but anyway, as of end of December, Spain had available EUR 100 million undrawn, and Romania had available between EUR 50 million and EUR 60 million undrawn. So yes, you were one step ahead, but I think I kept up this time. And by the way, this number, which is more than EUR 150 million for both countries, does not include the expected proceeds from sale of assets to Macquarie, which exceed EUR 150 million as of the end of last year. So overall availability of funds for the group is more than EUR 300 million as of the end of last year. I hope it's helpful. Second question, what is the amount of proceeds targeted from the IPO of the Spanish unit? Well, I wish I knew when we do the IPO and how much it will be, but it's too early to say, and we can't comment. Thank you very much. And third question, regarding the Sota footprint, what is the amount of proceeds that you still have to receive and when will they be received. So yes, I did talk on that just a question before. Does access the network on a pay per line basis or Digi have to guarantee a minimum level of penetration on such Sota footprint? Marius, can you please comment on the Sota footprint, whether we pay on a per line basis or whether we guarantee a minimum penetration? So apology I think -- yes, sorry, sorry.

So the answer would be, yes, for both, we pay per line. Nevertheless, we have a minimum guaranty level agreed for footprint, which we are constantly overachieving. So from the point of view we are paying per line.

Yes. Thank you very much. I think it's very helpful. And the last question from Giovanni. The Group's net debt has increased by EUR 160 million in the fourth quarter of 2025 versus third quarter 2025. Can you please bridge the main items that drove the change? Yes. Sorry, it's a bit too detailed, but -- and we don't have the numbers at this moment. But if if you remember, we acquired Telekom Romania Mobile for EUR 40 million in Q4. we've paid certain mobile frequencies in some of our markets. These are the bigger outstanding items. And of course, on top of that, the normal CapEx and the normal efforts that we do of growth. Sorry, I can't help you more at this moment. Question from [indiscernible] Pinto Miguel. How are conversation with Lisbon Metro? Do you have any news regarding the Blue and Green Light timeline? Or it was said that the Metro will give you access until the end of the year? Thank you very much, [indiscernible] for the question. I know that this action is ongoing. I don't have more details to brief you on this call. So -- but we have launched 40 or so close to 50 stations in Lisbon, Metro by the end of last year, beginning of this year. Yes, the discussions are continuing, but I have more visibility at this moment. Another question, what is the overall investment in Portugal in 2025. So I think we will provide these numbers once we issue the full year report. And what kind of investment I expected in 2026. We can only comment at this moment that our project in Portugal is fundamentally substantially invested in and most of it is also paid. So from this point of view, we have, how should I say, no pressure or no further -- not significant further requirements at this moment. We do expect CapEx to decline in '26 in comparison to '25, but I will not provide further or more detailed guidance. And thank you very much. It's a question from [indiscernible]. It's a question for Marius, excuse me. So it's about Spain. Can Digi Spain compete with the triple play fixed mobile TV offers of its competitors, how important is for both?

Thank you very much for your question. We historically competed without pay TV services. So Spain is different from Romania from this point of view in Portugal. It's a market that depends less on pay-TV services in order to be able to grow for fixed broadband and mobile services. We are offering since, 1 year ago, Pay TV services, but without very exclusive content like football or specific type of movies or series. And with that, we are able to compete, most of the Spanish customers access TV also through terrestrial digital television for free. So the market for Pay TV, it's only a segment for the market overall. So we think we can compete without having access to premium content to be able to grow most for fixed broadband and mobile services.

Okay. Thank you. Next question from Andre [indiscernible]. At the beginning of the year, you were guiding on a consolidation of Belgium in '25. Why is it still not the case? So I think this is something we discussed in our last quarter call. Ownership wise, at this moment, we own approximately -- one second, 70%. So close to 80% of the Belgian operations. However, because it's a partnership, as I mentioned a bit earlier on the call, the IFRS standards, the auditors would simply not allow consolidation. So this is the reality of the rules in terms of -- for consolidation. So it's not our choice. A question from Piotr. What was EBITDA after lease in Spain in 2025. So I will answer this question. It was EUR 175 million. And EBITDA before lease in Spain was roughly EUR 210 million. What CapEx and adjusted EBITDA in 2026, do you expect to be recorded by the group? So for -- so Piotr, I broadly said that we would expect at least 10% growth in EBITDA and approximately 10% decline in CapEx. So this is our expectation for 2026. So thank you very much. It's a moment of silence. Thank you very much for the quality questions that we received. It was very helpful, and thank you very much again for the opportunity to to explain in detail our results and our operations. We will end the call here as there are no more further questions and we will meet you all in mid-May when we will discuss the first quarter results. Thank you very much. Thank you, and bye-bye.