Naturgy Energy Group S A

Good morning, everyone, and thank you for joining our webcast for the full year 2024 results and new strategic plan. 2025 to 2027. The agenda is very simple. We're going to be handling and covering the full year 2024 results first. And after that, we will explain and unveil the details of the new strategic plan. as always we will ask you to submit the questions through the webcast in written form and that will happen after the presentation is over okay so without further ado i will hand it over to steven to start off with the 2024 results

All right. Thank you. Thank you very much, Abel. As you've seen in the presentation that we released this morning, we're going to cover a range of topics during today's presentation, starting off with the 2024 results and obviously going to review what the 21-24 strategic plan looked like and the key achievements that the company had. And trust me, we had to be selective because there is quite a few of them. And ending with a view of the 2025-2027 strategic plan together with the financial outlook. So, We ask you for your patience. We'll try to make it as painless as possible and of course leave enough room at the end of the presentation to answer any queries that you may have. When we think about 2024 results, I think it's important to start highlighting the fact that the year has been marked by a very challenging scenario, specifically on the energy side. resulting in lower prices across the board. And you see in the slide that we're introducing here, some of the main references for us. You see that the Brent has gone down, TTF has gone down quite dramatically, electricity prices as well. So across the board, this has been the key theme that we've had to deal with during the course of this year. Despite this challenging backdrop, I think it's important to highlight a few key points for the 2024 results. First and foremost, we think that it's worthwhile highlighting that these are very strong results. These are very strong and resilient results. so much so that we are in line with the record highs that we experienced in 2023. And I think that is remarkable, again, thinking against the challenging backdrop that we just explained. On top of that, we closed the year with a very strong balance sheet that provides us with significant flexibility, and that's something very important when we approach the 2025 to 2027 plan. These results that you see in front of you, an EBITDA of almost $5.4 billion, net income of $1.9 billion, a very solid net debt level of $12.2 billion, and the CapEx of $2.3 billion, is the result of the company's capital discipline. Capital discipline, we want to emphasize, is embedded in the company's DNA. This is something that is going to be a theme moving forward as well. But not only capital discipline, also very importantly, the efficient operational management from the group. We want to highlight this because it's also part of our DNA. We want to do things well and we want to do them better and improve on a day-to-day basis. If we move over to the capital allocation, I think what we highlight here is the fact that the cash flow that was generated by the group more than covered the capex, the dividend, the taxes, and other elements throughout the year. We did 2.3 billion euros of investments. We paid dividends to the tune of 1.3 billion. We paid taxes and levies to the tune of 1.2 billion. This is an important point because it's fundamental to understand the critical role this company also plays to support society and the countries that we operate in. When we think about investments as well, it's also important to highlight that 85% of these were dedicated to networks and renewables. So we are investing in the energy transition. In terms of renewables, we have 7.3 gigawatts of installed capacity today with around 1.6 gigawatts currently under construction. And again, I want to emphasize when we talk about investments in renewables specifically, the relevance of capital discipline within the group. We focus on value over size. We've been talking about this for a while, but it is a key, key principle for Napturgy. It's been in the past. It will continue being so in the future. Strong cash flow generation during the year, despite the energy backdrop that we mentioned before, is something also worthwhile highlighting. This, together with the capital discipline that I just mentioned previously, specifically on investments, has led to a level of net debt of around 12.2 billion euros broadly unchanged if you compare it against last year. If we translate that level in terms of ratios, we're talking about 2.3 times net debt to EBITDA and a very healthy estimated FFO to net debt of around 29%. The average cost of debt for the period also remained roughly unchanged, at 4%, despite increases in that time as a result of increasing in interest rates. It's worth highlighting as well that during the year 2024, the group refinanced and raised financing in excess of 8 billion euros. There's been a lot of work done behind the scenes, not necessarily visible all the time. But this has led to an overall increase in the maturity of the group to five years versus four years previously. And when we look forward to 2025, you can expect naturally to continue working on this front. And together with a very strong effort from the group to continue accessing the markets and financing our operations competitively, we also ended the year with a very strong liquidity position of around €11.2 billion. I'll repeat that again, €11.2 billion of liquidity, equally split between cash and fully committed and undrawn credit lines. So all in all, we'd like to conclude this by saying when you look back at the guidance that we provided in July of last year, we ended up beating it in terms of EBITDA, in terms of net income, and that's something worth noting. I would also like to highlight one thing that is often overlooked because the reality is at the beginning, a year ago, when we were presenting 2023 results, The market expectations for EBITDA for the group were significantly lower than what we have done. In fact, we've exceeded the initial expectations for EBITDA for the group by more than 12%. So this is a testament of the hard work that all our employees dedicate to deliver results. CapEx, as you can see, was just shy of the guidance. And again, that's a function not only of some delays in some projects, but also very important of the capital discipline and the company's ability to adapt to a changing environment. So we are flexible, we are fast, and we're really taking care of our shareholders' resources. Finally, as you can see as well, net debt also closed below the expected guided figure, again as a result of the very, very strong cash flow generation generated through the year. With that, I'll hand over to Rita, who will go over the details for the different businesses.

