Iberdrola Sa S/Adr

Buenos días, señoras y señores. Buenos días. Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us today for our 2024 first quarter results presentations. As usual, we will follow the traditional format given in our events. We are going to begin with an overview of the results and the main developments during the period given by the top executive team that usually is with us. Mr. Ignacio Galán, Executive Chairman, Mr. Armando Martínez, CEO, and finally Mr. Pepe Sainz, CFO. Following this, we'll move on to the Q&A session. I would also like to highlight that we are only going to take questions submitted via the web, so please ask your question only through our webpage www.iberdrola.com. Finally, we expect that today's event to last no more than 50 minutes. Hoping that this presentation will be useful and informative for all of you, now, without further ado, I would like to give the floor to Mr. Ignacio Galán. Thank you very much again. Please, Mr. Galán.

Thank you, Ignacio. Good morning, everyone, and thank you very much for joining today's conference call. In the first three months, 2024, our strong predictive performance has led to a report net profit of 2,760 million euros, with recurring net profit up 20% compared to the first quarter of 2023. As you can see, reported results in the first quarter are affected by extraordinary ratings both in 2024 and 2023. In 2024, we have included the capital gain from the 5,437 million euro transaction with Mexican infrastructure partners, which has completed in the last days of February with a positive impact of 1.7 billion euros at EBITDA and 1.2 billion at net profit level. In the first quarter, 2023 will register the non-recurrent recovery of previous year retail deficit in UK, with a positive impact of 311 million euros on EBITDA and 238 million euros at net profit. Report to EBITDA reached 5,157 million, with a 10% increase in recurrent terms driven by the higher contribution of all businesses. mainly due to the new rate cases in the US, the UK and Brazil, and the new production and customers will register better performance thanks to the record renewable production in Iberia of the last decade and the new capacity mostly offshore wind. We also record investment of 2.4 billion euros in just three months, a 30% increase versus previous year. Network investment grew by 27% to 1.1 billion, driven by new rate cases in the US, UK and Brazil, with an increase of 85% in transmission, which already represents 40% of the total investment in this business. In renewables, investments are up 50% to almost 1 billion, driven by offshore wind, which represents close to 40% of the total after a 70% increase year on year. We have been able to combine this record level of investment with a further increase in financial strength, thanks to a 40% increase in recurring cash flow reaching 3,145 million euros. And 5,437 million euros proceeds from, as I mentioned, from Mexico transactions collected during this quarter. All in all, FFO to adjust in the debt is already above 25%, as Pepe will mention later on. As you can see, we are delivering in our 2024-2023 plans ahead of schedule in terms of result, investment, cash flow generation, and financial strength. As mentioned, recurring net profits is up 20% year-on-year. Once, we include the positive impact of the Mexico transaction reporting net profit reached 2.7 billion in just a quarter. This was possible thanks to a very strong operating performance across our business and geographies, leading to a 10% increase in recurring EBITDA. The network business has benefited from new tariffs in the US, UK and Brazil and an increase in regulated assets based both in distribution and transmission, partially offset by temporary EFRS adjustment. Energy production and customers increased its contribution as well thanks to 10 years record renewable production in Iberia with higher production from renewable technologies. An additional offshore wind capacity from Saint-Bruyck in France, with all turbines already installed, being gradually commissioned in a process that will be completed in the next three months. And the first turbine from BGR Wind 1 in the United States already sporting energy as well. Finally, retail performance is better than expected thanks to our manageable renewable generation in an environment lower prices. A significant part of our growth was driven by new investment. In the first three months of 2024, we have reached a new record of 2.4 billion euros, up 36% from previous year, with more than 90% allocated to networks and renewables. As anticipated, we presented our planned network business. It's already our first investment destination, after a 27% increase, reaching 1.2 billion euros in the period. 