Endesa Sa Madrid

Hello, good morning, and welcome everyone to this event where, as you can see from the agenda now on the screen, our CEO, Jose Bogas, and our CFO, Marco Palermo, will first comment on the results achieved in 2025, and then we will present the updated strategic plan for the next three years. After some closing remarks, we will open the Q&A session. Thank you, and now I would now like to turn to Mr. Bogas. Thank you.

Thank you, Mark. Good morning and welcome to everybody, everyone. Let me start with the results achieved this year, which I'm sure speak for themselves. EBITDA reached 5.8 billion euros comfortably above the upper end of our guidance, while net ordinary income reached 2.3 billion euros, exceeding target and representing an 18% increase year on year. Economic and financial performance was particularly strong, underpinned by robust cash generation and disciplined execution. We remain fully engaged to our capital allocation strategy, successfully delivering on the main strategic priorities set last year, as we will discuss later. This solid performance reflects our ability to deliver on our commitments and our continued focus on value creation for shareholders. We will propose a dividend of 1.58 euros per share at the next annual general meeting, well above our target set and 20% higher year on year. On slide number five, we would like to highlight the steady progress made in executing our capital allocation roadmap throughout 2025. Several transactions were successfully completed during the year, strengthening both our asset base and our commercial capabilities. In February 2025, we closed the acquisition of 600 MW of hydroasset, while in July we completed the acquisition of the remaining stake in Cetasa, fully consolidating its wind asset portfolio. Together with the entry of a partner into our solar asset portfolio, this transaction illustrates how we are reducing the risk profile of our generation asset. And finally, the alliance with Maso Rans, fully consolidated since February 9, 2026, enhanced our commercial offering through telecommunication solutions, reinforcing our commercial strategy and strengthening customer loyalty. Slide number six provides an overview of the progress made on capital allocation and execution of our key industrial KPIs. Over the period, we invested 3.2 billion euros, more than 50% above versus previous year's figure, 77% being allocated to grid and renewable assets. This strong effort led to an improvement in the interruption time index, while total losses remained broadly stable, largely impacted by non-manageable losses. In renewable, the integration of approximately 1.2 gigawatts of new capacity enabled us to reach 80 percent emission-free installed capacity. finally in the customer segment we progressed on a strategic shift towards higher value customers reshaping our customer mix with a clear focus on non-pair loyalty and value creation this strong operating performance turns into outstanding value creation for our shareholders and i am now on slide number seven Nothing better illustrates the success of our long-term vision and the resilience of our business model than the consistent returns delivered to our shareholders. Over the 2040 to 2025 period, Endesa has clearly outperformed the main benchmark indexes, underscoring the strength and credibility of our value proposition. As mentioned earlier, we will propose a dividend of 1.58 euros per share, excluding Treasury stock outstanding as of 31 December 2025, which would imply a dividend yield of more than 5%. Finally, our 2 billion share buyback program is currently around 30% executed, as we remain fully committed to completing this within the planned timeframe. In fact, a new tranche of 0.5 billion euros has been approved and will be completed up to July 2026. And now I will hand over to Marco, who will go into the financial results in more detail.

Thank you, Pepe, and good morning, everybody. This year's strong results were achieved in a market context characterized by demand growing for the second consecutive year, increasing 2.9% year-on-year and 2.0% on an adjusted basis. In Endesa distribution area, where adjusted demand is growing by 2.8%, consumption increased across all customer segments. This reflects not only Spain's economic recovery during the year, but also a rebound in industrial and services demand as part of a broader sector-wide increase in energy usage. This clearly marks a turning point in a trend. The sharp rise in connection requests seen in recent years is now starting to materialize, representing a unique opportunity to reindustrialize the economy and to electrify the demand. Turning now to the price scenario on slide 10, although the average bull price has remained broadly unchanged year-in-year, the intraday volatility has been extremely high, ranging from €145 per megawatt-hour in the mid-winter to zero or even negative prices in spring, coinciding with strong renewable resources and low demand. This level of volatility has become a structural feature of a system with very high renewable penetration. Spain continues to display some of the most competitive power prices in Europe. That said, it is important to note that the final energy prices were affected by post-blockout measures adopted by the TSO, which led to a significant increase in ancillary services costs. Let me now focus on the main drivers behind our financial performance. As mentioned earlier, EBITDA reached almost €5.8 billion on our slide 11, up 9% year-on-year. This strong performance was supported by, first, generation and supply BTDA increase by 11%, driven by, in conventional generation, a strong gas management margin, reflecting the positive impact of hedges executed in previous years, partially offset by lower opportunities on the short position. In renewables, EBTDA was slightly lower, reflecting lower volumes and prices, both in wind and solar, while the hydro margin increased, driven by higher volumes and the shape effect. And supply delivered sound results across both businesses, gas and power, with power performing well despite higher ancillary services costs. Turning to networks, EBITDA increased by €0.1 billion, primarily explained by previous years' resettlements. If we go to page 12 now, all these dynamics are reflected in our integrated power and gas unitary margins. The free power margin stood at €52 MWh, representing a decrease of only 5% year-on-year, despite the increase in ancillary service costs, which weighted on results. On the other hand, gas margins reached €9 per MWh, a strong improvement driven by the factors mentioned above. Moving now to slide 13, net ordinary income came in at 2.3 billion euro, significantly above the upper end of the guidance, reflecting strong operational performance and improving the net ordinary income to EBITDA conversion ratio to 41%. DNA increased by 9%, mainly reflecting higher amortization linked to increased investment level. financial results almost flat and the effective tax rate stood at around 23.5%, no longer affected by the temporary levy that impacted last year's result. Turning to the next slide, page 14 now, we delivered strong cash generation, with FFO reaching an outstanding €4.1 billion and a cash conversion ratio of 70% FFO on EBITDA, already above the level targeted for 2027. On slide 15 now, The sound cash flow generated by the operation more than covered total investments, including 1 billion euro of inorganic investments. Over the period, net financial debt increased by 0.8 billion euro up to 10.1 billion euro, reflecting dividend payments amounting to 1.5 billion euro, as well as the execution of the share buyback program that resulted in a cash outflow of around €500 million. Gross financial debt remained almost flat, with the average cost declining to 3.3%. And with this, I will now hand over to Pepe to present the strategic plan for the next three years.

