El. En Spa Ord New

Good afternoon, ladies and gentlemen, and welcome to ENIS 2025 Third Quarter Results Conference Call, hosted by Mr. Francesco Gattei, Chief Transition and Official Officer. For the duration of the call, you will be in listen-only mode. However, at the end of the call, you will have the opportunity to ask questions by pressing star and 1 on your telephone. I am now handing you over to your host, to begin today's conference. Thank you.

Thank you and good afternoon. Welcome to our Q3 2025 result call. Our results are a further confirmation of the successful execution of our distinctive and consistent strategy and innovative business model. We continue to generate growth and value, both from our traditional energy activity, such as EMP, and also from emerging opportunities in the evolving energy market. In particular, the 8.5% year-on-year growth in production results directly from our consistent long-term focus and investment in E&P. We are delivering material progress against ambitious strategic objectives and Q3 was a further proof of tangible momentum in this respect. I will comment on our financial results in a little more detail shortly. However, it is very pleasing we have positive news to report from each of our main operating segments. Combining the excellent financial operating performances and the ongoing progress in valorizing our businesses, we are also able to announce a further improvement of our balance sheet and an higher share buyback. Focusing on a few of the strategic highlights, I would especially pick out At the beginning of August, Azul Energy, our business combination with BP in Angola and Namibia, began production from its operated Ergogo Westap development, with the FPASO coming on stream only 29 months after FID, almost a year ahead of our plan. Indeed, this quarter was notable for the contribution from our upstream satellite startups, with VAR reaching 400,000 bar per day production, with significant incremental production from the operated Valderix development, that started up at the end of Q2, and John Casper ramped up, driving 45% year-over-year production growth. In October, we announced joint venture FID on our Coral North Floating LNG offshore Mozambique, with start-up expect in 2028. This leveraged our successful Coral South development in production since 2022, with a remarkable 99.4% availability. and together with the two vessels in Congo, it will reinforce our leadership in this technology. I would also flag the progress we are making with YPF towards FID on Argentine LNG, employing the exact competencies I discussed in terms of floating LNG in Mozambique and Congo to access a material new integrated resource opportunity. A further successful example of ENI skills and strategy is in Ivory Coast, where in September we completed a sale of a 30% stake of our operated baleine field to be tall, in line with our dual exploration approach. The world-class baleine field was only discovered in 2021, but has already reached over 70,000 barrels per day from the first two phases, with a planned phase 3 to take gross production to over 200,000 barrels per day. Coral North, Argentina LNG and baleine phase 3 form just a part of a deep hopper of high-quality projects in our development and pre-FID portfolio. In the quarter, we signed an agreement with GIP as strategic partner in relation to a 49.99% stake in any CCUS holding our consolidated global CCUS operation, confirming the significant growth and value creation potential in this transition business, unlocked by a further example of a version of our satellite model. Finally, in September, Eni received approval for its application to convert part of our San Nazaro refinery into a biorefinery. It will add, along with three sites in operation, three under construction and further identified opportunities, including our Priolo chemical site, to the targeted tripling of biofuel production capacity to 2030. This emphasizes the meaningful growth in diversified income streams our transition segment is delivering. Turning now to our result, Q3 reflects remarkable progress in our key businesses and another excellent financial outcome. Performa adjusted EBIT of $3 billion was 12% higher than Q2 and just minus 6% down year-on-year in U.S. dollar tariffs. despite the 14% fall in crude oil prices. In the upstream, production was 1.76 million barrels per day, up 6% year-on-year on a reported basis, and 8.5% on an underlying, supported by a new startup and ramp-ups, good regularity and production optimization in the base. Proforma EBIT of €2.6 billion was consistent with the prevailing scenario, with EBIT associated split reflecting the rise in production, I highlighted VAR and Azul. In exploration, we have already added over 800 million barrels of new resource year-to-date. GGP reported another good quarter at €279 million in Proforma EBIT in a quarter that is usually quieter. remaining focused on maximizing value and optimizing the gas and LNG