Solaria Energía y Medio Ambiente, S.A. (SLR) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Solaria 2021 Full Results Webcast. My name is David Guengant, the Head of IR of Solaria. And I'm joined today by Arturo Diaz-Tejeiro Larranaga , our Chief Executive Officer. During this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectation as of today. During this presentation, we will begin with an overview of the results and the main development during the period given by our CEO, Arturo. Following this, we will move on to a Q&A session. [Operator Instructions] So thank you very much again. And I will now hand over the word to Arturo.

Thank you, David, and thank you to everyone joining this conference call. I hope that all of you and your families are keeping healthy and well. 2021 was a record from results point of view. We have grown in all the numbers of the company. We have grown our EBITDA, we have grown our revenues, we have grown our net profits. And I think the company is accomplishing with our business plan. And next years, we will continue growing as previously. In order to start, we are going to talk about the situation of the solar in Europe and globally in the world. You know the situation, especially the new situation that -- the dramatic situation that we are living in the center of Europe and with Ukraine and Russia. I think that today, it's more important than before to increase our presence and to increase the installation of renewables, in Europe, globally. We need -- we must develop renewables in Europe. It's not only an issue, an economic issue or generation issue, I think that if we want to maintain the European Union status, it's necessary to grow the volume of gigawatts of renewables. And you know that today, we have in different countries, presence. Solaria is present in different countries, in Spain, in Italy, in Portugal. The 3 countries are growing around solar. Spain today, we have a global target for 2030 of 40 gigawatts, 39 gigawatts. Probably government will give update soon about this global target. Our feeling is that they are going to grow to 50 or even more. Italy. In Italy, you know that the global target from the government is 52 gigawatts by 2030. It's the same, probably, it will be updated in the next month. Because all the countries needs more gigawatts. And today, it's more important to understand that the only solution comes from solar, solar and wind. It's the same with Portugal. Today, the global target is 10 gigawatts by 2030, and probably, we will see more. Price of electricity, you know the situation better than us. It's dramatic, from price of electricity, all the countries are suffering the global situation. And today, you have an average price around EUR 250, sometimes even in countries like Spain and Portugal, something more like EUR 277 per megawatt hour. That is an impossible price to maintain in the medium and long term. Solution: Solar and wind. And I think that Solaria will be part of this solution. And we will explain during this presentation. Solaria. Part of the solution, as I have mentioned, we have great know-how. We are in the best places from solar point of view. We are in the south of Europe. If you have followed the company during last year, we have repeat the same strategy: Europe, Europe, Europe. We need to find solution for Europe, for the situation of the energy supply in Europe. And we have explained to the markets during last years that it's critical to increase the volume of gigawatts that should come from renewables, especially from solar. We have developed, during last year's, really good pipeline in the south of Europe, Spain, Portugal, Italy. And now we are -- on the development side, we are constructing, we are building and we are trying to be part of the solution for Europe. From profit's point of view, as you know, project IRR that we are getting is more than 12%. Our CapEx is one of the best CapEx in the global markets of EUR 0.40 per watt. And our OpEx per year is better. We are improving all the years, our OpEx. More volume in the same areas. Obviously, we are reducing a lot of our OpEx. And of course, our strong expertise, local focus is giving to us important advantage. If you compare with new players that are trying to entry or utilities or large oil groups that want to enter in this business. Numbers. During last year, as we have explained, that Solaria is a growth company, but not only a growth company, it's a profitable company. And here, we show the results. We have increased our net sales, our EBITDA and our profits, before taxes and after taxes. And our growth is close to 3 digits figures in all the numbers. I could say that probably -- and in order to give some guideline during 2022, we are going to grow our EBITDA following 3 digits figures. It's like this company is going to maintain the growth next year. It's one of the key points of our strategy, growth with profits. Today, we have more than 800 megawatts connected to the grid and we have more than 2,000 megawatts under construction. And we will add some more megawatts under construction in order to achieve the global number that we have mentioned always to the markets. Important points that we want to mention during this short presentation. First, financing, secure, to reach 2 gigawatts for this year. Today, we have announced to the market a global project finance deal of EUR 375 million for more than 700 megawatts, with 3 important bank groups. And I think that the conditions that we have closed are exceptional: 16 years; global nonrecourse debt, always project finance; and with a really good and competitive cost. The final cost was around 1.9% fixed interest rate for 16 years. Remember that this, nonrecourse debt. It's like with this deal, we are giving strong visibility to all of our construction for 2022. It's like money today is not a problem for Solaria, for the construction plan of Solaria during 2022. And next deal that is extremely important I'm going to mention is rotation. Is the rotation of capital that we have done. It's the first rotation that we have done in the business plan of Solaria. It's a small rotation, not significant, but good volume with good numbers. In 2 PV power plants of 50 megawatts, 100 megawatts, we have rotate 30% of the equity of the shares of the companies. The final price is EUR 1 per watt. It's under construction. What does it mean? It's not exactly under construction. It's under development, and it will be construct probably in 2023, for being connected in 2024, first Q of 2024. It's a good price. It's EUR 30 million of cash that we are going to receive, fresh equity. Important because it's in the north of Spain. It's in the Basque area -- in the Basque country. And it's extremely important in our view because it's going to give a good method of valuation of the assets because EUR 1 per watt for assets in the North of Spain that will be connected in the first Q of 2024. Then we have included in the presentation new fresh equity. What does it mean here? In this slide, what we have tried to include is 2 important issues that has happened recently. First is a new law that the