40% of this, of network investment, were allocated to transmission, with an increase of 85% from 2023, and 60% to distribution, with 6% increase, driven by new tariff frameworks in most of our key geographies. By countries, 40% of total networks investment were directed to the United States, mainly New York, due to the increase in transmission and distribution investment included in the new rate case, as well as in Maine, both in distribution of our interconnection line with Canada. Brazil represents 29% of the total investment, UK the 21%, and remaining 10% was invested in Spain. While we continue to have a limit on a lower investment related to GDP growth, that we understand is not compatible with an urgent need of new connections, and therefore we expect it will be removed by the government soon. Driven additional economic growth with a very limited impact on tariff. As a result, all this investment, our asset base, reached $43 billion, up 9% year-on-year. In renewables, investment reached $944 million in the first quarter, 50% up from 2023. Driven by increases of 70% in offshore wind, which contributed 40% of the total investment. And an investment in onshore technology was also up by 43%. And storage investment rose by 70%. Biographies, 36% was allocated to the United States, mainly driven by offshore wind, as we keep progressing in the construction of India Wind 1 in Massachusetts. 24% of the total investment correspond to solar PV, storage, and onshore wind in Spain, followed by 22% allocated to Australia, offshore wind in France and Germany, and onshore in Portugal and Italy. Finally, 80% of renewable investments were directed to the UK, mostly to its Anglia III offshore wind farming construction. These forecasts reflect a very strong renewable performance in the Iberian Peninsula, with an increase in production by 90% to reach a 10-year record of 10,600 GWh. Currently, pricing and environment allow us to maximize pumping storage, dreaming 80% increase in any store up to 2,240 HWh in this quarter. As a result, as today, our reserve is at record levels of 9,500 HWh. The buildup of new offshore wind capacity is also progressing on schedule, with 1.6 gigawatts already contributing to results, including the first megawatt of two of the three offshore wind farms that we are already under construction. Saint-Brieuc in France, 60% of its 500 megawatts are already producing, and the remaining 200 we are expecting in the next three months. In Bingerwind, in the coast of Massachusetts, 130 MW are already supporting energy and the remaining 370 MW are progressing construction. On top of this, Baltic Eagle in Germany has its first turbines already installed and its 475 MW will be fully operational also before the year end. This means that in 2024 we will install 1,100 megawatts more than doubling our offshore wind capacity in just one year. Additionally, we have under construction the offshore wind farms of Windacker, also in German Baltic Sea, with 350 megawatts, and Isangle 3 in UK with 1,400 megawatts of capacity. Both of track to be in full operation by 2026, and with secure route to market. In the last month, we have also continued to secure additional opportunities in this technology for the coming years, like the 375 megawatt HAPO-Noshiro project recently awarded in Japan to Enconstruction with which Iberdrola holds 13% stake. We are currently working with our partners in the supply chains and the route to market for this project with an expected final investment decision no later than 2026. We also have two projects participating in the Round 6 auction in the United Kingdom, East Anglia 2 and East Anglia 1 North, with a combined capacity of 1.8 gigawatts. And the United States, who recently presented bids for the New England multi-state auction, with two projects, New England 1 and New England 2, totaling almost 1,100 megawatts. We expect the result of this auction before the year end. Lastly, we continue securing seabed rights for additional projects for 2030 and beyond, such as Scott Wind in the UK, where we have two gigawatts plus a joint venture with Shell for the development of another 5 gigawatt of floating offshore wind, or Kitty Hawk with 3.5 gigawatts in the coast of Virginia and North Carolina in the United States. As you know, in Australia also, we are expecting a positive result of the auction for Seabed Right in Victoria, where we presented our three-gallon yeast land project. In the last few months, operating gas flow reached 3,145 million euros, a 14th increase in recurring terms. and we continue delivering on our asset rotation and partnership plan. As mentioned, we collected 5,437 million euros from Mexico transaction, and we expect to continue announcing soon additional progress in our co-investment agreement with a Tier 1 partner. All this is driving an ongoing increase in our FFO over net debt ratio, which is now improved by 180 basic points to reach 25%. We now hand over to CFO Pepe Sainz, who will present the group financially standing for the detail.

