Endesa Sa Madrid

Good morning everyone and thank you for joining us today for our nine months 2026 results presentation. With me are our CEO Mr. Gianni Armani and our CFO Mr. Daniele Caprini. Before we start let me remind you that after the presentation we will move to the Q&A session and as on previous occasions we will only take questions submitted in advance by email or through our website. Thank you once again and now I would like to hand over to Mr. Armani.

Thank you, Isabel. The first nine months of the year delivered solid financial results with the BDA up 8% year on year. Net income grew by 15% while the contribution of regulated business increased, further strengthening the quality of our earnings. These results also reflect our Thank you very much. Thank you very much. On slide 4, BDA growth is heavily driven by the contribution of our regulated business, which increased from about 40% to approximately 50% of total EBDA, reflecting the growing weight of network and non-mainland generation and further improving the visibility and predictability of our earnings. The solid performance translated into net income of 2 billion, representing an EBDA to net income conversion of 43%. Finally, cash generation was strong, with EBDA to operating free cash flow conversion around 80%, while our leverage remains flat. Thank you very much. and a clear recognition of the need to reinforce and expand the grids. The approved increase in CAPEX limits for the next four years together with the promotion of flexible grid access should help accommodate a new demand in areas where available capacity is currently constrained. In particular, It is worth putting the role of network investments into the right perspective as they are not a cost burden but an enabler to growth and electrification. The resulting rise in access tariff revenues As the demand vectors are incorporated, more than offsets the increase in system cost and the increased demand helps reduce the overall tariff. On generation, security of supply remains a key priority given the scarcity of firm capacity as proven by the TSO request to delay maintenance works as well as the repeated activation of active demand response service for large consumers. Recent developments include the extension of the Almaraz nuclear license until June 2030, the approval of capacity market network with auction still pendings, and the launch of the capacity allocation process for non-mainland territories. Finally, on demand, data center Long Beach, With real estate and industrial developments represent significant opportunity for electricity demand growth in Spain. However, unlocking the potential will require an appropriate regulatory framework and sufficient grid availability. The current draft of regulation of data center remains demanding and therefore more proportionate condition will be key to support the future investment and help capture the opportunity. Turning now on slide six, let me spend a minute to comment the market dynamics driving the activity during this period. Following a couple of quarters in which electricity prices showed a relative decoupling from global market trends, during the third quarter of 2026, pool price absorbed For exceeding the 100 euro per megawatt hour mark, reflecting the impact of stronger summer demand amid rising LNG prices and in particular lower wind and hydro production. In addition, ancillary services cost increased 34% year-on-year to €22 per MWh, affected by the TSO reinforcement operations still in place. Against the challenging microeconomic backdrop, fundamentals remain supportive as mainland demand continues to grow and at a healthy pace. confirming the structural electrification trends that underpins our longer-term outlook. In particular, in the first nine months of 2026, mainland electricity demand grew by 3.3% or 1.6% in adjusted terms. Demand growth was widespread across all customer sectors, In particular, residential demand recorded the strongest increase, up 5% reported mainly by temperature effect on consumption. Services grew by 3.1% while industrial demand increased by 1.3%, showing a clear sign of recovery compared to previous quarters. Recent market developments have highlighted the role of fixed price energy contracts that shield customers from market volatility, while regulated tariffs have been directly impacted by rising energy prices. Moving on slide 7, we continue to accelerate our investment plan with growth in capex and gross capex increasing by 19% year-on-year to 1.6 billion. This investment effort continues to support operational performance. In network, losses have improved to 9%, while electricity distributed... Thank you very much. and an output reached 15 terawatt hours with 85% of mainland production coming from emission-free technologies. Finally, the supply business, as previously anticipated, we expect the customer trends to reverse in the short and medium term. Thank you, Gianni. Now, turning to slide 9, the reported BDA...

