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.