Portuguese government has approved. As you remember that, in 2017, we achieved in the Portuguese standard process option, we get a PPA with the Portuguese government for using a price of EUR 19.95 per megawatt hour. Our promise to the market was to report, to give to our shareholders, a minimum project IRR of 5%. The Portuguese government has approved a new law that says that these assets needs to be connect for August 2023. And the law say that if you connect previously, you will receive pool. What does it mean? Solaria is going to reside pool from now until August 2023. What does it mean? It's like we will receive, during 12 months, the same CapEx that we are going to invest globally in the asset. It's like we are able to pay all the project finance that we have received for constructing this asset in only 12 months. It's a great profit, not including our business plan at the origin. Obviously, project IRR is not 5%, and it's an exceptional new for Solaria, EUR 20 million of additional cash. And the infrastructure business, we have included here an estimation of EUR 30 million in the next 3 years. I think that is a conservative number. Our infrastructure business is growing a lot and is going to give good news and good surprise to the market. And we are investing in grid, in substation, we have done in the past and we continue doing. It's important from a strategic vision and a strategic point of view because it's something that give to us control of new investments in renewables. And at the same time, it's going to generate cash. Numbers, I'm not going to spend a lot of time here. As I have mentioned, we have doubled practically all the numbers during this year. And hopefully, next year will be the same, and the next years, I could say. And it's, I have mentioned, growth company that combine growth with profits. Of course, reasons. Because we are extremely efficient. It's because, if you see, we maintain a strict operating cost control, it's critical for us. We always repeat the same, CapEx, OpEx, cost control is one of the key points of this business, to be extremely strict in the control of cost. And I think that the expertise of Solaria and our knowledge and our staff is responsible of the successful. Of course, our leverage, our net financial debt versus EBITDA is improving per year. Probably in the short term, even during this year, we could achieve the investment-grade concept from net debt to EBITDA. And we are going to improve these numbers in the next quarters. And why? Because we are increasing a lot our EBITDA, and we are more efficient in CapEx. At the end of the day, it's like we are improving net debt-EBITDA value. And from a cash point of view, we have increased the cash of the company. Cash is not a problem today in Solaria. We are investing in CapEx. And we are growing, and at the same time, we are generating cash. Debt structure, project finance. As you know, practically, the 90% is project finance, fixed interest rate and decreasing this average cost per year. The deal that I have mentioned, less than 2% of fixed interest rate. And today, the average cost is 2.5%, but probably in 2022, we are going to improve. ESG. As you know, when we mentioned ESG, Solaria probably is the word that define ESG concept. And we are doing strong efforts in order to improve our rating, our situation around ESG. About ESG, I think that we need to think about the ESG concept and this crisis that we are living and with Russia and all the players, give an idea about what does it mean when we talk about ESG. Solaria is real ESG, solar, green activity, social responsibility. And we are seeing now a lot of players with interest, global interest, that probably are not ESG. In Solaria, and I think that is a critical point for us, we will give -- we can give to all of our shareholders trust that they are investing in a real ESG company. Portfolio. As I have mentioned, we continue growing. We have constructed close to 400 megawatts during this year, 2021. In 2022, we are going to multiply this number. And we continue constructing with really good CapEx and OpEx. And I'm not going to spend a lot of time here because the guideline -- the global guideline for 2022 is to finish with 2 gigawatts connected to the grid. 2 gigawatts that probably, these 2 gigawatts are going to generate this year, probably our mix merchant PPA is going to stay in 70% PPA, 30% merchant. It's like we are going to increase our exposure to merchant. We think it's a good idea. You know the situation of merchant prices. And we want to maintain a mix of 70% PPA, 30% merchant. Trillo, we are -- and we have under construction. Trillo is our key project, as you know. Garoña, hopefully, in the next month, we will start with the construction. We have included in the presentation, Q4 of this year. But probably, it will be before of the Q4 of this year. Hopefully, we will start construction in the second half of 2022. We are going to stay focused, especially in large-volume PV plants like Garoña or Trillo or Villaviciosa that give to us volume, good CapEx and good OpEx. Expansion, international expansion. That is one of our key points. It's critical. As I have mentioned, Europe needs to find solution. We have repeat during the last 2 years, it's important to supply from the south to the north, solar and electricity. We will be part of the solution, south to the north solar electricity. And we believe in this area. And we are investing in Portugal, Italy, Greece and South of Europe. In Italy, the good news is that probably in the Q4 of this year, we will start with the construction of 40 megawatts. And it's important for us because it will be the first important project under construction in Italy. It's like the beginning of Solaria in Italy. And in 2023, the explosion of Italy will come. And for us, Italy is critical. We are spending a lot of efforts in order to grow around pipeline, land and all the issues that we need for constructing our PV plants. And hopefully, 2023 will be the explosion for Italy. Today, 2022, 40 megawatts that we will start. Portugal. In Portugal, I think it's important to talk about innovation. Floating solar PV, the Portuguese government is going to arrange several tenders based in the floating solar PV technology. We will be there, and hopefully, we will obtain place and position in the tender process. We are growing, will of Portugal is like Spain, and we think that is a great country for growing. We are -- we have asset functioning, as I have mentioned. And hopefully, in the short term, we will add 440 megawatts. Of course, in order to finish, I think that in order to give a global guideline of the situation of the company, probably on May, we will arrange a Capital Markets Day. We have a good surprise to present to the market, good news for shareholders. And not including any business plan, but will be exciting. May, we will arrange a global Capital Markets Day. And we will continue with our growth. And Solaria is going to be a player focused in solar with growth, with profits and with innovation. Innovation is one of the key points in our strategy. If you want, we could go to questions.

