Edp Sa S/Adr

Good morning, ladies and gentlemen. Thank you for attending EDP's first of 26 results conference call. We have today with us our CEO, Miguel Stilwell d' Andrade, and our CFO, Rui Teixeira, which will present you the main highlights and our strategy execution and first of 26 financial performance. We'll then move to the Q&A session in which we'll be taking your questions, starting with the written questions that you can insert from now onwards at our webcast platform and then by phone. I'll give you now the floor. to our CEO, Miguel Stilwell d' Andrade.

Thank you, Miguel. Good morning to everyone and welcome to the EDP first half results conference call. I'll jump straight into slide three and start off by saying that EDP delivered a very strong first half of 2026. We had a recurring EBITDA of around 2.7 billion euros, so that's up 5% year on year. We had a recurring net profit at around 0.8 billion euros, so broadly flat. Andrade, Rui Manuel Rodrigues Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra But also growth in Brazil. So this is an important confirmation that the regulatory framework in place now is really translating into much higher investment, better returns, and stronger earnings contribution. At EDP Renewables, EBITDA increased 8% year-on-year, or 12% excluding foreign exchange. And that's mostly supported by the growth in the US and improved asset rotation gain. And in the FlexGen and clients, performance remains sound. It's supported by flexible generation in Iberia. Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Going into depth on electricity networks. So this is one of the clearest examples we have of improved visibility that we have across the group. So electricity networks investments increased 25% year on year in the first half, reached 555 million euros. The acceleration is mostly in Portugal where capex increased 40%, but also in Brazil where it increased 20% and in Spain where it increased 4%. Importantly, this investment growth is supported by positive regulatory development in all the geographies. In Portugal, the investment plan for 26 to 2030 increased by 66% to 3 billion euros with an all-in pre-tax return on RAB of around 8% for the 26 to 29 regulatory period. And in addition, the government has ordered a study on the rationale for reinforcing the climate adaptation investments and giving more resilience to the networks, and that may support Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra on the 2027 to 2030 investments. And so generally, we consider it positive news. In Brazil, we now have a very strong long-term visibility, as you know, with both EDP Espirito Santo and EDP São Paulo electricity distribution concessions extended for 30 years. So overall, networks clearly moving into a new investment cycle with attractive regulated returns and strong visibility across Iberia and Brazil. Going to slide five, you can see Here are some of the key trends in Portugal. And I think the first thing is to really highlight that Portugal continues to stand out as a market where the demand growth is accelerating, supported by electrification, population growth, electrical vehicles, heat pumps, air conditioning, but also by the development of data centers. And we expect electricity demand in Portugal to grow at around 4.5% CAGR between 2026 and 2035. And as I mentioned earlier, this growth driven by just a broad set of factors Andrade, Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Andrade, Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra On data centers specifically, Portugal is positioning itself as an emerging hyperscaler data center hub. So there's a significant pipeline of grid connection requests. We have around 4.6 gigawatts already requested. That's the equivalent of roughly 50% of the current peak demand. We're also benefiting from a strong subsea cable connectivity and robust telecoms infrastructure. And we're seeing that advantage in action. Just recently, you may have seen Google Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra What we're seeing is a structural improvement in the value of flexible generation. You have solar and wind penetration increasing, and the system also needs backup and more flexibility. The integrated margin of FlexGen clients in Iberia has materially increased over the last decade, moved from 19 euros per megawatt hour in 2017 to 48 euros per megawatt hour in the first half of 2026, and we expect it to remain in the range of 40 to 45 euros per megawatt hour over 26 to 28 periods. This reflects structural increase in the price spreads between solar and non-solar hours between high and low demand periods and across months. These spreads increase the value of hydro pumping and CGTs as backup technologies. The ancillary services are also becoming more relevant. The ancillary services component reached 23 years per megawatt hour in the first half of 2026 compared with up to 18 years per megawatt hour in the first half of 2025. Looking ahead, reservoir levels remain above average in June, around 70%. and Ford baseload prices in Iberia at around 110 euros per megawatt hour for the second half of 2026 and around 67 euros per megawatt hour for 2027, while still remaining below that of other European markets, so still more competitive than other markets. The key point here is that we're seeing a structural increase in the results from our flexible and clients portfolio, highlighting the value of our integrated management. And that takes me on to slide seven, talking about retail electricity supply in Portugal. I just wanted to highlight this here. We've been reinforcing our competitive position on the retail side, the clear focus on pricing, on efficiency, and quality of service. EDP has around 4 million customers in Iberia. If I just focus in on the B2C business in Portugal, I just wanted to stress the impact that we're seeing from some of the commercial initiatives we've been implementing. Client losses have reduced materially. They're down 13% year on year. We have new client additions increasing 24% year on year. And importantly, we already saw a monthly net gain in March of 2026, which is a positive sign of stabilization in the client base. And this improvement has been supported by three key levers. First, a more competitive pricing strategy with offers in all of the key B2C electricity segments. Second, a very successful mass market communication campaign, which has helped improve visibility and competitiveness of our offers. and third, continued improvement in the customer experience and digitalization. And that's been complemented by targeted local commercial action. So the team has really pulled out all the stops here to deliver, I think, a very successful execution of the strategy. Overall, it supports the resilience of the integrated FlexGen and clients platform, and it reinforces our ability to capture value in both the generation and the retail business.