Thanks, Stephen, and good morning, everyone. Starting with gas networks, gas networks reached in 2024 a total EBITDA of 1.9 billion, accounting approximately to one-third of the group's EBITDA in the period. In Spain gas, networks experienced remuneration adjustments, foreseeing the current regulatory framework, as well as lower demand in residential segments affected mainly due to mild temperatures. In Mexico, the period was mainly affected by negative FX impact. In Brazil, performance was driven by tariff updates in line with negative inflation indexation as well as lower demand mainly in vehicle and residential segments. In Argentina, substantial tariff increased to compensate for past inflation and higher demand with moderating trends in terms of inflation and FX depreciation. Finally, in Chile, the positive comparison versus 2023 is mainly due to higher tariffs on demand, as well as the positive impact of the provision of Transportadora del Gas del Norte litigation. In summary, growth was mainly driven by Latin businesses. Continuing with electricity networks, the EBITDA reached €971 million in the year. This is 14% up to 2023 levels. In Spain, EBITDA increased by a higher regulated asset base due to past investments. And in Panama, the company benefited from both higher demand due to higher temperatures as well as the new regulatory tariffs approved in 2023 that give us visibility up to 2026. Finally, Argentina benefited the same as in gas from relevant growth increases reflecting prior inflation as moderating trends in terms of inflation and effects depreciation. In summary, growth across all electricity networks when compared to 2023. Now turning to energy management, as Steven mentioned before, Evita reached €752 million, that is a 32% decrease versus 2023, and as Steven mentioned before, we had a decrease in energy prices of 30% in terms of gas and 28% in terms of electricity. The figures reflect the price agreement with SonarTrack for 2024 that we reached during the year and that we already published in July 2024. This agreement ensures price reflects current market conditions as well as shows that there is a solid relationship between Sonatrac and Naturgy. It also proves that Naturgy is committed to security of supply. All in all, the period experienced lower margins on sales due to rebalance of energy prices. If we continue with thermal generation, EBITDA reached €602 million in 2024. This is 10% lower to 2023 EBITDA levels, mainly due to lower thermal gas as hydro production has been extremely high this year and also due to new renewable install capacity during the year. In Mexico, just the opposite. We benefited from higher availability and production translating into higher revenues. Let's turn now to renewal generation. Renewal generation reached an EBITDA of €576 million during the year. This is an increase of 9% when compared to 2023. Spain benefited from higher hydro production, as we just mentioned, and also at the commissioning of a new install capacity. In the US, our first solar plant began operations in Texas, and we are currently finishing our second solar plant that we'll expect to become operational in 2025. Finally, Australia benefited from new renewable installed capacity during 2024, more than 500 megawatts in the year. All in all, growing installed capacity and production translates into higher EBITDA. Finally, let's turn to supply activities, a bid that reached 648 million euros in the year. This is an 8% lower to 2023 levels. Power supply experienced lower prices, partially compensated by the removal of the regulated price cuts. Gas to parts for its part experienced margins resiliency in a context of lower energy prices. Meanwhile, the company has recently launched a digital platform to transform client interactions with new artificial intelligence tools. I will now hand it to Steven to wrap it up.