So thank you, Arturo. I will now open for a Q&A session. And once again, thank you for your time. The first question is coming from Banco Santander from Oscar Nájar. Regarding the today announcement of financing, EUR 375 million for 736 megawatts. Are these amount 100% of the CapEx needed? So are you financing everything with debt? The implicit CapEx per megawatt is EUR 0.51, is this a real CapEx for the project? If your CapEx is lower, what are you going to do with the extra cash?

Thank you for the question. Yes, this financing cover more than 100% of the global CapEx. Yes. Our CapEx is EUR 0.4. And we are going to receive project finance that cover, I don't know, EUR 0.50-something. It's like we are going to generate an excellent of cash. And believe me that we are going to use correctly. And we are going to obtain strong profitability of this additional cash that we are generating. But obviously, yes, the project finance is covering today more than the global CapEx that we need.

The next question is coming from Jorge Guimarães from JB Capital. The first question is can we give an update on the status of environmental permits for key projects in Spain? All the capacity for the 1,250 megawatts under construction already has all the permits? Second question is estimate for CapEx for 2022. Third question is clawback. Do you -- are you afraid that capacity operating under merchant condition in Spain may suffer some kind of clawbacks? Not only the cash clawback. And the last question is how much of your CapEx have you already spent for the asset today to be connected in 2022?