Thank you very much, Chairman. Good morning to everybody. In the first quarter of 24, EBITDA reached 5,857 million euros versus 4,065 million in Q1 of last year, and net profit 2,760 million versus 1,485 million euros last year. FX evolution has had a minor effect on results. The pound rose against the euro by an average of 3%, the real 4%, while the dollar depreciated 1.1%. There are two one-offs impact affecting the evolution, both in the energy production and customer business. As the Chairman has explained, Q124 has been positively impacted by the sale of Mexico assets cashed in on February 26th. The 1.7 billion euros gross capital gain has been registered at the net operating expenses level, with a 1.1 billion euros post-tax impact. And in Q123, was positively affected by a €311 million retail tariff deficit recovery from 2022 in the UK, accounted as higher revenues, negatively affecting the evolution this year. At net profit, the impact is €238 million, excluding the Mexico 1.7 billion capital gain, a bid that was up 2% to 4%. And net profit grew 7% to 1.6 billion euros. And excluding also the 311 million euros of UK tariff deficit recovery in Q1 23, EBITDA was up 10% and net profit grew 28% as the chairman has presented. A 33% improvement in procurement costs versus an 18% decrease in revenues has driven a 2% increase in gross margin to 6.8 billion euros. And excluding the 311 million UK retail tariff deficit recovery in Q1-23, gross margin grew 7%. As I mentioned at the beginning of my part of the presentation, the 1.7 billion Mexico capital gain positively impacted reported net operating expenses, making them to be 78.5 million positive, as you can see in the slide. Excluding this Mexico capital gain, net operating expenses increased 12% and 8.1%, excluding not only Mexico capital gain, but also mainly the reconciliation impacts in the U.S. due to storm costs that are recognized at the gross margin level also. Analyzing the results of the different businesses and starting by the networks business, it's a bid that grew 2% to 1,692 million euros, driven by a higher regulated asset base and tariffs. In Spain, EBITDA fell 6.8% to 404 million euros, negatively impacted by a 27 million positive regularization of investments recognized in Q123 and higher net operating expenses on this quarter. In the UK EBITDA increased 35.8% to £305 million with higher contribution in transmission thanks to higher tariffs and higher asset base and in distribution thanks to the new framework ED2. In Brazil, EBITDA decreased 0.5% to R$ 3,272 million, with higher tariffs and demand partially offset by lower inflation and lower contribution of transmission due to the deconsolidation of the assets as part of the GIC agreement signed in Q3 of 23. In the US, US GAAP EBITDA increased 8.1% to $578 million, showing the contribution of the new rate cases mainly in New York. IFRS EBITDA was down to $346 million due to a 90 million negative timing effect due to IFRS accounting of higher commodity costs that will recover through 2024. despite higher contribution from the rate cases, especially in New York, as I have commented. Q124 energy production and customer business EBITDA reached 4.1 billion euros compared to the 2.4 billion last year, boosted by the already mentioned Mexico capital gain, partially compensated by a higher comparison base due to the 311 million UK tariff deficit recovery last year. As you can see in the slide, Q124 has had a better recurring operating performance than last year, 1% excluding the Mexico capital gain and 16% excluding also the impact of the UK tariff deficit. In Spain, EBITDA was 1,222 million euros, 2.7% up, driven by higher output, along with lower procurement costs and lower levies. Those positives more than compensate lower prices and a positive effect in gas management in Q1 of last year. In the UK EBITDA fell 11.3% to £514 million, affected by the above-mentioned Q123 positive one-off. Nevertheless, the recurrent evolution of the business with higher contribution in wind onshore and offshore, thanks to better prices and volumes, mostly absorbs the one-off. In Brazil, EBITDA increased 3.2% to R$ 425 million as the global consolidation of 261 MW hydro assets following the swap with Electrobras last year more than offsets the lower wind output. In the US, EBITDA increased 27% to $211 million, thanks to the positive performance of our flexible generation fleet that improved results despite a 9% lower wind production. In the rest of the world, EBITDA grew almost 40% to €282 million, with a 29% higher production due to the gradual entry into operation of Saint-Brieuc, offshore wind farm and more onshore capacity installed. Finally, in Mexico EBITDA reached $2,037 million. Excluding the capital gain, EBITDA reached $176 million affected by the deconsolidation of the assets sold from February 26. Nevertheless, let me point out that the business from the retained assets evolved positively with better prices and volumes. up 30% to 97 million US dollars. EBITDA grew to 4.5 billion euros, compared to 2.7 billion reported in Q1 23. DNA grew 2%, driven by a higher asset base, partially compensated by 14% lower bad debt provisions, mainly in Spain. As you can see in the slide, EBIT excluding Mexico capital gain grew 2% and 15% excluding also UK tariff deficit recovery in Q1-23. Net financial expenses were up only 14 million euros to 524 million. Debt-related costs grew 18 million euros. 23 million increase is due to the 2 billion higher average net debt in the quarter, as the 5.4 billion euros cash proceeds from Mexican transactions were received at the end of February. This was partially compensated by 13 million reduction due to the lower cost of debt, 10 basis points falling from 5.08 to 4.98%, and 8 million of negative FX impact. There is a 4 million increase in not debt-related results. Our reported credit metrics improved versus the end of 23, mainly thanks to a 2.9 billion decrease in our adjusted net debt to 44.9 billion, compared to December 23 debt of 47.8 billion. Mexico cash proceeds have been partially offset by a record capex quarter, as the chairman has commented, dividend payments plus an FX impact. As a consequence, FFO adjusted net debt rose to 25%, improving to 23.2% at the end of 2023. Our adjusted net debt to EBITDA improved to 3.10 times versus 3.32 times at December of last year. Our adjusted leverage ratio was 41.8% versus 44.2% at year-end. Net profit grew 85% to 2,759.7 million and 7% to 1,595 million, excluding the 1,165 million net Mexico capital gain. Excluding also the 232 million net tariff deficit recovery in the UK in Q1-23, recurring net profit grew 20%. Now the chairman will conclude the presentation. Thank you very much.