Okay. Thank you, Marco. As we move from the review of our full year results to the outlook for the coming years, it is important to start by looking at the broader energy market context in which our SD plan 2026 to 2020 will unfold. Spain still demonstrates a very high dependence on oil and gas, and this will not decline unless we accelerate the electrification of final demand. Electrification is not only essential to cut emissions and reduce energy dependence, but also a key opportunity to re-industrialize the country thanks to competitive renewable resources. In the medium term, electricity demand grows towards levels close to the PENIEC for conventional uses, but the renewable hydrogen demand is significantly delayed due to the systematic halt of projects. As a result, energy dependence will remain around 60 percent in 2030 and electrification near 31 percent, both below target. Demand growth by 2030 is driven by GDP-linked inertia, the electrification of industry, transport and buildings, although compensated by efficiency gains. Data centres will represent less than 5% of total demand. In the long term, in order to meet the European Union's 2040 goals, conventional demand should grow by around 3% per year, driving electrification to almost 50%. On top of that, hydrogen would add 120 terawatt hours of new demand. The development of this promising scenario necessarily requires significant investment in new infrastructure, the streamlining of project approval processes, and above all, a stable regulatory and attractive framework. As shown on slide 18, as of the 31st January, 2026, the Spanish distribution network is close to its capacity limit with a saturation level of 88%. The situation is even more critical at Endesa, where around 94% of network nodes already saturated and unable to accommodate new demand. With this framework, we have been able to grant only 18% of total demand connection requests received. To provide some context for these figures, the 26 gigawatt connection requests received along the year is well above peak demand of our entire national distribution network. The grid constraints are delaying or cancelling investment, grid saturation being a major barrier for economic growth, industrial electrification, and the achievement of Spain's decarbonization target. In this context, boosting investment in distribution network is essential to ensure that the country does not miss the opportunity for sustainable economic growth. The Ministry is fully aware of the severity of the situation and the forthcoming Royal Decree aimed at increasing investment limit is expected to provide additional headroom and improve the framework for accelerating the grid re-enformance. Spain faces growing security of supply challenges. Wind and storage deployed capacity is significantly behind PENIEC targets, creating stress during period of low renewable output. Solar is expanding rapidly, potentially above the PENIEC, but without sufficient storage, it cannot replace firm dispatchable capacity. This leads to seasonal curtailments and winter deficits, triggering higher gas fire generation. Nuclear plays a critical role in ensuring security of supply. We believe that the standing plan lifetimes strengthens system stability by providing inertia and voltage control, reducing CO2 emission and lowering wholesale prices by at least 10 euros per megawatt hour. With the removal of specific taxes, nuclear's full cost would fall below the cost of replacing its production with a mix of solar batteries and CCGTs, which would be roughly twice as high. To guarantee long-term reliability, Spain must secure firm capacity, accelerate storage, adapt the nuclear closer schedule to real PNIC progress, and maintain combined cycles as essential backup for future renewables. Moving now to our 2026-2028 strategic plan. Let's now break down how this energy landscape shapes the key highlight of our strategy for the next year. And I am now on slide number 21. We now present a clear and balanced approach focused on growth, risk-return discipline and financial strength. First, we will deploy a €10.6 billion investment plan over the period, with more than 50% allocated to network, reinforcing our commitment to support electrification and reinforce grid resilience. The plan also includes selective investment in value, a creative, renewable project. Second, our resilient low-risk asset portfolio will deliver predictable growth, providing a strong visibility on future performance with around 85% of EBITDA regulated or contracted. Third, our financial strength enables us to deliver sustained profitable growth. EPS is set to grow at a steady 5% year-on-year on average, driven by higher investment business growth and the ongoing effort to improve productivity and efficiency. Starting now to slide 22, let me walk you through the investment profile of our new plan. We plan to invest €10.6 billion, 10% more than the old plan, with a clear strategic focus on networks and selective renewable projects. key enablers of the energy transition, which together will account for around 80% of the total. Investment in grid will increase by around 40%, reaching 5.5 billion euros. This increase assumes the approval of the Royal Decree that would allow capex above the current regulatory cap, as well as the full recognition of the investment deployed. This level of investment is essential to accommodate new demand connections, support electrification and reinforce network resilience. In renewables, the plan involves 3 billion euros of investment. focused on selected project position to capitalize on rising demand. And finally, in non-mainland, in addition to maintenance investment, only those related to the outcome of the capacity auction have been considered in order to extend the useful life of our power plants. And on slide 25, focusing on grid investment. 52% of the investment in this plan will be deployed on networks. This plan marks a significant step forward in the share of investment contributing to RAP growth, plus 60% versus previous plan. Indeed, out of the 5.5 billion euros capex, around 80% will flow into the RAP. As a result, our RAP will increase 13% by 2028. Worth highlighting is that around 70% of the total CAPEX plan, or around 900 million euros, will be accounted as RAP and will contribute to EBITDA growth beyond 2028. Operational performance will continue to improve with lower TEPI and reduced technical losses. Moving to slide 22. During the timeframe of the plan, we are allocating around 3 billion of investment, 80% devoted to assets development. Investment are 20% down compared to last year due to the more selective approach and to the fact that some specific project had been rescheduled, extending the completion date. We are working to bring into operation 1.9 gigawatt of renewable capacity by 2028, mainly wind and batteries. This will allow us to achieve 25 terawatt hour output. Batteries and storage project will play a key role, enable us to optimize production, stabilize renewable output while ensuring power availability throughout the day. THIS PROJECT WILL DELIVER ATTRACTIVE RETURNS WITH AN IRR VERSUS WALK SPREAD TO AROUND 300 BASIC POINTS WITH 21% OF THE CAPACITY CONTRIBUTING BEYOND 2028. MOVING TO NEXT SLIDE, ON SLIDE NUMBER 27. I would like to comment on our site portfolio to develop a hybrid platform that offers optimal conditions for data centers. This project combines existing grid connection rights, transferable land for fast deployment, and the ability to provide full supply solutions based on renewable and grid access. Within this plan, we are also progressing selectively on some singular projects such as PEGO, which is scheduled to be in construction in 2027 and will incorporate 600 MW of new hybrid renewable capacity, wind, solar and batteries, with an estimated investment of 600 million euros. Its hybrid configuration enables an energy profile close to base load, making it highly suitable for large-scale customers such as data centers. Endesa is in a position to capture emerging business opportunities in the data center segment. When it comes to customer business drivers, I am on slide number 26, we will strengthen our position through loyalty, commercial alliance, and better value management. On the one hand, we will expand our physical store networks, improving face-to-face services, especially relevant after the approval of the regulation restricting spam calls and phone contracting that will help to reduce fraud in the short term while improving more than 10% share rate in the medium term. On the other hand, new alliances such as the consolidation of mass orans from 2026 broadens our blended offer portfolio and reinforce loyalty programs. As a result of all these initiatives, our customer base is set to grow from 6.2 to 6.7 million free power clients by 2028, while total power sales remain stable. Finally, it should be noted that the launch of an efficiency plan to improve our competitiveness in the current market environment. Looking at our second strategic highlight on slide number 27, one of the key assets we intend to foster is the high visibility and low risk of our earnings profile. Over the period, we expect to deliver around 18 billion euros of cumulative EBITDA around 85 stemming from regulated or contracted activities, providing clear visibility on future delivery. Grid, with our almost fully regulated and a large part of our generation portfolio, including non-mainland generation and regulated renewables, also benefit from remuneration schemes. Finally, a relevant share of electricity generation is already lacking through long-term contract and PPAs, as well as by our fixed price customer portfolio, which benefits from a strong inertia, giving us substantial visibility and predictability over a three-year plan period. And now, let me hand over to Marco, who will explain the main financial target of this new plan.