Of course, for the key projects, we are fully permitted and under construction. And key projects, as you know, is Trillo and Toro. When we talk about Garoña, we are waiting for final approvals. Hopefully, we will achieve in the second half of this year, but even we could obtain previously. For 2,250 megawatts, all that we have included under construction, some of the projects need additional permits, and we are working on it. We are -- when we say that we are under construction, it because we are developing the substation, we are acquiring materials. It's like we have done previous works, but some of them especially needs final approvals of local authorities. And of course, CapEx. The CapEx, as we have mentioned in the third quarter presentation, our CapEx for 2022 is EUR 0.4. And it was fully booked and it was closed a few months ago. I have explained in the third quarter presentation that, unfortunately, we suffered a strong delay in Trillo, but the good point is that we signed a lot of contracts associated with Trillo on April of last year. It's something that, the good point -- and you don't have good points in these kind of delays. But the good point is that we have closed cost -- we have fixed cost using prices of 1 year ago. And the CapEx evolution, we see better prices on modules, all quarters. We are talking with all the players, with all the suppliers. And of all kind of materials, we are seeing improvements. It's difficult to talk about this because you have a lot of noises in the market, not real noises. But at the end of the day, it's not an issue -- it's something that I always explain. It's not an issue of demand. It's like Chinese players have tried to increase prices, but at the end of the day, they don't have demand that support this increase on prices. And our projection for the future around CapEx is extremely positive, as always. We think that module evolution will continue, and we will see better CapEx in next years. Clawback Difficult to say if government is going to approve something new because it's the same. You have a lot of noises in the market. Obviously, price of electricity that we are paying is crazy. And in my view, it will be worse in the short term because we will see the situation of the Ukrainian conflict in the short term, but Russia managed and control the cost of energy in Europe and we will suffer more dramatic situation in the short term. Obviously, if we suffer more, talking about price of electricity, governments could be obligate to take new measures or to define new laws. In all cases, I think that European Union, the intention of European Union today, especially today, is not to damage the growth of renewables. Because if they damage the growth of renewables, they are going to destroy European Union. It's the only solution. And I think that if they approve new clawbacks or similar, is not going to be associated with renewables. It's our feeling.

Next question is coming from Eduardo González Martín from Banco Santander. His first question is, has Toro and the other 494 megawatts all the permits? I think Arturo already answer to this first question. Second question, given the permitting delays suffered in the last quarters, do you still see the 6.2 gigawatts installation target by 2025 feasible? And the second question of Eduardo is can we explain more in detail how we expect to increase merchant exposure up to 30% in 2022?

About delays, in my view, the final target of the company is to obtain 18 gigawatts and previously 6.2 gigawatts. In the middle of the way, we are fighting. It's like -- for me, it's like, of course, we have had a delay, and of course, we should accept it. No, no, no. It's not the game here. Our game is to achieve the 6.2 gigawatts that we promised to the market. And during next year and this year, we need to recuperate our delays. It's not easy, obviously. But we are doing a strong efforts in order to recuperate. Our business plan is extremely serious for us. we have defined global targets. And like many investor of this company, I have a lot of shares of this company. In my view, when we talk about 18 gigawatts, it's 18 gigawatts, not 16 or 15. And when we talk about 6.2, it's 6.2. It's like, of course, unfortunately, we have suffered COVID. Spain wasn't prepared for all renewables, delays. But the good point is that large PV assets like Garoña or Trillo are entering. And this is critical because it's like we are shooting with a strong weapon. If we construct at the same time, 600 or 700 megawatts, it's like an important advantage, if you will compare the situation of Solaria 2 years ago, talking about PV assets of 20 megawatts or 30 megawatts. And we are optimistic about the final situation of our business plan in 2025. And we think that we will solve all of our previous delays. About merchant. Of course, it's extremely difficult to sign additional PPAs today. And we have a strong demand, people that want to enter new deals. But honestly, we have detained all of our activity around PPAs because which is the correct price? Which is the correct price? Is EUR 40, EUR 50, EUR 60, EUR 70? I don't have visibility in the medium term to say that EUR 50 is a good price or EUR 60 or EUR 70. But I don't know if the conflict between Ukraine and Russia is going to be solved in the short, medium and long term. And obviously, Russia dominates price of electricity here in Europe. In the short term, it's impossible to change. Why? Because we didn't our homeworks, and now we have this situation over the table. In the short and medium term, volatility will define the situation of pool prices during next quarters. Our idea, to maintain 70-30 merchant-PPA.