amounted to 4.6 euro billion, including a 0.2 billion workforce restructuring provision. Excluding this effect, EBITDA grew by 13%. Net income rose by 15% to 2.0 billion euro, while net ordinary income, which is not affected by the said provision, increased by 22% to 2.1 euro billion. Net financial debt was 1.1 euro billion higher to 11.2 euro billion with the net financial debt to EBITDA ratio remaining at 1.8 times. Moving to slide 10 we are going into the details by business at the EBITDA level. The strong performance during the period is mainly due to the contribution of networks EBDA, which rose by 25%, while generation and supply EBDA grew by 3% thanks to strong results in customer and non-mainland business, which were partially offset by a decline in renewables. Turning now to our network business on slide 11, the gross margin increased by 20% year-on-year to 2.2 euro billion, mainly driven by the new regulatory framework enforced since January 2026 and previous year's resettlements resulting from the update of certain remuneration parameters booked in Q1 and Q3. Within this more favorable context, we significantly accelerated investment with the network's capex up 42% to €0.9 billion, devoted to grid strengthening and expansion to support growing electrification. This accelerated investment is translating into continued RI rub growth, reaching €11.3 billion. Turning now to generation and supply, gross margin slightly increased year on year, underpinned by the resilience of customers and the stronger contribution from non-mainland generations. Customers gross margin increased to 1.6 euro billion driven by a solid gas business and an improvement in power supply margin, which benefited from the contract revision and hedging strategies carried out as well as from lower sourcing costs which largely absorbed the rise in ancillary services. Renewable gross margin decreased to €0.7 billion despite cumulated higher volumes as a consequence of weaker achieved prices and a more negative shape effect, particularly in the third quarter with stronger solar output and lower wind and hydro resources. The conventional generation remained broadly stable at 1.8 euro billion. This was mainly supported by no mainland generation with regulatory framework improvement including higher remuneration rate and better O&M recognition, fuel cost optimization and the positive impact of previous years' resettlements and court rulings. This was partially offset by the normalization of the gas management margin. Now, on slide 13, turning to integrated power and gas unitary margins, the free power margin remains broadly stable year on year at €53 per MWh, reflecting the dynamics previously commented in a scenario of lower sales. For full year, we expect it to hold at this level. Looking ahead, we maintained a strong power edging position with around 98% of 2027 and 65% of 2028 volumes already secured. In gas, unitary margin declined by around 9% to approximately €9 per MWh, normalizing from previous levels, while total volumes slightly decreased to 52 TWh. We progress on 2027 and 2028 hedging strategy amid the current volatile price scenario. Moving to slide 14, efficiencies continue to deliver tangible savings with adjusted fixed costs decreasing by 8% year on year. This gains more than offset inflationary pressures and the cost associated with business growth supporting the ongoing reduction of our cost base. Beyond these results, we advanced our transformation plan initiatives aimed at structurally reducing our expenses and simplifying the organization. This includes greater digitalization, automation, NII and to end process simplification. Moving now to slide 15, net ordinary income reached 2.1 euro billion, up 22% compared to previous year, reflecting the strength of underlying operating performance and positive non-recurrent effects. DNA slightly increased to 1.7 euro billion linked to higher investment. Financial results improved by €0.1 billion year on year, mainly driven by late payment interest income, recognized following several favorable administrative and judicial rulings. Finally, the effective tax rate remained broadly stable at around 24%. Turning to next slide, the cash generation remained robust with the operating free cash flow reaching 3.5 euro billion and representing a strong cash conversion of around 80%. Net financial debt increased by 1.1 euro billion, the solid cash generation largely funded investment needs while also supporting €2.6 billion of shareholder remuneration, including the dividend paid and the approximately €0.9 billion related to the share-buy-back program. This strong financial position is also reflected in an operating free cash flow to net debt ratio of 36% over the last 12 months. as well as the solid leverage ratio, which provides us with a significant headroom to accelerate investment and capture future growth opportunities. And now I hand over to Gianni for the closing remarks.