Thank you, Pepe. I would like to introduce the third strategic highlight. We go now to page 30. Financial strength. By showing a slide that clearly illustrates the resilience of our business. Our 2025 results already exceeded the target set under the previous 2025-2027 plan, highlighting the strength, the consistency and the quality of our performance. 2025 net ordinary income reached 2.3 billion, 21% above the original guidance. Moreover, when compared with the former 2027 guidance in the old plan, it already represents an outperformance of approximately 0.2 billion. Importantly, this strong performance is reflected by a sound 41% of ABTDA to net ordinary income conversion ratio. On slide 31 now, overall these results reinforce our confidence in the business outlook, and they are a good starting point for the growth plan for the coming three years. EBTDA is expected to grow at a compound annual rate of around 4%, together with an improvement in cash conversion, with the FFO to EBTDA ratio increasing to 78%. Net ordinary income is also expected to grow at a similar pace, at approximately 4% per year, reaching a range of 2.5-2.6 billion euro by 2028. Profitability will remain stable, with the net ordinary income to EBITDA ratio broadly maintained at around 40%. Turning to capital structure, net debt is expected to increase to a range of 14-15 billion euro by the end of the planned period. With this overview in mind, let me now take you through the evolution of our main business lines on slide 32. EBTDA is expected to increase by around 10% over the plan, reaching a range of €6.2-6.5 billion by 2028. This growth is underpinned by three main drivers, which we will discuss in more detail in the following slides. First, an improvement in the distribution margin, supported by higher investment levels under the new regulatory framework. Second, the expansion of the generation and supply businesses, where the increase in the integrated power margin more than offsets the expected normalization of the gas margin. And finally, a reduction in fixed costs driven by the rollout of a new productivity program supporting competitiveness in an increasingly challenging environment. We will now take a closer look at each of these drivers in the following slides. Let me now turn to networks on slide 33. Network CBTDA is expected to increase by a solid 10% over the planned period, reaching €2.3 billion in 2028. This growth is primarily driven by the strong expansion of the regulated asset base, which is expected to increase by around 1.5 billion euro over the planned period. A second key driver is the entry into force of the new regulatory framework for the 2026-2031 period. Taken together, these factors will support an increase in regulated remuneration over the planned horizon. Turning now to slide 34, let me provide you with a more detailed view on the evolution of the free power and gas margin of the plan period. Starting with the power business, sales to liberalized customers will remain broadly stable with an increase in free fixed price sales representing around 80% of the total free sales. These volumes are increasingly covered by infra-marginal technologies due to the higher renewable output leading to structurally lower sourcing cost. By 2028, the free power unitary margin will increase, driven by, first, a strong improvement in the supply margin, mainly explained by the recovery of extraordinary ancillary service costs incurred after the 2025 blackout, by the resilience of fixed price customer portfolio, and by the reduction of sourcing costs. Second, positive generation margin on higher renewable volumes, then more than compensate the impact of a lower price scenario. Finally, a slight improvement from the short position management. Moving to the gas business, total sales will decline by around 33%, reflecting the expiry of the Qatar and the Nigeria gas contracts. Gas margin will normalize over the planned period, essentially due to retail gas margin remaining broadly stable, and in contrast, other gas margin normalizing from the exceptional high levels recorded in 2025-2022. Turning now to slide 35, productivity has always been at the core of our strategy, but over the next three years, it will be even more critical to maintaining competitiveness in an increasingly challenging market environment. Over the plump period, fixed costs are expected to decline by 10%. This improvement is driven by a strict and well-defined efficiency program to be deployed throughout the period. A key enabler of this program is the broad deployment of digitalization and progressive implementation of AI-based solutions across the company. These initiatives support more intelligent and real-time grid operations, higher efficiency and reliability in generation, more personalized customer interactions, and productivity improvements across selected corporate and support functions. Together, they allow us to structurally improve our cost base while enhancing operational performance. Efficiency measures will be primarily concentrated in the liberalized businesses, where there is greater flexibility to capture value. Actions include organizational streamlining, process reengineering, increased insertion of critical activities, and the recalibration of of services provided by external suppliers. In summary, disciplined cost control combined with AI-driven efficiencies enable us to protect margins, improve competitiveness, and sustain performance over the long term. Turning to slide 36 now, looking at the net ordinary income, we expect a solid and sustained growth trajectory of the period with a compound average growth rate of approximately 4%, reaching a range of 2.5, 2.6 billion euro by 2028. EBITDA to net ordinary income ratio will remain around 40% throughout the plan. The updated plan represents a clear improvement in earnings per share growth. EPS is now projected to growth at around 5% per year on average, a meaningful acceleration compared with the previous plan where we envisaged a 3%. This acceleration is driven by a combination of higher underlining earnings and the positive impact of capital allocation actions, including the execution of the share buyback program, which further enhances per share value for shareholders. On slide 37 now. We will maintain a solid financial position, leveraging on strong cash generation and financial flexibility to fund growth while delivering sustainable short-holder remuneration. Over the course of the plan, net financial debt is expected to increase by approximately €4 billion to €5 billion. This evolution is fully explained by the balance between robust cash flow generation and a significant step up in capital allocation. On the surses of funds, we will generate close to 14 billion euro of funds from operation over the period. This reflects the strength and resilience of our underlining cash generation, supported by EBITDA growth and solid cash conversion, with the FFO to EBITDA ratio expected to reach a sound 78%. The total cash outflows will amount to around 18 billion euro. Cash investments are projected at approximately 11 billion euro and shoulder remuneration remains a key priority with dividend payments totally around 5 billion euro over the period. complemented by 1.5 billion euro related to the completion of the remaining share buyback program. Consequently, net debt to BTDA is expected to move from the current level of around 1.8 times, reaching 2.3 times by the end of the planned period. And now I will hand over to Pepe for the closing remarks.