Next question is coming from Bosco Ojeda from UBS. First question is regarding CapEx for 2022. I think we already answered to this question. We are still at EUR 0.4 million per megawatt and we are not expecting much increase in CapEx. We are seeing a small decrease in PV modules below EUR 0.25 million per -- $0.25 million, sorry, per megawatt. The other question is expectation on prices. Do we have any approximate range of electricity or PPA price for 2022, 2023?

About CapEx, I think that is something that we have discussed during last years. The reason, because Solaria is probably the most efficient company from EBITDA and cost point of view. If you see our EBITDA in our numbers, it's like you have the answer about our cost. At the end of the day, one of the key points, the critical points in this business, is to manage correctly CapEx. If you have the expertise, if you know about this business, you are able to be extremely efficient, Solaria. Other competitors, I don't know. New players, oil groups, utilities, is something that we have discussed in a lot of occasions. I listen a lot of comments about CapEx. And I have listened during these last 3 years, a lot of different message. In my view, without knowledge about the real situation of the energy markets and about the real situation of the solar markets. Our view today we're at EUR 0.4. And hopefully, in 2023, 2024, we will be able to improve. About PPA prices. As I have mentioned previously, difficult to predict, difficult especially to say that EUR 50 or EUR 60 is a good price. We have forward the tables on proposals, talking about this kind of prices. And you know that we will be in a tender process. I mentioned in the third quarter results presentation that we stay in the Spanish standard process with price over EUR 70 and EUR 75. In our view, price of electricity continues, you will see even worse price of electricity. It's like more than EUR 250 or more than EUR 300. This situation is not going to find a solution in the short term, it will be worse in the next quarter probably. Difficult to say this is the correct PPA price. We have over the table today, proposals. And if you see the curves and the projections of PPAs, price is improving and, of course, good for us because today, demand is growing and prices are improving. But we maintain today, we are quiet, and we are waiting before to sign new PPA deals.

Next question is coming from Manuel Palomo from Exane BNP. In -- could you please give us your view on potential extension of the gas clawback? And also, could you share your view on the carbon clawback? And final question, few quarters ago, you mentioned you might be thinking about providing with some EBITDA or net profit guidance. Could you share with us your expectation for 2022?

Of course, extension of gas clawback, I think probably, government is going to do. Why? Because situation is not changing. And obviously, my view is that they are going to continue. Carbon clawback, it could happen. And even not only carbon. Nuclear. Some people are talking about nuclear clawback. So like, as I have mentioned, situation is worse than previously we have imagined, and it's not going to improve. And governments are completely -- are looking for solutions that are not solutions. Clawback is not a solution. From a legal point of view, be sure that will be completely canceled by courts in few years. Will be completely canceled. But they are looking for short-term solutions like always in European Union. And of course, short-term solution is not a good solution. About guidelines, I have mentioned during this presentation, it's not an official guideline. But I have mentioned that 3 digits growth is not bad for us. And the official guideline of the company is 2,000 gigawatts -- 2,000, sorry, megawatts of PV assets connected to the grid. And we think that we could maintain growth using 3 digits figures.

Next question is coming from Jorge Alonso from Societe Generale. Can we provide any more color on CapEx? Are panels' price going down? Are they expected to fall any time soon? Then the second question is regarding the permitting. Due to the delay in commissioning on permitting issue, can you consider that those issue will remain in coming years? Do you see that the government can take some action to speed up permitting and how? If not speaking of permitting, can you say that the 2025 target could be more visible in 2026?

