Engie Sa Ord

Thank you for holding, and welcome to Engie's first quarter 2026 financial information presentation. For your information, this call is being recorded. It will take place in a listen-only mode, and you'll have the opportunity to ask questions after the presentation. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. I will now hand you over to Mr. Alcindier, head of investor relations. Please go ahead, madam.

Thank you, and good morning, everyone. It's my pleasure to welcome you to Engie's Q1 conference call. Shortly, Catherine and Pierre-Francois will present our first quarter performance, following which we will open the lines to Q&A. And with my polite request of limiting your questions to one or two only, please. And with that, over to Catherine.

Thank you, Delphine, and good morning, everyone. Engie has started 2026. as it ended 2025, in fast-forward mode, especially as we have just closed an hour ago the acquisition of UK power networks, which is allowing us to transform our scale in the critical and growing power grid sector. We have also entered into negotiations towards a full transfer of our nuclear assets and liabilities to the Belgian government. If this process is successful, the Belgian government will be taking responsibility for its country's long-term nuclear future, and Engie will have no remaining nuclear operations there. In terms of results, I can report a solid Q1 EBIT, indeed slightly below the 2025 level, that was benefiting from various tailwinds. The group continues to perform well, with strong momentum in renewables and beds, and relentless rollout of our performance plan. Of course, the conflict in the Middle East has taken up much of our focus. Above all, I am pleased and relieved that staff in the region are safe, and of course very grateful for the professionalism of our teams who have done a fantastic job in managing to keep critical energy and water assets operational under difficult circumstances with limited business impact. We are of course very closely monitoring what is a highly fluid situation. As things stand, when it comes to the energy markets, we are observing disruption mainly to oil, oil products, and LNG supply. LNG represents about a sixth of gas transport volumes, around a fifth of whose volumes are transported through the Strait of Hormuz. This has so far allowed the gas market beyond Asia to demonstrate some degree of resiliency, helped somewhat by new LNG capacities. In terms of power prices, we can see that those countries that have most heavily invested in renewables and nuclear are experiencing the least sensitivity to the current disruption, such as France and Spain. This, in our mind, fully justifies the case for electrification through the combination of renewables, flexibility via storage and molecules, and grid strengthening. This is not the same type of energy crisis as 2022, and Engie is a completely different company with a different and more robust business model. We have built a diverse gas sourcing portfolio, and we've sharply cut our exposure to open market power prices. Indeed, our only significant European exposure is in France, where gas prices have less influence on the power price. So although we're certainly not going to benefit from the high volatility levels of 2022, our earnings are far more resilient, based on more solid foundations, and as a result, far less sensitive to geopolitics. I mentioned in our February presentation that energy is at the top of countries' agendas. By now, it should, if anything, be even more paramount. Security of energy for national governments and affordability for end users of energy are customers. We have recently seen more demands for fixed offers in B2C, while in B2B small and medium-sized customers, the trend towards longer-term contracts has been established for some time. Ample land, resources, and connection have become indispensable for supplying the required additional power to renew demand, it's hardly a coincidence that Texas is such a center of data center development. I strongly believe that having quality physical assets attractively located matters more than ever in today's energy world. And with a renewable and flexible generation portfolio of around 100 gigawatt of capacity, our 47 billion euros of RAB equivalent in networks, 28% of which is power-related, we have a fantastic presence in the physical asset world. This is crucially complemented by our 500 kilowatt hours of energy sales and our unrivaled energy market expertise to partner with our customers in meeting the challenges ahead. Moving on to this next slide, an excellent illustration of energy security being top of government agenda comes with the opening of discussions to transfer our Belgian nuclear assets to the Belgian government. We have signed a letter of intent covering the full scope of our nuclear activities in Belgium, i.e. the seven reactors, as well as all associated assets and liabilities, including the commissioning and dismantling obligations. The letter stipulates that the transaction should not unduly affect our overall financial position, neither adversely nor positively. Dismantling works are being suspended, apart obviously from those critical elements that require constant attention. The aim is to conclude heads of terms by the start of October this year. This is the start of what will be a complex project and negotiation. In the meantime, our teams remain focused on continuing safe and efficient operations and on advancing the planned SEO work programs. Turning to this next slide, some headline numbers. EBIT excluding nuclear was down 7% organically at 3.4 billion euros. compared to the high Q1 2025. Performance improvements amounted to 120 million euros, up strongly from last year, and well on track with a 26 to 28 target of 0.8 to 1 billion euros. Economic net debt fell, mainly due to the capital increase of late February, which will fund a part of the UK Power Network's acquisitions ending the quarter at 41 billion euros, equivalent to 2.9 times EVDA, well below a ceiling of 4 times. With this strong start, and despite the turbulent geopolitical context, I can confidently confirm our guidance for the full year, with net recurring income group share between 4.6 and 5.2 billion euros. Very pleased to report indeed the completion of our acquisition of UK Power Networks just an hour ago. Having raised 3 billion euros through an advanced building at the end of February and a further 2.1 billion euros through hybrid in mid-Ethel, we have now completed the acquisition two months ahead of schedule and less than 10 weeks since we first announced it. UK Power Networks will be fully consolidated as of May, and we expect it to contribute a range of 600 to 800 million euros to 2026 EBIT. I am delighted that Basil Casela and his 6,500 colleagues are now part of our group, and we are all thoroughly looking forward to a long and fruitful collaboration in the years to come. We've also achieved further expansion in our Latin America power network business organically via the award of a 143-kilometer transmission line project in Brazil and by acquisition of 132 kilometers of lines in Peru. Truly, we can say that we have achieved our aim of being a key player in the critical infrastructure activity of power networks, which now accounts for over a quarter of our networks regulated as a base and a third of our network EBIT over a full year. With all the focus on networks and nuclear, I want to emphasize that momentum remains strong in renewable and DES backed by a robust and balanced pipeline of projects, unchanged targets to 2030, and laser-like focus on execution. Over the first quarter, we added renewables and DES capacity in India, in Chile, in Italy and in France, taking a total to 57.7 gigawatts. We signed a PPE for a 900 megawatt onshore wind farm in Egypt, our largest yet. And in Brazil, our largest solar farm as you saw reached full commercial operation. At the end of Q1, we had 6.6 gigawatts under construction with 93 ongoing projects. and continuing a track record of very efficient execution. Turning now on bets, the U.S. and Chile have tended to dominate attention with over 90% of our 4.7 gigawatt capacity at the end of last year. But in early 2026, we are making strides in Europe. In particular, we started construction of our first best unit in France at 110 megawatts, and we are acquiring two standalone projects in southern Spain, totaling 278 megawatts of capacity. With these new projects and 700 megawatts already in operation or under construction, we have achieved a milestone of 1 gigawatt of best capacity in Europe. So, energy on fast forward in a rapidly changing energy world, and now I will pass it over to Pierre-Francois.