Naturgy Energy Group S A

Good morning, everyone, and thank you for joining Naturgi's first half 2026 results presentation. I hope you're well. This is Abel Arbat speaking from the capital markets team at Naturgi. Presenting today are our executive chairman, Francisco Reynés, the general counsel to the board, Manuel Garcia Cobaleda, the global head of financial markets and corporate development, Mr. Steven Fernández, and the Global Head of Control and Energy Planning, Ms. Rita Ruiz de Alda. As usual, we will run through the presentation first and then open the floor to questions. Before we get into it, there is a small change in how we manage the Q&A session. From today, we will have the opportunity to ask live questions through the conference call We also maintain the possibility to submit the questions in written form if you prefer. A reminder that the questions should be done by equity analysts and investors. So at the end of the presentation, the operator will remind you of the mechanics to ask your questions live via the conference call. So with that, I will hand it over to our executive chairman, Francisco Reynés.

Hello, good morning, everyone. Thank you for taking the time to join us. And it's a pleasure to address to all of you today on this first half results presentation for year 2026. Before going into numbers, I would like to spend a few minutes on strategic positioning, because as you may think, the year 2026... After this first part, we will then move to financials, first global and second business performance. And as a last part, we will look... on the year and the half year ahead, 2026, and talk about how we are seeing the guidance for this year. Therefore, if you allow me to ask you to move to page number four. Page number four, key messages of that page has to do about the recent changes in the company, and key messages we would like to give to you is number one the substantially increase on the free float that today is about 46% and clearly if you remember it was one of the most important targets of our strategic plan 25-27 and it has been achieved just after a year that we launched the Self-Takeover in June 2025. Second important message is about the overhang. During many months since that date, we have been suffering overhang concerns related to the position of certain large shareholders. Now, these concerns have been cleared. Third message, it has to do with the current shareholding structure that in principle is leaded by the market over 46% of free float with two reference shareholders, Criteria Caixa and IFM Investors that are clearly aligned with a common long-term vision for the company with a clear objective to grow and add value. As a consequence of these movements, we have simplified the governance and as the most important outcome, the special majorities included in the bylaws of the company have been removed The company now is more agile to take decisions of investments, disposals, financings and other key business decisions. As we said in the page number four, we are now very well positioned to take advantage of the And finally, as always, I think that we have been recognized by the market and it has been our most important objective to deliver our commitments, our track record of financial discipline, our track record in making the company more operationally efficient and at the same time delivery our commitments and many others. These efforts towards value creation objectives have been helping us from our point of view to start facing a new phase with very positive pillars. If we move to page number five, I wanted to remark, there are many, many data here, but I wanted to remark why we think today Naturopathy is well positioned. because of our diversified and resilient earnings profile. Second, thanks to our strategic gas and energy infrastructure in Iberia that helps to warranty a sizeable generation fleet. Third, because the sizeable generation fleet together with a large customer base Thank you very much. Around 500 million per year savings on annual OPEX can be compared to the 2018 baseline that is leading us as the most productive and efficient utility in the European industry. And sixth, as I said before, an attractive cash yield and balance sheet had room with a leverage which is around two point times EBITDA with an SP FFO net debt metric of over 30%. I remember to all of you that 18% is the threshold for maintaining triple B, which means we are clearly far above. You gave us a very compelling from our point of view position for our shareholders. If we move to the next page, we have been talking in the last presentations about the opportunity that an integrated model provides the company as a resilient platform for growth. These pillars that come together in our integrated model are really one of the most important backgrounds of the company. Our presence. Across both value-added changes, gas and power give us resilience, complementarity, operational synergies, and integrated margins. This is clearly non-replicable in the case of the pure players. In electricity generation, We have flexible gas turbines and renewables vertically integrated in Spain and contracted in the case of our electricity generation plants abroad. In electricity networks, we have a platform for electrification which we consider attractive regulated returns. In the case of the gas and LNG procurement, forming part of the energy management, We benefit from a diversified portfolio. And in gas networks, we play a key role in energy transition, and we consider, as it's demonstrated in many countries in Europe, that these are enablers of renewable gases to be established. And altogether, in the center of all our business, Over 17 million customers, we provide integrated margin optimization and they help us to get a natural hedge across the whole portfolio. In our view, this is what makes sense and generates worth much more than the sum of its parts. We'll move to the next page, please. The platform we have today give us multiple organic growth levers across our core markets and we have also significant optionality to accelerate. Let me specify some of them. In networks, our objective is to continue be investing on adequately remunerated and stable frameworks. In gas Spain, for example, the proposed 2732 new framework is continuity based, but introduces relevant incentives for digitalization and biomethane introduction. In electricity in Spain, for example, we expect very soon a lift on the investment cap that will allow us to invest more and quickly with an adequate remuneration. In Latin America, the visibility continues to improve and consolidate a much higher level of profitability than we had years ago. On the renewable side, we see organic growth through hybridization, repowering and storage. These are the three key fundamental pillars of our organic growth. We have one gigabit coming online this year and over two gigabytes more in 2027 onwards. In these two over two gigabytes of new capacity, more than half of it is around batteries as a clear As a clear attachment to the existing renewable generation that will help us to capture higher prices and higher margin in the electricity delivery. On gas turbines, increasingly is a key actor in ancillary services. As you know, we had Almost five terabytes of energy in the first half and in Puerto Rico, 400 megabytes on a tender that we expect to get, in this case, news on the final decision by this summer. Data centers. We have an opportunity to unlock value with limited capital. 900 megawatts already in projects under development and 2 gigawatts in our pipeline. In renewable gases, we have the largest biomethane pipeline in Spain with over 75 projects and more than 5 terawatts of energy. We see a context which is increasing in favorable But we are seen at the same time to support our positive vision that we had introduction of mandatory biomethane consumption targets by the regulators. And on energy, on efficiency, sorry, further upside is expected in our new efficiency plan, which is supported by our track record, and in particular, through the EI as an enabled process optimization. Within that, artificial intelligence may help us to be even more productive and more accurate. In summary, I would say that we have multiple organic growth levers across our core markets. If we turn to page number eight, I wanted just to show three important messages on this page. As you can see, our metrics are clearly better than the ones we had in 2018. That's the reflect of a very tough war by the team in the last seven years. But altogether, this is translated into between 10 to 12 billion euros of firepower that we are going to give us flexibility for any project based on two key restrictions. Number one is maintaining triple B rating of Standard & Poor's as a floor and second, maintaining strict capital discipline on value creation. We are not, I want to remark this idea, we are not a distressed buyer on any project anywhere at any time. On page number one, to finish my part of the presentation, I wanted to address exactly the point I mentioned before as discipline for our investment criteria. What we are, Today is that any capital we want to deploy should be anchored in our famous value over size proposition. And we will guide by clear criteria, which are the following. Number one, in terms of portfolio and risk profile, we will focus on hard currency geographies with a clear bias towards electricity and regulated or vertically integrated assets. In terms of growth and strategic feed, we prefer projects which embedded organic growth, where there is clear, strong, industrial rational, and where we can achieve synergies as an upside. What it refers to financial discipline. We look for projects that are creative in terms of EPS with returns, which are value of creative, clearly above our weighted average cost of capital and consistent again, as I said on these threshold or triple B rating. And finally, One very clear restriction for the management team is that we want to control and execute these projects and to warranty that it may happen. We want clear control positions and clear alignment with our stakeholders. So to summarize this first section, I wanted to remark again, the overhang is clear. Thank you for listening and I give the floor to Steven.