I move on to slide eight, EDP renewables.

The fundamentals here in the U.S., in particular, speaking about the renewals, is very, very strong. I mentioned this briefly yesterday. I mean, according to the July 2026 EIA outlook, U.S. power demand is expected to grow at around 2.3% CAGR between 2025 and 2027. This demand is expected to be sourced mainly by wind and solar, as they're the cheapest and fastest solutions to deploy, particularly as coal capacity fades down. This demand growth continues to support the increase in PPA prices. and it creates a very constructive backdrop for EDP renewables commercial activity. So since the approval of the one big beautiful bill, the 4th of July of last year, 2025, EDPR has contracted already one and a half gigawatts of new capacity through nine deals. The risk return profile of this contracted capacity is attractive. So just a couple of key metrics, around 290 basis points of spread IRR to WAC above the target of more than 250 basis points and 90% of the NPV is contracted. Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra De Almeida Côrte-Real, Paula Cristina Santos Guerra Finally, just highlighting that we continue to reinforce our domestic content procurement strategy. We have a diversified supplier base. We have increasing resilience supporting the execution of our pipeline and the projects under construction. So in the U.S., combination of strong demand, attractive PPA pricing, low regulatory risk, and a high quality pipeline continues to support our growth strategy. Moving on to slide nine, a quick update on the asset rotation secured capacity. So the asset rotation execution in 2026 is progressing very well. We continue to demonstrate the attractiveness of the investments we're making. I mean, very clear data points that we can show and show you all about the value creation of these investments. So far in 2026, we've signed asset rotation transactions representing a total enterprise value of around 0.9 billion euros, if we consider 100%. And these include 68 megawatts in Italy and 384 megawatts in the US of solar and batteries. As the US transaction in particular, I highlighted this also yesterday, was the first asset rotation transaction of a project approved post the big beautiful build in the US last year. And it really showcases our ability to capture value in this geography. So I think we were very happy with that transaction. Implied enterprise value. Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra On secured capacity, EDPR now has 3.4 gigawatts secured for the 2026 to 2028 period, which represents approximately 70% of the 5 gigawatt additions target. 2026 additions, as you know, are fully secured under construction. 2027 is already 80% secured, again, with very attractive risk-return metrics and an IRR 2x spread of around 285 basis points. And so overall, this provides very strong visibility on execution. while maintaining the discipline on returns and risk. And I'll stop there. I'll pass it now to Rui who will take you through the financial performance in more detail, and then I'll come back for guidance and questions. Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra De Almeida Côrte-Real, Paula Cristina Santos Guerra De Almeida Côrte-Real, Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra De Almeida Côrte-Real, Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques V