Thank you. Thank you, Pepe. To conclude, we have started 2024 with a record first quarter in the history of the company. I think it's important to mention that one. Either in recurring terms, either in reported terms. Either as well as record operating performance and investment. This together with the confirmation of our prospect for the rest of the year allow us to improve our 2024 net profit guidance to high single-digit growth, excluding any capital gains from national rotation. We continue delivering on targets presented in our strategic plan, with a record investment of 2.4 billion euros in the first quarter and on the way to reach 12 billion in the full year, also with a very strong operating result and cash flow, and with additional installed capacity, mainly offshore wind driven by Saint-Brieuc in France, Binger Wind in the States, and Batte Illegal in Germany that will become fully operational by the year end. Also, we have 100% of our expected production for 2024 already sold, and higher results on manageable renewables. Record as well. The increasing results and cash flow from all these activities will drive even stronger financial ratios. This set of results shows very clearly the benefits of our model, based on our four key pillars, vision, anticipation, delivery, and flexibility. driving predictable growth and value for all our stakeholders. So, just to conclude, as you know, we have our Annual General Meeting in Bilbao on 17 May, with a wide range of options for virtual participation. Let me invite all of you to join us in this event. You have in our website all the information regarding the agenda, as well our proposal on dividends and the rest of the items. Also in the annex of this presentation, you will find all the details of the shareholder remuneration program, Iberdrola Retribución Flexible, and its key dates. Thank you very much, and now we will be more than happy to answer all your questions. Thank you.

The following financial professionals have asked the question that I will now put to the senior managers present on this event. Alberto Gandolfi, Goldman Sachs, Fernando Garcia, Royal Bank of Canada, Rob Pulein, Morgan Stanley, Jorge Alonso, Bernstein, Gonzalo Sánchez Bordona, UBS, Manuel Palomo, Exxon BNP, Pedro Alves, CaixaBank, Peter Vistiga, Bank of America, José Javier Ruiz, Barclays, Javier Garrido, JP Morgan, Michael Charlton, Santander, Jorge Guimaraes, JAB Capital Markets, Javier Suarez, Mediobanca, and finally, Markita Cohen from Berenberg. The first question is related to the Guidance 2024. Can you please confirm the basis for the new high single-digit growth? Can you confirm the baseline use and whether Mexico capital gains is included?

so the first thing i would like to clarify that our 2024 guidance is based on 2023 reporting net profit not on recurring net profit basically for 2024 guidance so is in 2023 reporting the profit of euros 4103 million so it excludes any capital gain for nasa rotation and partnership does not consider Mexico transaction capital gain of any another resulting from an alliance of asset rotation. So what does that include? Growth drivers. New investment of $12 billion, as I mentioned, in networks with new rate cases in Brazil and United States. New transmission investment. UK additional revenues for investment under Rio ED2 and T2. And in production and customer, the strong renewable production in Iberia. Additional capacity that I strongly mention of offshore wind. 100% of all energy sold at price is secure. Higher reserve for manageable resources, let's say reserves. The consequence is what I mentioned, is increase the outlook from 5 to 7 growth in net profit to high single digit growth.