Thank you, Marco. On slide number 39, we are confident that our strategy will generate visible and predictable returns, which is why we are updating our dividend policy. Based on current net ordinary income targets and the expected execution of the share buyback program, dividend per share is projected to grow at an average rate of approximately 4% over the period. This increase takes as its starting point an extraordinary 2025 DPS of 1.58 euros per share. For the planned period, we improved the dividend policy by guaranteeing a minimum payment of 70% on net ordinary income. further reinforced by the implementation of the remaining Serve-by-Back program by December 2027. Overall, we believe this represents a clear, sustainable and accretive remuneration policy, providing a high degree of visibility to our shareholders. Turning to slide number 40, in summary, INDECA is well positioned to capture demand growth opportunities beyond the horizon of the plan. This is why it is important to extend our perspective to 2030 for the business most directly linked to the energy transition. New demand will naturally transform into additional generation needs and further narrow the strengthening requirements that will also put upward pressure on energy prices. Starting with renewables, the completion of the capacity currently under construction, together with the additional capacity required to serve incremental demand, will allow installed capacity to reach around 15 gigawatts by 2030. At the same time, our regulated access base is expected to continue expanding steadily in line with the significant investment needs required by the Spanish electricity system over the coming years. RAP is projected to grow to around 15 billion euros by 2030, implying a compound average growth of approximately 5%. This evolution reinforces the visibility and stability of our earnings profile and underlines a long-term commitment to supporting the country's electrification and decarbonisation objectives. This turns directly into a stronger financial performance. Earnings per share are expected to increase from 2.3 euros per share in 2025 to a range of 2.8 to a third to 3 euros per share by 2030, also implying an average yearly growth of around 5%. On slide number 41, despite the increase in leverage and visits in the business plan, Endesa preserves substantial financial flexibility. Our strong balance sheet provides capacity to move closer to the sector average leverage of around three times without compromising capital discipline. These additional resources could be selectively allocated across several strategic priorities. Structuring maximum value from the hybrid project hub, capitalizing on growing demand, assessing selective M&A opportunities fully aligned with our long-term strategic framework and strict value creation criteria. Accelerating the deployment of storage. liberating on the increasing need for system flexibility. All of these opportunities would support additional growth, reinforcing the upward trend in EPS. Moreover, the possibility of enhancing shareholder remuneration policy is an optionality. Turning to environmental sustainability on slide number 42, this slide outlines Endesa's clear and credible decarbonization pathway. By 2030, Endesa's emission trajectory is fully aligned with a 1.5 degree pathway, reinforcing the credibility of our long-term ambition. Looking further ahead, our objective is to reach close to zero emission by 2040. In the short term, our focus remains on reducing direct greenhouse gas emissions in the mainland system. By 2028, this translates into a further step down in emissions, supported by the continued decarbonisation of the generation mix and the increasing weight of low-carbon technologies. This decarbonisation roadmap is underpinned by a balanced approach that combines environmental ambition with system reliability and social responsibility. To conclude this presentation, let me turn to slide 43 and share a few closing remarks. is firmly anchored in highly predictable low-risk activities with a clear focus on business and projects that offer long-term visibility, stable cash flows, and resilient returns. Efficiency is a central pillar of our strategy and a key lever to enhance performance and competitiveness. At the same time, we benefit from strong financial flexibility, which provides meaningful optionality for growth and value creation. And finally, all these strategic drivers converge on a single, clear objective, delivering solid and attractive remuneration for our shareholders. Ladies and gentlemen, this concludes our 2025 financial results and 2026 to 2028 strategic update presentation. Thank you very much for your attention and we are ready to take questions.

The telephone Q&A session starts now. If you wish to ask a question, please press star 5 on your telephone keypad. If you change your mind, please press star 5 again on your telephone keypad. Please ensure your phone is not muted.

Okay, we start now with the questions from our analyst. And the first one is Peter Vistega from Bank of America. Please, Peter, go ahead.

Good morning. Thank you for taking my questions. I guess kind of my main question is to try and understand what has really changed versus your prior plan that drives a basically like 600 million euro EBITDA improvement on in your new 2028 guidance versus your previous 2027 guidance. You know, if I look at your bridge on networks, EBITDA there is only 100 million higher than in your previous plan. I think you're targeting, I think, only 600 megawatts more power generating capacity than the previous plan. So there must be like a huge increase in your customer profitability, so in your retail business. So can you kind of confirm that that's really where the biggest delta here is versus your kind of previous expectations? It would be useful, actually, if you could give euro per megawatt hour guidance on your sort of free power margin, gas margin and retail margin in 2028. You used to give that, but don't seem to in this presentation deck. You also actually don't guide specifically to EBITDA in renewables and customers. And I'm just wondering why that is. And then, sorry, final part to that very long question is how much EBITDA benefit do you assume in 2028 from the capacity market and also from the Almaraz extension, please? Thank you very much.

Okay, so good morning, Peter. Let's go through the three questions, basically. So, 2028, let me help you to bridge it with 2025. Basically, you have on distribution, as you were correctly noticing, I mean, we adjusted 2025 because there were 100 million of extraordinary numbers. So if you look at with the adjusted 2025, it's a 15% increase. If you look at with the unadjusted, it's 10%. But basically there, there is an improvement of 300 million. And it could be even more. because if you look, it's not everything optimized. If you look at charts, for example, 23, you can see that the CAPEX generating margin beyond plan, we put it at 17%. So basically, there is another billion... That is not in rub at the end of the plan, because, of course, it takes time just to build all the networks. So there could be even more eventually. That is on the distribution, so $300 million on the distribution, that if you count the result of 2025 is $200 million. Then you have another part that is on the margin, on the free power margin, that is the recovery of the ancillary services that we suffer in 2025. I mean, we always said it was north of 200 million, so slightly more than 200 million, and we plan in three years' time just to have all the time just to recover that. Then you have another part that is related to the higher production of inframarginal. That is the combined of two. On one side, we are, of course, doing a lot of repowering, both in hydro and wind, so this somehow boosts also the production. But we are also building new capacity, and therefore you have... A positive effect because on one side you have less lower prices, but on the other side you have another 8 terabytes of production, so that net-net will bring you approximately 300 million. And then you have, you know, another 200 million of savings on OPEX. This is on the positive side. On the negative side, you know, we will adjust the high marginality that we have enjoined in 2025 on the gas, and that adjustment would count probably around 400 million. So net in net, that's where you find basically this 600 million of difference. This is on question number one. On question number two, just going a bit quicker, the free power margin that we are envisaging for the 2028, it's between 55 and 60 euro per megawatt hour. That basically is like taking the reference of 2025, the 52 that were impacted by the ancillary services cost, and bringing back these services there. Of course, it's more complex because you have power prices lowering down, but also the sourcing cost is going down, and that's why you basically keep that marginality. And on capacity... I would tell you that probably that is an upside of our business plan because basically there is not much of capacity there because we do not have visibility yet on what will be the market there. We do not have visibility yet on what will be the plans that will benefit and that will win the pay as bid there. So, I mean, it's like, you know, we will basically see what will come out. Thank you.

Okay, thank you, Peter. Next question comes from Pedro Alves from CaixaBank.

Hi, good morning. Congrats for the results in the presentation of targets. The first question, please, would be on the sensitivity of your 2028 targets to pull prices in Iberia and the TTF price as well for your gas margins. Second question on data centers. You mentioned ongoing discussions with data centers. So the question is if you think that you could realistically announce something this year. And the third question on the CapEx envelope of the 10.6 billion euros, if you can provide us how much is roughly growth versus maintenance of the CapEx. Thank you.