And we delivered another solid set of results, recurring EBITDA increasing 5% year-on-year to 2.7 billion, or 6% excluding FX. And this was driven fundamentally by the growth in the networks and the renewable segments. So let me break this down. Electricity networks now represent almost one-third of the group EBITDA and continue to increase their contribution to the earnings. This is a segment that is obviously delivering a very strong performance. with EBITDA of €109 million year-on-year, reaching €874 million. This was driven by the start of the new regulatory period in Iberia, combined with continuous RAP growth and operational discipline. FlexGen and clients EBITDA declined by €39 million to €808 million, representing 30% of the group EBITDA. This was primarily driven by the normalization of average electricity prices in Iberia, and higher ancillary services costs in the supply business that we also highlighted in the first quarter. These effects follow exceptionally strong conditions in the first half of last year, when we benefited from both hydro, very high hydro resources, and also high power prices. EDPR delivered EBITDA of 1.03 billion euros, up 73 million euro a year, supported by the capacity additions, particularly in the US, and also the capital gains from asset rotation. So geographically, around 90% of EBITDA continues to come from core low-risk markets, Iberia, North America, and Brazil. If we now move to slide 12, cost discipline remains a clear priority, as we have been highlighting for quite a while. Despite the continuous growth of the business, recurring OPEX remained broadly stable in nominal terms and declined on an inflation-adjusted basis. Recurring OPEX was down 3% year-on-year and 7% over the last two years Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra De Almeida Côrte-Real, Paula Cristina Santos Guerra This is actually a very sound first half of the year, although the negative evolution that is mainly driven by lower hydro volumes year on year, given that the first half of 2025 was an extraordinary quarter or semester, 41% above in resources versus the average, versus the 19% above the average in 2026. So while in 2026 we have a good performance, actually 2025 was abnormally high. Lower electricity prices in Iberia, with the average pool price in Spain declining 19% year-on-year. It's basically an average of 50 euros per megawatt hour this semester compared to 62 last year. Higher ancillary services cost in the electricity supply business, and this has been compensated by higher pumping activity that increased actually 4% year-on-year. Let me move now to the slide 14 and cover the network segment. Recurring EBITDA in this segment increased 14% year-on-year, reaching 874 million. Iberia was the main contributor. EBITDA of 536 million, up 16% year-on-year, reflecting the new regulatory frameworks, the RAB expansion, and obviously the continued efficiency in operations. Brazil also delivered a solid performance with EBITDA Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra De Almeida Côrte-Real, Paula Cristina Santos Guerra We can now move to slide 15 to EDPR, which we committed yesterday. EDPR delivered an 8% growth in EBITDA, 12% who exclude FX on the back of the capacity additions, particularly in the US, and also higher asset rotation gains, a 4% increase in generation, operational efficiency gains. And this partly was offset or was slightly offset by slower or lower prices in Europe, as well as lower Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra This was largely offset by improvement in other financial results that include higher capitalization of interest costs. Our debt profile remains very conservative, actually, with around two-thirds of debt denominated in euros and continued access to attractive funding markets, including our May issue of a seven-year, 750 million senior green bond with a 3.75% coupon. On net debt, it stood at 17 billion from 15.4 billion at year-end 2025. This reflects the temporary expected increase following the annual dividend payments, continued investment, and some of FX impacts. We maintain strong credit metrics, 20.4% FFO to net debt, and 3.5 times net debt to EBITDA. For the year-end, we remain fully comfortable with the guidance of approximately 16 billion considering that asset rotation and tax equity proceeds will be concentrated in the second half of the year. On net profit, just to finalize, recurring net profit reached 753 million, pretty much flat year on year, or 1% higher if we exclude FX. This is the result of higher EBITDA by 131 million versus the first half, 25. Slightly lower DNA and provisions in line with our investment profile. Miguel Stilwell d' Thank you, Rui.