portfolio. Our significantly reconstructed midstream business has become a highly consistent deliverer of financial performance. In our transition activities, Enelive reported €233 million of pro forma EBIT, corresponding to €317 million of EBITDA, around 26% up year-on-year, in a quarter that is typically our best one for marketing, but also where we saw a recovery in bio-margin to pre-2024 levels. Peritone Proforma EBITDA of €98 million was softer year-on-year, reflecting the effect of some of the retail incentives coming off, but partially offset by strong growth in renewable capacity. In transformation, refining return to profit helped by better industry margin and improved utilization, while chemicals, despite the continuing weak scenario, began to show some benefit from the restructuring now underway, albeit it is very early days. Adjusted net income of 1.25 billion euro, effectively in line year on year, came despite the $10 barrel fall in crude price and weaker US dollar. That is a testimony to the growth and performance improvement in the business and a more efficient tax rate at 42% that reflects the impact of high-grading upstream production mix, the transition towards a more sustainable diversified overall income mix, and the benefit of our restructuring and performance improvement initiatives. Cash flow from operations once again reflects efficient conversion of our earnings into cash. and we saw acute reworking capital draw, reflecting our focus on efficient use of the balance sheet. Indeed, we have already realized a 2.1 billion benefit to the balance sheet through prompt cash initiative in response to the weaker scenario. Gross capital in the quarter was 2 billion euro, taking us to 5.9 billion euro year-to-date. Net capital has totaled less than 1 billion year-to-date. Outstanding agreed valorization yet to close, primarily related to the agreed ARES investment into plenitude, for which we have completed all the conditions precedent, and with closing expected in early November. The sell-down in Congo and the GIP stake in CCUS, this totals almost €3.4 billion. After €560 million in share buyback and pay in the quarter 3 dividend, net debt was €9.9 billion. Down again, quarter on quarter, and leverage stood at 19%. Taking into account the still outstanding announced portfolio action, pro forma leverage was 12%, equivalent to 11% gearing, a level at the minimum of the industry range. Looking ahead towards the full year, we are able to further improve some of our targets. We now expect full year production to be between 1.71-1.72 million barrels per day. up from 1.7 million barres per day, a 3% underlying increase versus 2024. We expect GGP pro forma EBIT for the full year to be over 1 billion. We expect cash initiative and self-help aimed at mitigating the impact of weaker scenario to deliver around 4 billion euro benefit, up from 3 billion euro previously. We confirm gross capex below 8.5 billion, but we expect net capex on a pro-forum basis to be less than €5 billion, down from the €6.57 billion that we previously guided to. And we are raising expected cash flow for recreation pre-working capital to €12 billion from €11.5 billion previously, representing an underlying €1.3 billion improvement versus our initial guidance for the year. while we are narrowing our expectation of year-end pro forma leverage to 15-18%. Reflecting the strong underlying business performance, the balance sheet metrics and the proven capability of the company to execute its strategy in a very accurate way, we are raising the 2025 share buyback to €1.8 billion from €1.5 billion of which €840 million has been completed as of end of September and around €1 billion to date. This, as we have already done since 2022, effectively share the upside in financial performance we have generated in the year, preserve a conservative position in response to the uncertainty ahead, and ensure our ability to invest consistently over the cycle for growth and shareholder value. In fact, Q3 represents all the major elements of our distinct strategy in action in one place. We are competitively growing our key businesses. We are launching new projects while also securing further opportunity through our industry-leading exploration and technological know-how in the App Scene and opening up new opportunities in the transition. Meanwhile, we are managing risk-reward, realizing value through our dual exploration satellite strategy, allowing us to bring in down debt and share upside with shareholders. And with that, I am ready, along with the ENI top management here on the call, to reply to your questions.

Thank you, Francesco. Hello, everybody. We've got a queue of questions. So as always, I'd just ask if you could restrict it to two only so that everybody gets a chance to ask what they want in the time available. If you have not yet polled, as a reminder, star one to join the queue. And we're going to start with the first question that comes from Viraj at RBC. Viraj?