Okay, so thank you, Pedro. So on question number one, sensitivity on power and gas. On the power side, I guess that is probably another feature of this plan. In this plan, we are not incorporating a strong increase of demand. So what we are seeing, just to give you an idea, is for this year, 2026, an increase of 1.2%. That, frankly, is lower than last year. And then in the following years, we are approximately at 2.4%. So basically, I mean, it's not because we believe that this will be the increase in the demand, but it's because we really don't know where to place the real ramp-up. We feel that probably it is starting, Of course, when we started the plan, we had not this feeling. But, I mean, you know, there it depends on what will happen on the demand. So on the demand side, I feel that we were kind of conservative on prices, as you have seen. I mean, we adopted the forward that there were at that time. So basically in 2027 going to 58%. Euro megawatt hour. So, I mean, there I guess that there is a kind of balance between the two. And on gas, I mean, in reality on gas in our plan, you know, all the profitability and all the marginality will basically come from the retail business at the end of the plan. So basically, you know, we are assuming that, as I said in the speech, then from the other gas there is not coming much of a marginality, frankly. Regarding data centers, are we planning to announce something soon? I guess that definitely we are planning to do something in the course of the year, of this 2026. We have some of the developments that are more advanced. We decided just to put, you know, one of the references of something that is very well known, that is the Pega project in the presentation. And there we signed agreement. The positive part, I guess, of the plan is that in the plan, there are basically, there is not the upside of the data sensor. Why do I say so? First of all, because as I said, in the demand increase, we are not assuming the data centers really kicking in. first. Second, in the plan, we are not assuming any particular PPA, basically, and higher price PPA. And third, we are not assuming any upside or any extra margin related to the sale of the land or the access to the Greek connection. Why is it so? Because, I mean, we want to see exactly what are the numbers that we will somehow see when we sign the agreements. And on the third question regarding how much is growth and how much is maintenance, I would say that basically the maintenance capex is approximately 30% of the total, with the rest, of course, being incremental growth capex. Thank you, Pedro.

We have missed the last question from Pedro, if you allow me. The sensitivity to one euro of increase of prices, power prices, it translates to around 20 million. Okay? Thank you, Pedro. Now we have Javier Garrido from JP Morgan.

Yeah, good morning. Thank you for taking my questions. First question will be, On the supply business, I was wondering whether you can be a bit more specific about the supply margin in 25. And particularly, you could also elaborate a bit more on how you plan to take control of customer losses, given that the pace of reduction has slowed down, but you are still losing customers. How do you plan to make that increase in customers, even if we exclude the mass launch acquisition? The second question would be on the dividend policy. You could clarify a bit more the dividend policy, and I write in understanding that the new dividend policy is at least 70% payout ratio, so that it results in at least 4% DPS CAGR, or is there any different interpretation? And the third question is on the cash conversion of EBITDA. It increases significantly from 70% to 78% through the plan. Would you mind to please elaborate on why that increase? What is hardly driving the improved cash conversion? Thank you.

Okay, thank you, Javier. And sorry to Pedro for losing the last part of your question. Javier, so basically on supply on 2025, as you have seen, the marginality, the free power margin was 52, so lower than the previous year, and it was lower. A mixed effect. I mean, it was lower than in 2024, but not so much lower when compared to what has been the impact of the ancillary services. So somehow, you know... There, I guess that in 2025, you can see the good performance of the business. You're right. I mean, we have suffered last year of, you know, many losses of clients. But again, I mean... There are kind of two markets, I would say. There is a market that is healthy. There is a long-term client that experience a normal churn rate. And then there is another market that experiences very high churn rate and, if you allow me, even a very high level of fraud. And that has been constantly rotating. So, I mean, what we understood at a certain point was that we were basically losing money on them because we were putting money just to acquire them and putting money and putting more money and then losing, you know, the permanence of those clients was very short. There was no time just to get back the investment. So, I mean, it simply made no sense. So we preferred... to go for something different so we accepted losing part of the clients and we went for the acquisition of mass orange that was basically not because we acquired the clients but because we were now able to serve bundle products and and apparently it is working because of course in the at the end of last year we were reducing a lot The losses, and I mean, we cannot comment on this year, but I guess the situation is somehow also the acquisition of Mass Orange is proving that probably we have seen it correctly. When you go to the dividend policy, yes, you're right. It's the correct understanding. So basically, at least our payout will be 70%. And at least this 70% converts in at least 4% of CAGR on the DPS. And then on the cash conversion, I guess that, of course, it's a kind of challenging target that we're giving to us. But basically, we're... We're doing a lot of jobs, a lot of jobs on every business just to improve the cash profile of each one of those. So we think that all these efforts that actually we started in the previous years can somehow come to give all the fruits at the end of our business plan. Thank you.

Okay, thank you, Javier. We move now to Alberto Gandolfi from Goldman Sachs.

Thank you. Good morning. I'll ask three questions as well. Could you please elaborate on your churn rate assumption and how much is it right now and how sustainable are the current levels before the new entrants start to lose money? So can you maybe elaborate a bit on the dynamics that you embedded in the plan on this? Secondly, there is a very exhaustive slide on cost savings, on the reduction in the fixed cost. I think you have four buckets, right? Network automation through AI, labor. Would it be possible to tell us what the biggest buckets are? One or two, perhaps. How much of this is natural attrition? People that are retiring or being pre-retired. And then you hire someone coding on Copilot or Cloud that replaces five people. So how structural is this? Can we assume that this 300 million reduction will carry on beyond 28 and for several years to come? And the third question, I mean, you still have ample balance sheet headroom. So if you were to think about how to utilize it in the medium term, you know, going to beyond 28, is there any way you could rank in terms of priorities either what you favor or what is possible? So would that be more organic growth in power grid? Would it be external growth in clients or power gen? Would it be more share buyback? Thank you.

Thank you, Alberto. So regarding the first one on churn, I would say that there, you know, the assumption of what we are experiencing right now, it's an elevated churn that is, you know, in the range of, I would say, 25, 30, okay? It's a very high churn. And as I was saying, it's, you know, it's very... very somehow concentrated on some of the clients. Now, are we seeing this, you know, somehow going to normal level during the plan? No. We are still assuming that at the end of the plan, the churn will remain very high, not at a normal rate. But, yes, a bit decreasing. And we are assuming this because we think that at least the frauds and all the part that is somehow impacting strongly on the churn should somehow be reduced. We recently approved a royal decree on that, trying to get rid of at least that part, and we really hope that that will happen. will be somehow effective in reducing at least that. And on the other side, I mean, all the measures that we are somehow putting in the plan and that we are delivering. We started, you know, doing this last year in terms of, for example, physical, you know, points and that, of course, attract the clients and then they have a lower churn and but also the changes that we made, the bundled products. I mean, there are many, many things because there is not something, one specific stuff that stops the churns. So all this kind of stuff, we really think that will kick in. So again, very high churn in 2025. We still assume that at the end of the plan, we will be still high, but lower than this because of the reduction of the things that we are doing and also, hopefully, the reduction in the fraud level. Regarding the second question, cost reduction, I mean, this is... not making me very popular here, but, I mean, here there are many things. You know, we started this... First of all, is this structural? Of course it is structural. We started this, you know, last year because it takes time just to have a structural contention of costs and productivity. And there are a lot of measures... You know, some of those will reduce costs. Some others will improve the quality and not necessarily reducing costs. So, I mean, there are a bundle of things. When it comes to whether this somehow touches also the personnel, I mean, this is kind of still sensitive. What I can tell you is that this is not the first time that we do this. I guess in history, this company has been used to make these structural changes. So, for example, when the call was closed or, you know, when we decided to move to the cloud and blah, blah, blah. So, I mean, in all these moments, the company has been capable of treating this properly and, of course, you know, doing it in the proper way with... the support of all the employees. And on the third point regarding the ample balance sheet, that we keep, yes, it is true, we still keep it. We think it's actually a plus, it's a benefit. Why so? Because we think that there could be opportunity. The opportunity could come from the fact, for example, that if you look at the plan, there is, yes, an increase on the capex in distribution, but there is a decrease on the renewables vis-à-vis the old plan, that it's not something that explains itself. But what we think is that we have a lot of things there ready to go. We need to assess exactly where the when is. the demand will start to kick in just to somehow, you know, eventually go even more with investment there. And priorities, I guess that some of the things we can do ourselves, I guess that, you know, there could be things available. in the near future. So, I mean, of course, on all this, we do not comment. But in terms of our priority, I guess that it's very clear where we've been putting money along the last couple of years. So, I mean, I will go to that. Will there be space eventually also for, you know, more shoulder remuneration or shoulder remuneration improvement? Of course. I mean, you know, we will somehow balance. We have ample room there and we will somehow balance. Thank you.