So let's move on to the side on the earnings upgrade, which I think is what most people are probably waiting for. So based on the strong first half performance and also the improved visibility that we have on the remainder of the year, we're upgrading our 2026 earnings guidance versus the capital markets day assumptions and also versus the previous upgrade that we'd already given in the first quarter results. We're now expecting recurring EBITDA of around 5.3 billion euros and a recurring net profit of around 1.4 billion euros. So this is a 12% upgrade in net profit versus the CMD guidance range. The upgrade is supported by all three main business platforms. On the network side, it obviously reflects good execution of investment plans, better regulated returns and efficiency, as well as the favorable Euro-Brazilian Real evolution. On the FlexGen and clients, It's supported by hydro reservoir levels in Iberia that are above average in July of 2026 and higher forward electricity prices for the second half of the year. And at the EDPR level, the guidance reflects the upgrade on the asset rotation gains that are now expected at around 0.3 billion euros. On top of all of this, we have significantly improved efficiency and productivity, as Rui has already mentioned, which I believe is best in class, leveraging on AI and digitalization of our operations back office and just general improvements in productivity. All in all, this guidance upgrade showcases, I think, once again, the quality of our business plan execution across all of the different business lines. Looking forward, and on slide 21, the positive momentum we're seeing today is not limited to the current year. It also improves visibility for the 2027 and 2028 years, and it creates additional opportunities beyond the current plan period. Starting with 2026, the outperformance versus the CMD guidance is supported by FlexGen and clients back Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Iberian FlexGen Market Dynamics Better Than Expected Regulatory Outcome for the Electricity Networks Strong Investment Execution And from a macro perspective, we expect favorable evolution of the Brazilian and the dollar versus the euro. And post-2028, we also see several emerging opportunities. We see wind repowering, batteries hybridization, PPA repricing, data center-related powered land opportunities, We continue to see low to mid single-digit electricity demand growth supported in the US, in Europe, primarily in Iberia, Portugal in particular, data centers, electrical vehicles, and the broader electrification trends. Network investments are obviously also expected to continue to grow well beyond 2028, so into 2030 and beyond into the next decade, both in Iberia and Brazil, and renewables and batteries Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra and I'll pass it back to Miguel.

Thank you.

So we go now to the Q&A session and we'll start with the questions that have arrived from the web. So we have some questions from Fernando Garcia RBC, Pedro Alves CaixaBank, Gonzalo Barbona from EBS, Jorge Alonso from Burstein, Sky Lennon from Redburn, and Arturo from Jefferies. So first one is regarding the evolution of data center development in Portugal, including questions around the 4.6 gigawatts grid connection requests and the Merlin and Start Campus data centers development. And so what can be the impacts of this strong growth of power demand projected for Portugal over the next decade for EDP business?

So I don't have specific updates for now, but what I would say is these are real projects which are being built. I was just recently in Sines visiting also Start Campus and earlier also in Merlin Cargado. So these are on track to be built over Merlin by next year, and Start Campus already has the first parts built and are already beginning to move forward with the additional sections. Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra and I think we have a strong pipeline of projects, wind, solar, batteries, hydro pumping, storage. But it's also positive for the existing flex-gen capacity. So all of our hydro pump and storage that's already built as well as the combined cycle. So just generally all around positive for the business. We do see some opportunities that we can also develop around the PPAs or for some of these projects or co-located generation powered land. Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra From these digital infrastructures that are being built. And the fact that, as I said, the number one thing that you need for these data centers is power. I mean, the chips without power are not worth anything. So we are obviously well-placed to provide that power and to support all of the development of that infrastructure and help create value for the country and obviously for ADP as well.

Next question comes here from several analysts, also about the impact of upgraded 2056 guidance. What does it mean in terms of the second part of the year performance, Miguel?

Yeah, so what do we see for the second half? First, we see a second half which will deliver year-on-year growth versus the first half. Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Going by parts, by the different parts, FlexGen client solutions. Obviously, there is seasonality of hydro generation between winter and summer, but we do see in the second half a positive year-on-year EBITDA evolution. We are seeing good peak-off-peak spreads. Hydro optimization, we're seeing that EBITDA margin I mentioned over at least 40 euros per megawatt hour. On the EVPR side, we are also seeing EBITDA growth year-on-year for the second half, both Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra At the beginning of this year, that's obviously going to carry forward from the first half to the second half. Bottom line, so we're guiding for double-digit growth of recurring net profit in the second half of 2026, including an acceleration of the earnings growth versus the first half of 2026, or even excluding asset rotation, also contributions to the net profit.

I'll probably stop there, Miguel.

So the next question, it's about the recent news on the approval of the royal decree on further investments in distribution in Spain. So what is our assessment from the news flow of the royal decree not yet published?

I'd say it's a positive step. I mean, we've been waiting for this for quite a while. It's different in Spain from in Portugal. Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra towards the back end of the stack. So we still need to go through all the details when it's finally made public, but the first impression is positive.