CapEx and module situation. It's improving, as I have mentioned, and we are touching price. It depends on the day because it's changing a lot depending on the day, but $0.24 per watt, $0.24-something with Tier 1 players. And a few weeks ago, we touched prices of $0.25-something, $0.26. Is like we are seeing improvements, especially because we don't see demand answering to these suppliers of modules. It's like they are not fully booked. This is critical to understand. At the end of the day, and it's complicated to explain in a conference call, but China has tried to introduce inflation in the system. Not only modules, in all the materials, price, commodities, logistics, but it's not associated with demand. And this inflation is not associated with demand, it's associated with the offer that China is doing to the world. And in my view, it's not a real situation. And obviously, they have capacity, manufacturing capacity that is free. It's like it's they are not fully booked and the situation is changing progressively. It's difficult to say if we will achieve $0.23 in 2 weeks or in 3 weeks or in 1 month or 2 months, difficult. But the projection is reduction on prices. Permitting and government actions. Yes, the government wants to approve an accelerated process. But at the end of the day, my view, it's impossible, unfortunately. Why? Europe needs, they should approve something because we need immediately gigawatts. Even I could say that we need to interconnect all Europe. I know the opinion of French players and the French country, but we need to interconnect full Europe in order to solve the situation, but it's not realistic. It's extremely difficult to approve an accelerated process for permitting because you depend on local authorities, community, regional and the constitution of Spain and other countries like Italy protect the rights of regions and local authorities in the permitting process. It's like it's impossible. When I talk with people that talk about nuclear could be a solution. To obtain an environmental permit in Europe for a nuclear plant, you could spend 15 years, 16 years. It's like it's impossible. When people talk about new nuclear capacity, it's like they are talking about traveling to the moon. It's not realistic, not a solution over the table. I think that if you talk about new nuclear capacities, it's like you are talking about Russian gas. It's like I'm going to depend on Russian gas, I will continue with this situation. But in order to answer your question about 2025, we live with this situation. It's like we are not awaiting a miracle from the government with an acceleration process on permitting. When we have talked about 6.2 gigawatts 2025, in all the numbers, we are including this actual situation, the worst situation, if you want, difficult to achieve permits.

The next question is coming from Chris Leonard from Crédit Suisse . Is there any update that you can give on the progress for environmental impact studies to enable connection rights for a royal decree of 2020? And the second question is what is the blockage stopping/keeping install capacity flat between first half of this year to end of this year at around 800 megawatts?

Environmental permits and the new law that the government approved a few months ago delaying the April final state, the April due date. Of course, I think that even the government today, with the actual situation, they are not able to take a decision. The projects are in the same situation. It's like a few months, it's not going to change the global situation of all the projects block in the system. And difficult to solve. I don't see -- it's the same that I repeat in all the calls and in all the conference calls and in all the interviews, all the -- when people ask to us. I don't see an enormous volume of gigawatts entering in the system in the next quarters. It's not realistic. It's -- if they don't detain the speculation and people moving papers, it's like new projects -- to entry with new projects in the system will be extremely [ took ]. The good point for us, our assets, the value of our assets will grow because you don't have too much assets with good quality and good situation. The value of our assets is enormous. And unfortunately, we are not optimistic about connection -- global connections in Spain. And the second question, it's?

Why we are flat in -- at 800 megawatts in the last 6 months?

Of course. We haven't complicated too much our presentation. The message that we are giving in this presentation is like we are going to install all at the end of this year. Obviously, it's not going to happen. Obviously, a part of this, hopefully, will be installed before the end of this year. But we prefer to be conservative and our guideline and our global target is to finish this 2022 with 2 gigawatts connected to the grid.

Next question is coming from Manuel Palomo from Exane BNP. Looking at your installation cost guidance and the amount achieved in the project finance, it looks like you get well above 100% leverage. Is that right? And asset rotation, I understand that the multiple is EUR 1 million per megawatt enterprise value, right?

Yes, we are achieving more than 100% of our CapEx. Our CapEx is EUR 0.4 and the global deal cover, I don't know, EUR 0.50-something, EUR 0.53 or EUR 0.54, I don't know. But it's like we are going to receive more cash than we need. And the valuation of our assets is that today it's not a real asset, it's a project under development, will be connected to the grid in the first Q of 2024. And the value is EUR 1 per watt for the global asset. It's like our new partner is going to invest EUR 30 million of equity in this PV asset.

Next question is coming from Philippe Ourpatian from ODDO. The question of Philippe is, according to the small delays in the last quarters, if we maintain our target for 2022, 2023, 2024, 2025 and going on.

As I have mentioned, our global target for 2022 is 2 gigawatts connected to the grid. And our global target until 2025 is 6.2 gigawatts. And we maintained a global target for the company. As I have mentioned, we are trying to do a strong effort in order to recuperate the delays that we suffered during the last 2 years. Hopefully, we finish this year with 2 gigawatts, where probably we will be the key player in the Iberian region from solar perspective. And we will see.