Thank you, Alberto. Next question is coming from Manuel Paloma from Exambienpim.

Hello, good morning, and thank you very much for the very insightful presentation. I've got three questions, if I may. The first one goes into one of the things that you've mentioned in order to achieve improvement in the integrated margin. First thing I'd like to know, to get the confirmation that you assume the extension of Almirath 1 and 2, and in case there's no extension, what could be the impact in terms of terawatt hours? And if you are assuming in case that it gets extended, any additional capex related to it. The second one also related to the well to the to the production output is what is the impact you're assuming from hydro normalization after an excellent 25 and looks like a still a very good 26 And lastly, on the generation output, why adding 1.5 gigawatts of wind and solar in Spain, given the level of curtailment that we are seeing? Do you really need it, or wouldn't it be enough just going to the wholesale market and purchasing the electricity? Second question is on the other side of the integrated margin, is on clients. You are assuming 500,000 additional clients, if I'm correct. I understand that you have already purchased MassMobile, but my question is, are you expecting to see a decline in the final achieved price to customers and could you give us a reference? And lastly, it is about the regulated business. If I'm correct, you're roughly assuming 1.8 billion per year capex. Is this granted or will you need any additional authorization from the Spanish government slash regulator? Thank you very much.

Yes, Marcos. Okay, so Manuel, let me go through, I guess, let's see if I get all of those. First of all, on free power margin, actually you were asking on Almaraz and someone else, I guess, that I forgot this before. on the Almaraz extension. Yes, we are putting in as an assumption, coherent with the request that we did to the nuclear authority, that there will be an extension of Almaraz. Almaraz, for us in the plan, is basically one group in 2028 and means approximately three terawatt hour of increasing production. There I would say that there are... You know, there is a positive, that is that you have three terabyte hours more that you sell, but there is also a negative because, of course, the nuclear allowed the system just to keep a lower power price. So, I mean, that's why it is so important for Spain to keep it. Therefore, if you take it off, you have an effect on the prices there. The mix of the two is positive for us because we are talking about the three terawatt hour, but the combined effect is less than 100 million. And on hydro, yes, on hydro, in what we are seeing, I mean, it's... of public dominance. I mean, the hydro production in 2026, actually, apparently, it's better than in 2025. We had a very good start in 2025, then not a very good ending of the year in 2025. Apparently, it looks like it's better this year. On generation output, You know, the combined, I mean, when you see solar, wind, and so on, in reality, they are concrete projects, and those are related to, as I said, data centers. So can we buy this on the market? Yes, but those projects are the ones that have closer data centers. So, I mean, in that case, we would rather prefer there is more marginality If you build, if you develop the project and you serve the data centers instead of trying to buy energy on the market. On clients, I mean, the 500,000 more, just basically, I mean, we are at the target. right now. So if you look at it from that perspective, with Masa Orange, it means that we have to try to defend this, you know, till 2028. Do we see a decline in price? Of course, I mean, with the decline in price of the market, you... slower, of course, but you see a decline in price on the customer, but you do also see a decline in the cost of sourcing. So that's why you maintain the marginality. It is true that then the prices on the market takes a bit of time, just reflects. So it is true that when the prices on the spot goes down, they do not immediately reflect on the B2C or on the SME and blah, blah, blah. But also the opposite is true. When they increase, they do not immediately reflect on the final market. And regarding... The regulator, so regarding the level of investment, what is still missing is what the government announced, that basically was a decree just to allow till 2030 an increase of the cap that currently is 0.13% of the internal product, for up to 63%, so basically 60% more. So that is what has been announced by the government at the end of 2025, and we are expecting this decree to come. I hope that I got all your questions.

Thanks. Let me get some color about the nuclear and perhaps about the distribution. Why we have decided just to... to extend or to delay the close of Almarat in our plan. First of all, you should take into account that the table for closing nuclear plants was set in 1918. And since then, the context and priorities have changed substantially. The second thing is all countries are addressing extension and new power station even. But on top of that, for us, there are technical, environmental, and economic reasons for delaying its closure. Technical reasons. Let me say, on the one hand, it makes no sense. for group belonging to the same plant closing in different years. That is, and you know that it was expected, the close of Almarat I in the year 27 and II in the year 28. The second thing is that the interim storage facility, the so-called ATI, will not be completed until 2030 at the earliest, and nuclear waste cannot be managed until then. So it has sent, just to delay a little, On the other hand, there is a significant delay in the deployment of storage and wind power also. The system requires synchronous generation to manage both frequency and voltage, and the energy balance up to 2030 would be more balanced and secure, and with less energy dependence if we continue with these power plans. With regard to the environmental reason, the closure of the nuclear power plants would not lead to a slower growth in renewables, but rather to an increase in combined cycle production and consequently in emissions. And the economic reason, Marco has said, maintaining nuclear power generation reduce the cost of the electricity market. So all in all, we have asked to the ministry just to delay the shutdown of Almarat. We are confident that it would be done. With regard to the net worths, Let me say that increasing investment in Spanish network remains essential for the integration of renewable, for the electrification of demand, and for ensuring system stability. As you know, the grid has virtually no remaining capacity to accommodate rising demand. And in any case, this increase in demand is going to be a very good thing for the renewables, especially for the for the solar power plants, it would be a good thing for the economy of the country. So at the end, we have decided that it's going to be a good thing for all, for the government, for the country, and for us. the reason why we have decided. Let me say that we assume that the Spanish government has already anticipated will raise the regulatory investment limit. The ministry projects a significant increase in investment in networks between 2026 and 2030, totaling €11.3 billion, €3.6 billion coming from transmission and €7.7 billion for distribution, and exceptional, as Marco has said, 62% increase in the investment limits in order to adapt them to the new context of the energy transmission. These 7.7 billion euros increase in distribution investment. Limit is something around 1.5 billion euros per year, turns into a cap rising from the current 2.1 billion euros to something around 3.6. So this could imply something around 600 million euros in additional net investment for Endesa. on top of the 900 million euros that we have today. So based on this, we feel confident just to increase the investment in the network in Spain.

Thank you. Next analysis, Javier Suarez from Mediobanca.