And we have some questions regarding the message from the presentation is clearly optimistic regarding years beyond 2026 following today's guidance upgrades and considering 2028 target Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra

Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra and then these upgrades to carry through into 27 and to some extent 2028.

As I say, you see the demand, our performance on OPEX, all that. But I'll get into this probably more in the updates next year. I just say the generally positive outlook for 2028 and beyond.

And then on integrated margin and on Flexgen, Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra

Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra This is something we've talked about, I think, for years, but we're actually seeing that materializing in numbers. On the 2028, I think it's important to note that the Ford market has very limited liquidity, so we don't use it or we don't consider it a reliable reference at this stage. We would typically look more to either our own internal modeling or even just externally to the TTF gas prices and the CO2 prices, sort of as having more liquidity for that time period. I just want to reinforce the integrated margin is not driven just by the base load pool prices. It also benefits from the intraday balancing market spread. It depends on ancillary services. It depends also on the value of this integrated generation and customer portfolio. So overall, we are very confident that the structural market trends continue to support the resilience of our integrated margin.

And I think that's the important point. We have then a question regarding guidance for the net debt of 2026.

If we reiterate the guidance and how do we see this evolution until the end of the year?

Thank you, Miguel. So we remain fully comfortable with the guidance of around 16 billion for the end of the year 2026. It's typical that we have in the second quarter this increase in debt given the dividend distribution. And also the fact that in the second half of the year is typical when we have the tax equity proceeds as well as the asset rotation proceeds. So that is our expectation for the year. So fully comfortable with this 26 guidance. Just also to add cost of debt, we are also expecting to be around the same level that we have at this first half of 26.

We have here, maybe we'll go to a last question from Alex from Bank of America regarding power prices. and if you can give us an update in terms of edgings and levels for 2027 on EDP-Hydro and EDP-R.

I'll take this one. Thank you. So, I mean, the way we have been managing this is obviously integrated and looking at the entire volumes generation as well as clients. And I think more and more, What we are highlighting is the value of the flex-gen, which is obviously not related to any hedging. So we keep the conservative approach where we try to close all the positions that we have with customers. And again, just highlighting that what we will expect for the remaining of the year is actually an improvement versus what we have in the second half last year.

So second half versus second half, better this year than last year. And now to the questions on the phone. First question from Pedro Alves from CaixaBank PPI. Pedro, please go ahead.

Hello, good morning. Thank you for the presentation. On data centers in Portugal, it is indeed striking that we have 4.6 gigawatts of grid connection requests representing half of the current peak demand in the country. So I'll be interested in knowing how do you assess Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra

Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra

Hi, Pedro. On the financial investment, this is related to OceanWinds and specifically to one of the UK projects where we have equity bridge loans. And then when the project starts to run into operations, basically convert that into equity. So that's the impact. This was already foreseen in our strategic investment and the CMD plans.

So we can go now to the next question on the phone from the line of Arthur Seidman from Morgan's Island. Arthur, please go ahead.

Yes, thank you very much for taking my question. The first one is a follow-up question on data centers. The first thing I was wondering is you talk about very strong demand growth in Portugal and there's this big Start Campus project and other projects. I was wondering if you think that this could eventually at some point lead to some Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra

On the demand growth, could it lead to basically market splitting between Portugal and Spain? Fortunately, what I'd say is that Portugal and Spain have a very high level of interconnection. It's probably one of the most interconnected or two of the most interconnected countries in Europe. And even recently, there was another line that was sort of upgraded in terms of its interconnection capacity. So yes, I mean, it's possible. But what we've been seeing so far is that there is a significant amount of volume that can flow both from Spain to Portugal and Portugal to Spain. Actually, what we've seen, Spain has significantly more solar than Portugal on a relative basis. And so for many of the hours in the middle of the day, there is a flow of solar from Spain into Portugal at a certain point. Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Gabriel Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra I'd say that... Sorry, I didn't get whether the question was in Portugal or just generally Iberia.

Generally speaking, Iberia.

Generally speaking. I mean, a lot of our interconnections are located close to urban centers, at least the ones that we are considering. So in Portugal in particular, you know, Setúbal, Carregado, Sines, those are some of the key ones. We also have some near Madrid, just on the outskirts of Madrid, which we're also considering. So they're typically where we think they would be more attractive for data centers, which means closer to urban centers because of the latency. Apparently, it's a more attractive sort of area. So that's what the teams have been working on.