Thank you, Paco, and good morning, everyone. Thank you for joining us. It's always a pleasure to be able to come to the market with very good results, and I think that what we have presented today in terms of the first half of 2026 are results to be proud of. Not only are they good results, they're also results that allow us to upgrade our guidance for the full year. Overall, what you've seen today is a strong operational and financial performance despite the volatile environment. In fact, the earnings growth of 6% is underpinned by the robustness of the integrated model that our chairman has just exposed. We also continue to generate strong cash flow and continue to apply that cash with discipline. This led to a decrease in net debt, although we remind you that net debt for the rest of the year should increase by around 400 million euros, taking into account a one-off Sonotrack payment. We've also taken the chance yesterday in the board to approve the first dividend against the year results of 60 euro cents per share in line. with what we announced last year fully aligned with what we have presented in the strategic plan and which will be payable on the 29th of July. In headline terms EBITDA reached almost 3 billion euros that's up from 2.8 billion euros a year ago and net income rose to 1.2 billion euros up from 1.1 billion euros a year ago. So obviously you can tell from these numbers That we have now the confidence to confidently upgrade our guidance for the rest of the year. If we think about it in terms of the evolution by business, looking to page 12, and we think about it in terms of the EBITDA bridge, growth has been led by our regulated activities, which is also something interesting, and by thermal generation. These two contributions more than offset software contributions elsewhere. So if we think about it, for example, in terms of distribution networks, they added around 180 million euros to the EBITDA line, and they were in fact the main driver of growth in the half. Remember that there is a one-off of around 74 million euros that we flagged last year, and we also flagged in the Q1 included in this number. Thermal generation contributed close to 50 million euros on the back of strong ancillary services demand. And as I said before, these more than offset the lower contributions from energy management, which is down around 10 million euros. Renewables also down around 10 million euros and supply close to 70 million down, which we will cover in Rita's presentation shortly. So all in all, it's a broad-based delivery that reflects the diversification and the resilience of the integrated model. If we think about it in terms of cash flow, and that's on slide 13, the picture is one of continued strength and flexibility. Funds from operations remain robust at around 2.3 billion euros, and the free cash flow after minorities reached almost 1.3 billion euros, which have allowed us to fund the dividend while still reducing net debt from 12.3 billion to around 11.7 billion. In this sense, it's worthwhile highlighting that our credit metrics remain solid, with FFO to net debt at around 30%, that's 3-0, which is comfortably above the 18% BBB threshold. As I mentioned, net debt, remember, will rise by around 400 million euros in the second half of the year as a result of a one-off Sonatrack payment. But even so, the balance sheet remains strong, and gives us significant strategic flexibility as the chairman outlined earlier on. With that, I'm going to hand it over to Rita to go over the specific business units and then we'll finish off with the outlook.