Thank you, Mark, and good morning all. Three questions on the European context for electricity companies. The first one is on the debate that maybe the Italian government and the German government have opened up on an effort to reduce overall electricity prices through the Eurozone. So I'm interested to see your view on the implication that this may have on the pricing setting dynamics through the Eurozone, and how do you think that debate is going to evolve? And in this context, you can share with us the assumption that you are embedding into your business plan regarding carbon prices to 2028. That would be the first question. The second one is on the data center discussion. So it's evident that there is going to be installation of new data centers to Europe and the Iberian Peninsula as well. So I wanted to ask you your view on the model that should be implemented to avoid unintended consequences because obviously there is going to be higher electricity demand and that could impact overall electricity prices as well. So do you think that that may impact the way data centers are going to be installed and what would be the way of isolating those unintended consequences? And the third question is on this slide when you are talking about leverage, evolution, and financial flexibility. When you are referring to scouting brownfield opportunities, if you can elaborate on how those opportunities should look like as you're referring to renewables, energies on the Iberian Peninsula. Are you referring to a broader set of opportunities? And also on the storage plan, how do you see installation of new storage impacting the dynamics for the Spanish electricity sector? Thank you.

Okay, thank you, Javier. I will try to give some color and then Marco will go deeply on that. About the effort to reduce prices, well, first of all, I would like to say that the energy transition, at least in my opinion, is entering a more mature, challenging phase. Clean energy development continues, but delivering a deeply decarbonized resilient energy system is far more complex than simply, I would like, adding megawatt, renewable megawatt. Technology evolution, when we see the technology evolution, hydrogen is the most delayed driver of the PENIEC due to economic reasons. I think that in the PENIEC it was expected something around 50 terawatt hour in the year 2030, and I guess it's going to be less than 10 terawatt hour. Talking about the storage, PENIEC includes plus 15 gigawatts of storage needed by 2030 up to 22.5, if I remember well. It is clear that we are going to be in a figure lower than 9 gigawatts instead of the 15 gigawatts expected. So that tree, and why these many things, one of the things is the delay in the development of these technologies. The other thing is the geopolitical tension and macroeconomic pressure, take into account the COVID pandemic, the war in Ukraine and the Middle East, the, let's say, unpredictable trade tariff. So, we are living in a market uncertainty, complexity, and commodity price volatility. Energy demand was flat during the last year, but now we are expecting that outpaced improvement in energy efficiency. Also, there are movement in all the countries. So at the end, things could change. But in the case of the carbon prices, I think the CO2 price should be and will be one of the main drivers of this transformation. So the focus for me is not going to be or not should be the reduction of the price of the CO2. It should be the electrification and the decarbonization. We should continue adding renewables. And we are obliged just to... electrify the demand. So taking this into account, I think that it has no sense just to look for a reduction in the CO2 price. What I think is that the solution should be just to subsidize some industries that have the very high industry. very high consumption industries instead of that. I think that there is no sense to approve the one decree in Italy and also it's not going to be something general in the rest of Europe. What I think is that it's not going to be a downward in our plan.

Thank you, Javier. I mean, question number two related to data center. I mean, it's a very interesting question and will take us a very long time to debate on that. But the data center's consumption, our consumption basically are baseload. So what we are seeing, what we are proposing, what we are seeing also on the data center's developers and hyperscalers is they are conscious that from the fact that, of course, they will impact the demand. And therefore, we do see merit in trying to develop for them this integrated bundle of technologies in order to try to replicate a base load and in order to have the data centers that is close by to his own feeding, to his own supplier somehow. Then, of course, the grid would be a kind of backup for the peaks or for the moments where exactly this bundle of technologies altogether, the wind, the solar, and the battery, are not able to provide the energy. But what we are seeing is that, and we are seeing this in Aragon, I mean, this is starting. You know, you are having the development of the data center, but in the close by, you're having also the development of renewables. And actually, the data centers, they are trying to develop close to big areas of development of renewables in order to have their suppliers in the close by. Of course, it's not perfect. It's not a perfect base load. But for the time being, it's the best approximation of that. And on question number three regarding financial flexibility, I cannot be too specific because of course I mean you know this I would be I will be generic because I don't want to screw conversation that we're having but I would say that it's not a secret that we are interested in hydro and when I mean hydro it's modulating hydro, but it's also storage hydro. Actually, in the plan, we have expansion of pumping in our plan, so we do not see the results in the plan, but yes, we do the capex in the plan, and we are looking for more. We are looking also at storage to develop our own storage, or eventually we could be interested in in batteries for the time being. It's not of a secret that we're interested in wind. And, I mean, I guess that in distribution we're satisfied with all the investment that we have. But, of course, I mean, it's... It's also an area. So I would say that, you know, there is a big list of technologies and of areas where we could be interested. Again, yes, focused on the Iberia Peninsula. Thank you.

We move now to Rob Poulain from Morgan Stanley.

Rob, thank you. Good morning, everyone. Congrats on an impressive plan, and thanks for all the answers so far. You'll be glad to know I have one question, and that's just to clarify something on the buyback. So, you mentioned the second tranche of 500 million is 30% complete, if I heard you correctly. But I think you also said, and is that going to be completed by mid-July, or is that the third tranche? Can we just get a little bit of color on the sequencing of the buyback? So is the second tranche through to July, the third tranche in the second half of this year, and then the fourth tranche will come in 2027, or do I misunderstand this? Thank you very much.

Okay, so, Rob, yes. First tranche was basically completed, almost completed. We bought, if I remember correctly, 440 million out of the 500, and we are now cancelling the shares. The second tranche that will launch another 500 million should elapse by the 27th of February. And out of this, I mean, it's now ongoing, I guess, that we bought approximately 120 million, probably, at a price that was a bit higher than 30 euro per share. But, I mean, it's the one that in any case should elapse from the 27th of – by the 27th of February. So the third tranche that we just announced will start – will kick in from the 2nd of March till basically the end of June. And it's another 500 million. And then I guess that our idea is to continue with another tranche. At that point, we should have approximately another 900 million to complete by 2027. And I mean, I guess that we will continue also in the second part of 2026. with other tranche. I mean, it's like, let's see, but it's our idea. And we should be finished in any case by 2027. Thank you.

Thank you, Rob. Next question comes from Arturo Morua from Jefferies.

Well, thank you for taking my question. I just have one. Going back to the decree to increase the network investments, My understanding is that part of this increase will only be remunerated if the demand comes through after a few years. So if you could share a bit of more color how this will work and how are you counting this in your numbers?

