ERG S.P.A.

Good afternoon. This is the Coral School Conference operator. Welcome and thank you for joining the ERG second quarter and first half 2026 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Paolo Meltli, CEO of ERG. Please go ahead, sir.

Good afternoon, everybody, and welcome to our second quarter and first half results webcast. Here with me, as usual, is Michele, our CFO. Before commenting on the economic results over the period, I'm on page number four. Let me put them into context. Once again, and same as last year, the periods for the first half and the second quarter were characterized by lower wind speeds than the historical average. But while Q1 was better year on year, Q2 was more or less S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. which we could expect for the second part of the year, but I'll elaborate a little bit more on that in the next chart. So, back to results against this backdrop of low wind. The first half EBDA was 295 million euro, plus 9% euro near, let me say a solid set of results. And even looking at Q2, notwithstanding lower productions, S.P.A. Looking more specifically at Q2, the contribution from new installed capacity basically offset the lower productions on a life-for-life basis. Then the upside came from what was overall a positive price effect due to a combination of factors that is not so easy to summarize. Let me try it. Contrary to common belief in Italy, we had an average realizing price that was lower year on year, mainly reflecting the execution timing of hedging derivatives, so contracts that you know are closed typically well in advance of delivery. On the other hand, We enjoyed better selling prices in other geographies, such as Eastern Europe, USA, and UK. With the latter, I mean UK performing very, very well as a country. We also had a higher year-on-year contribution from capacity market in USA, as well as from managing productions effectively during S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. mainly reflecting, say, the dividend distribution, the higher capex, and partly compensated, say, by the solid cash generation over the period. Let me move to page number five, commenting the deep dive analysis we conducted on wind resources, given the lack, say, of it... S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. historical average. I think you are getting used to this chart. Let me now elaborate more on our internal analysis. In June 2026, this is a fact, major global agencies including the World Meteorological Organization, the UK Met Office, formally issued an El Niño advisory confirming that conditions have developed and will persist. So there is a high likelihood, according to reports issued by these entities, that this El Niño pattern will last through the end of 2026 and persist into early spring of 2027. In light of this, we recently conducted an empirical Let me stress empirical analysis to understand our assets and consequently our production levels performed in the past during El Nino periods. We observed, and I'd like to emphasize that this analysis is empirical rather than scientific, that production generally exceeded budget during El Nino periods. As is clearly shown by the graph, we circulate the quarters where the El Niño was, say, intense, with an intensity index above 1%. So, of course, weather remains difficult to predict and influenced by several complex meteorological phenomena. But this could provide, let me say, at least internally a supportive backdrop and upside to our full year guidance. But let's see, because in the end it will be as it is. Now let me comment our achievements, say, during the period, in the first half of the year, and comment on page number six. I think we kept delivering on our strategy. On growth, we are moving on with assets under construction in line with our budget. We energized a few weeks ago Acro in Germany, a 22 megawatts greenfield wind farm. I'm happy to say that we successfully integrated S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. and a revamping program for a portfolio of 60 megawatts of photovoltaic assets in Italy. When talking about revamping, PV revamping, installed capacity, I want to be sure the message is clear, installed capacity will remain unchanged, but given the cutting-edge technology with new panels and trackers, we expect a significant increase in productions, which will enjoy the incentives of Contra Energia until the end of the scheme. Our pipeline is moving on very well as well. The objective to secure building permits for a material amount of projects that you should remember was our priority. One of our priority for 2026 is gaining visibility. We can now rely on 570 megawatts fully authorized, 330 wind powering, not just in Italy, but also in France and Germany and UK. And 240 megawatts is the best. For sure in the next months, we'll be working hard to get these assets ready for the next auction. In particular, I'm talking about Italian assets. S.P.A. value creation. For sure, we'll be working on that in the second part of the year. On route to market, we continue during the semester our path of signing long-term BPAs. Others, contracts around the negotiation we sort. Never say never, but we hope to deliver more of these by the end of the year. On finance, S.P.A. S.P.A. S.P.A. S.P.A. S.P.A. Thank you, Paolo, and good afternoon. I'd like to start with the observation of the electricity demand trend in the first half of the year.

After a long period of stagnating demand, we see positive signs of recovery in all countries where we operate. This is driven by climate factors, industrial demand growth and the first effects of the electrification of the demands. And it is in line with the forecast of all the major industry experts that see a structural upward trend for the power demand in the medium to long term. Looking at the spot power markets in the second quarter, prices were higher year on year in all countries where we operate. This trend leads to an increase in unitary revenues in most countries, even if the impact on our unitary revenues was only partial, reflecting the post-elaborative nature of our portfolio, where a large share of volume is already secured through PPAs and CFDs, all covered by our three years rolling edging policy. I would like to highlight the higher capital price in the UK, driven by our newly acquired assets in England, which benefit from renewable obligation certificates. And on the other hand, we see a new unitary revenues decrease in Italy, mainly driven by short-term hedging at a lower price and by the reduction of the green cent. Moving to the production, in the second quarter, ERG generated 1.6% of a tower, 3% lower than previous year. following the low windiness trend already recorded in 2025 in most countries. We are still recording production well below the long-term historical average of our assets, as already commented by Paul. The production of the quarter is also affected by higher grid curtailment. This effect was partially compensated by the production of a new asset with roughly 70 megawatts of additional capacity contributing during the quarter. In the second quarter, we have almost doubled the production in UK, mainly thanks to the new acquisition in England and the production of a new greenfield plant entering operation in Northern Ireland at the end of the year. The first half of the production is 3.9 terawatt hour, 0.3 terawatt hour higher than previous year, mainly driven by higher windiness in the first quarter of the year. In the second quarter, EBITDA reached 1.129 million, a slight increase against the second quarter of 2025. The positive perimeter effects was offset by slightly lower production and lower capture prices in Italy and France. Thanks to the last acquisition in England and the new greenfield plant in Northern Ireland and some recovering wind, the U.S. and the U.K. doubled the EBITDA of the previous year. On the other hand, Italy is impacted by lower aging prices and green incentive in the comparison with the second quarter of 2025. In the first half, Group's result is 25 million higher than previous year, mainly driven by first quarter results. I comment now on the investments. In the second quarter, we invested 54 million, mainly for ongoing activities on repowering projects in France, Germany, and Italy, and for the construction of greenfield plants in Germany and France. In the first half, the investment stands at 203 million, of which $115 billion are related to the acquisition in the UK. Finally, let's take a look at the cash flow statement and the net financial position. The net financial debt at the end of the quarter is $1.9 billion, in line with expectation, and $57 million up versus the end of 2025, thanks to the BDA cash generation and the disposal of other Swedish assets in January, compensated by investment over the period. The second quarter, the national position is impacted by $150 million of dividends paid to our shareholders. So thank you for your time. Now I leave the floor to Paolo for his final comments.