Next question is coming from Alberto Gandolfi from Goldman Sachs. For the 1.25 gigawatts under construction, what percentage of the CapEx is secure? And what percentage are the fixed price? And what percentage of the revenue are already contracted? The second question is, for this 1.25 gigawatts, what percentage is merchant and what percentage is PPA? And the third question is why we are not signing PPA in the last months?

About CapEx, as I have mentioned, we have secured our CapEx for 2022. About merchant exposure, is approximately 70%-30%, approximately. And about new PPAs, it's like I have explained. It's a difficult moment to sign additional PPAs. We don't know exactly the correct price. Of course, the answer for this comment could be, of course, if you get a good project IRR, why you don't sign? Don't worry about price of electricity. Yes, it's true. It's true. But suppose 1 year ago, we closed using EUR 65 per megawatt hour. Today, EUR 65 feels like nothing. And of course, price of electricity, we think that it's going to continue growing. And we prefer to maintain good merchant volume. We have really good PPA deals, a good volume. And we are going to finish this year. If we have a good opportunity with good price, who knows? We could sign additional PPAs. But we maintain conservative position today. We prefer to see movements in the pool market, in the merchant market. It's difficult to predict prices.

Next question is coming from Fernando Lafuente from Alantra. Regarding the announced sales of the 30%, what will be the timing of the cash inflow? Is this EUR 1 million per megawatt already closed? Will disposals become part of the business model of the company? Also of minority stakes? Will you consider selling operating assets?

Of course. Theoretically, during 2023 and 2024, we will deliver this deal, probably 50% during this year, 50% next year, but it's difficult to say 50% or 40%, 60%. It's an EPC contract at the end of the day. We are going to supply the PV asset, and the final schedule is to connect this asset the first Q of 2024. If we are able to connect before, we will do. But it's not critical to connect in the next 12 months. It's a strategic partnership. I think that's extremely interesting. And we will have more collaboration with them in the future, I'm completely sure. If we are considering to sell operating assets, the answer is, today, not. No. Why? Because as I have explained, the value of the asset today is growing, and we have a really good cash position, we have a good mix of equity/debt. As I have mentioned, our net debt versus EBITDA is going to improve. Probably, we will achieve investment-grade rating net debt to EBITDA. From net debt-to-EBITDA point of view, it's like globally, the company, the debt situation is extremely good. We have cash. And on May, as I have mentioned, we will arrange a Capital Markets Day. We will present to the market a new business, a new area that could give cash, a lot of cash, to the company. It's like cash today, we are not extremely worried about this. In the future, you can't say never because who knows? Value of assets is growing, and we have a lot of players that wants to entry in the asset business, and we will see opportunities. But in the short term, in the extremely short term, we don't want to sell assets.

And maybe a last question. The last question for today is coming from Henry Tarr from Berenberg. Do you see the supply chain issues improving through 2022? Are prices for solar panels impacting the total CapEx outlook?

The world changed extremely fast and complicate to predict nothing. And you can imagine, you see that world change all days. And we live in a crazy world. And my view is that from a technology point of view, modules should -- must reduce prices, cost of production. Because from a technology point of view, the manufacturing process of solar modules is better, all quarters is improving. And we are improving the efficiency, the final efficiency of the solar module. At the end of the day, if you have more efficiency in the same size, you reduce the cost of the module, the euro per watt. But the situation, the global situation, and not only associated with solar, is complicated. And I don't know if, in 2 quarters, China could increase again logistic cost or similar. Our projection, our information after to talk with a lot of players, I think that with all the players of the market that supply components, supply modules, supply inverters, supply truckers, our feeling is that they are improving cost, they are going to improve cost in the next quarters. Suddenly, the world could change. Today, I'm -- I can't secure nothing because world is changing all the weeks.

We have a lot of questions, but maybe a last one from -- coming from Chris Leonard from Crédit Suisse. What is the new area of the business that you will speak about in the Capital Markets Day?

Surprise. Surprise. And it will be a surprise, a good surprise for all the investors.

Okay. So thank you, everybody, for joining today's call. And I will leave the floor to Arturo.

Thank you very much for being part of this conference call. As always, our Investor Relations team will be available for any additional information you may require. And thank you, and have a great evening.