Okay, Arturo, so basically here the point is that generally what we try to do is to start an investment in the grid at the beginning of the year and to try to put in operation by the end of the year so that we can get the rub on that. Now, sometimes there are, particularly if you increase the pace of investments, there are investments that you start at a certain year and that not necessarily are put into operation at the end of the year. So there is a kind of ramp-up. So in this ramp-up, when you have this ramp-up, you have at the beginning the negative effect that you are investing and you are seeing you are always... keeping the pace, and you're seeing the remuneration from the next year. But, of course, when you finish this ramp-up, you have the benefit that you're still enjoying the ramp-up, even though you're not investing. Now we are in the first part, that is, ramping up the investment, and so not immediately seeing all the benefits. So that's why we wanted to highlight, because in the plan – You know, I would say that at the end of 2028, we are missing almost a billion of rub there that, of course, will come later. But the plan in itself is not optimized. I mean, that's what it is. We cut the plan at the end of 2028. And there were, you know, almost one billion of investment that were done. but not yet in operations or not yet in RUB, so that, of course, you find out the next year. And that's why we wanted also to give you a flavor of what could be 2030, because this is something that is embedded in the plan in all the businesses. In distribution, you will see the benefit also in the year to come, And the same in the generation, because also in the generation we have some of the projects. I was mentioning, for example, the pumping. You know, we were putting the money and we were not seeing yet the EBITDA. So, I mean, there are things that you only see later on. So that's why we wanted to give also a flavor of what could be the 2030, because the plan in itself is not optimized. We cut it at 2028 and that's it. Thank you.

Next question comes from Jorge Alonso from Bernstein.

Hi, good morning, and thank you very much for the questions and the presentation. I have a couple of questions, please, and it's on the cost-cutting and efficiency plan of these 300 million. Could you give us some more color about in which areas can be allocated? So it will be more in distribution? Should we see that more in the whatever, thermal generation, just to understand at the unit level where can we see the impact of that efficiencies at a bit of level. The other one is in distribution as well. If you can quantify the expected incentives, the amount of incentives that you are expecting or considering in the calculation of the of the revenues or EBITDA in the plan. And as well, and I think that people already answered, is that we see CAPEX in 2028 in distribution of 1.9 billion, but the legal cap will be the 900 plus another 600, so it's around 1.5. So if we should consider the the normalized cap is going forward between 1.5, 1.6, or do you still see room because of the need of investing 1.9 or 2 billion annually beyond 2028? Thank you very much.

Thank you, Jorge. So on cost-cutting, important question there because of course there are areas where we are not putting a particular focus and those areas are mainly the one of distribution because with the current a scheme of, you know, how the regulator decided just to somehow squeeze the profitability of the efficiencies, I mean, there is not so much merit. Whatever you do, actually, you're doing more for someone else. So, I mean, on distribution, it's less of a focus, as well as on nuke. because it's another regulated stuff and super sensitive. So all our effort is basically focused on, as you were correctly mentioning, on generation, but I would say also supply, that of course, I mean, the market is changing a lot. We think that AI will impact this a lot, and the things that we are doing and the restructuring that we are doing will impact it a lot. And as always, the structure and stuff that, of course, you know, given what we are seeing could come as a revolution, it's an era that will be impacted. When we come to question number three regarding the CapEx, yes, you're correct. I mean, the 1.9 billion. Is this over the limit? No, it's not over the limit. You have to remember that basically the limit applies to the 13% of the GDP, the 0.13% of the GDP. The GDP has been increasing, so of course you have this limit that is increasing year by year. And on top of that, you put the expansion that is allowed until 2030. So our plan is designed not to overcome that limit yet, in any of the year. Actually, every year we are slightly below that. We cannot risk to go over that limit. And there was incentives. What was the question?

Sorry, sorry.

Yes, no, I mean, on the incentives, Jorge will not give you numbers, but Yes, there is, of course, an improvement. I mean, we also highlighted that that basically offsets what we've been experiencing as a negative on the OPEX efficiencies. Thanks.

We have now Jenny Ping from Citi.

Thank you very much. A couple of questions from me, please. Firstly, just a clarification question on the power price sensitivity. You said one euro per megawatt hour is 20 million. Is that on EBITDA or net income? Secondly, in one of the footnotes in your slide around the net income issue, growth of 4%. I think you explicitly say in the footnote that you've assumed a 71 million shares in terms of the net result of the buyback. If I take out what you've already bought back in 2025, that implies a sub-30 euro a share of price in terms of buyback. So does that mean that you're expecting a to limit your buyback anything above a 30-euro threshold? So that's the second question. And then thirdly, maybe I missed it. Apologies if I did. Where are you now on the island generation investments, where you've got to on that and the expectation of spending over the next three years, please? Thank you.

Hi, Jenny. So, power price, the 20, it's for the one euro, it's on EBITDA level. On your assumption, I mean, your deduction on the limit of our share buyback, I mean, What I can tell you is that we have been buying share last week. I mean, we just published. We can share it as a public information. We just shared it last night. It was published last night. The program has been buying last week for all the week, and I guess that the price of last week was around, 32 euros per share, I mean, something like that. So, no, I mean, actually, the plan will buy at the price that is the price of the share on the market, basically. And on the islands, on the third questions, regarding the islands, there has been the actually the final results of the tender. And we were assigned with some of those. Actually, we had an extension of life in some of the power plants. Some of this life extension were coming also with incremental capex. And, I mean, that's what we are starting to work on for the near future. It is also worth noticing that there has been also the players then being allocated new capacity in different islands. And we welcome that. And we think that's exactly what it is needed on the islands, and we welcome also the fact that we're not alone in defending the regulation there vis-à-vis the regulator. And in terms of investment, we are, you know, foreseeing approximately 200 million, 300 million along the plan. Thank you.

Okay. We have now Pablo Cuadrado from JB Capital. I will say it again.

Thank you. Good morning, everyone. Yes, a quick question for me. One would be on the tax rate, but it's assuming the plan. I look at the full year results, and there was a decline of 3.5% on the tax rate year-on-year. There were the removal of the tax impact and the revenue impact. It was before, but still, it's basically the 2025 figure at 23.5%. the one that we should assume for the next few years. And second question will be on, I saw that you provided the return, let's say, versus WACC that you get on the renewal segment at around 300 basic points while CapEx is going down in this new plan. I was wondering whether you can share which is the spread over WACC on the return that you are supposed to make on the network investments that they are clearly increasing in this plan. And final one is on the unitary generation supply margin. Jeremy, what you put on the slide hints that you are expecting an increase, and you explained perfectly the reasons. But shall we assume, given that there is no figure, that basically the reference that you provided last year, the 57 euros per megawatt, if I'm not mistaken, it still should be a valid reference for 2028. Thank you.

Thank you, Pablo. So on tax rate, well, you should expect now that we do not have the extraordinary levy, you should expect as approximately, you know, south of 25% generally year on year. We generally... can be lower because sometimes, I mean, we have also investments that are recognized as deduction, for example, in innovation and in this kind of thing. So those, when you have this kind of investment, then you tend to have a slightly lower tax rate. In terms of profitability, actually from expected profitability from our investment, yes, you're right, there are the 300 BPS for what it is greenfield renewables. In the case of networks, we work with 200 BPS. basis points because, of course, the risk profile of those investments is lower and, therefore, it is okay with lower requirements in terms of BPS. And in terms of prices for 2028, I mean, of course, we didn't We didn't put the number there for a reason, but again, you know, I guess that you're not far. What I said is that we're in the range of 55 to 60. So with your 57, you're not very far away from, I mean, you're there basically. Thank you.

Good. This was the last question from the conference call. So thank you very much for attending this meeting. And as always, IRT will be available in case you need something else. Thank you very much. Have a nice day.