Thank you very much.

Thank you, Arthur. We have now the next question from Jenny Ping from Citi. Jenny, please go ahead.

Hi. Thank you very much. A couple of questions from me, please. Firstly, just following up on Arthur's question around Brazil, two questions there. Can you give a size of the historic recognition if that indeed is a pass that you choose to take up? And secondly, relating to that, where are we now on the regulatory recognition of CAPEX in terms of faster recognition? That review I know is still ongoing, but any updates on the timeline in terms of decisions and recognition there? So that's my first cluster. Secondly, if I look at your slide 20, and if I add up the lower and upper range of Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra What that being secured actually means? Is it just the grid connection in itself, or is there a contract behind it already in terms of data center? Thank you.

Jose Miguel Hernández- Hi, Jenny. So I didn't quite catch the beginning of your first question, but I think I then caught the second part of it, which was around RAB, right, the recognition of the RAB. But the first part was,

Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra

We're talking about around 100 million reais of value. Rough numbers. So it would be basically the volumes of the past that's sort of under curtailment that would be recognized by this proposal from the regulator. On the second part, which is on the RAB recognition. So since we're the first company to have the concessions renewed, we're also the first ones to start raising this issue around the RAB recognition sort of on the interest cycle. Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra But we do think it is important. I think people recognize, the counterparty also recognizes, the regulator and the government also recognizes that it makes sense. It's now a question of how do you translate that into something concrete from a regulatory point of view. On the second point, on the guidance, if you sum up the pieces 5.2 to 5.5, I think when we gave the 5.3, it wasn't that we were trying to sort of Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra De Almeida Côrte-Real, Paula Cristina Santos Guerra What does secured mean? So first, I think we will have hopefully some good news still over the next couple of months where you have some data center developers that want to use some of our existing sites to essentially co-locate a data center and potentially use part of our existing land. So those are situations where we are taking advantage of our existing sites and leveraging on them to create value because of a data center that actually wants to use part of that site or co-locate there. On new greenfield developments, essentially it's having interconnection. So being able to consume from the network, having a size which is relevant. So typically hundreds of megawatts is when it starts to be relevant for data centers. and then having some sort of options on land around it that would enable them to build the actual data center. So that's when we talk about powered land, essentially that's it. It's sort of having that land with some degree of licensing and permitting to be able to actually develop the site there and having that interconnection to be able to consume from the network, which, as you know, is a scarce resource in many countries.

Hopefully that helps.

Yes, thank you, thank you. So just, sorry, just to clarify that 500 megawatts, that's still yet, although it's secured based on what you said today, the announcement to come to the market has yet to be announced effectively in terms of which data center, et cetera, and that's to come, as you say, in the next few months.

Yeah, so when we say it means that we have, let's say, Rui Manuel Rodrigues Lopes Teixeira, Jose Miguel Henriques Viana, Ana Rita Pontífice Ferreira De Almeida Côrte-Real, Paula Cristina Santos Guerra We then need to have someone to transact with to actually crystallize that value.

Got it. Perfect. Thank you very much.

Okay.

Thanks.

Okay. So we will close then here the session of Q&A, and I'll end over to the final remarks by our CEO.

So the final remarks, I'll just make a couple of points. First, I think we had a great first half. I think there's no denying it. And I think that makes us very positive for 2026. And that's why we're also upgrading for the second time this year, our guidance for the year. And this is good performance across all the different segments, FlexGen, networks, EDPR. We do see improving network, improving outlook post 2026, so 2027, 2028. I'm not going to give specific numbers on that, but obviously, just given the general tailwinds that we're seeing, it's positive, you know, strong demand growth. I mean, all the things that we talked about in the call. That's good. And we are seeing improving visibility post-2028. And as I mentioned earlier, we'll update sort of in a couple of quarters on that. So we're working to basically firm up some of the different assumptions and get back to you on that. So all in all, I think we're in a great position, proving to be a great year for EDP and great prospects also for the next couple of years. So I think in general, very good. I didn't want to finish without wishing you great holidays if you are going off on holidays, and I hope to catch you on the way back in probably early September. So talk to you soon. Thanks.