Q1 regarding Mexico capital gain. What is going to be the final use of Mexico capital gains?

So as traditionally with us, we will use it to maximize future growth.

Next is regarding again to guidance 2024. Given the good Q1 2024 results, can we expect further additional guidance hikes throughout the year as occurred in 2023?

So I insist on that. Given the first quarter result, we have increased our guidance to give you the most updated information, as always with us. Of course, if there are any other trends along the year that make us update it again, we will do it. But at this point, we are comfortable with this high single-digit guidance I'm giving to you.

Next is regulation 1.2 revenue tax in Spain. When should we expect news about the capex deduction mechanism in Spain revenue tax?

No recent news, but we expect investment in the energy transition will become deductible as announced by the government. Nevertheless, you have to know that we have these tax, we are already deductible in our profit because we have already our fiscal resin in the country of us.

Next is related to the net debt guidance for 2024. When should we expect net debt for 2024 to be? Pepe?

Yeah, as I mentioned last time, we are thinking about 47 billion euros net debt, excluding, you know, the minorities purchase. If in the end the minorities of avant-garde is purchased before the year end, obviously we'll have to add that amount to the 47 billion.

Next is related to the net debt, but in Q1. Could you comment on the Q net debt evolution?

Yeah. In the first quarter, as we mentioned, we have had the cash, the 5.4 billion of the Mexico divestment. We have had a record investment quarter, as the chairman has explained. In addition to that, on treasury returns, we've paid a little bit more. So we've ended up with a capex of over 3 billion. We have also had the impact of the dividend payment in this quarter, that it was around 1.4 billion. In addition to that, we have had another 300 million of FX, negative evolution, and a little bit of working capital and other. Typically, in this first quarter, It's the quarter in which we have more of the bills to collect. So in that sense, normally there is a slightly negative impact on the working capital in this first quarter that it is absorbed during the rest of the year. That is what has driven us this 47.8 to 44.9. But as I was mentioning, we are maintaining the 47 billion guidance that I gave you, you know, in the previous results presentation.

Next is related to the upper grid results. What do you expect for U.S. grids at EBITDA level in 2024? Will the recovery in return on equity be reflected in 2024 or gradually throughout 2026? Is it a cost issue or revenues recognition?

Pepe?

Well, as we are expecting, you know, a strong performance in the EBITDA in grids. Basically, as we were saying, driven by the New York rate case. So I think that this year we are expecting this strong performance. As I mentioned in this presentation, there is a negative almost 100 million impact rate coming from IFRS accounting due to commodity purchases that will reverse through the year. So basically, we are still looking for a very, very strong performance of our U.S. business, mainly due to networks in 24.

Next is regarding the CCGTs in Spain situation. You apparently recently announced the closure of all CCGT's plans before 2030. What will be the backup technology for renewables in the future?

So we are not planning to close our combined cycles, I think the first point. Because I think in the short term they provide frame capacity, which is key for the reliability and security of the system. I think even it's going to be more relevant in the current scenario of nuclear closure. We need already, the fact is that we need already mechanisms for the economic viability. I think the system operator is now signaling the problem, so I think it's not only our point, and the Commission has mentioned that one. The electricity market reform, which has been recently approved by the European Commission, consider this capacity mechanism, and the Spanish government is as well initiating the process to carry out this system, which I think is going to be already in the next few months. So I think the fact that we are not closing this combined cycle is absolutely compatible with our targets, given the lower emissions linked to lower production. I think we are going to produce much. I think they will secure, but they will not produce a large number of hours. And I think the emissions they will make will offset the emissions with another mechanism.

Next is regarding networks in Spain and the regulatory situation. Can you provide an update on the discussion with the CNMC regarding the update of the allowed WAC expected for 2026? What are your suggestions for the regulator?

Armando?

Good morning. Yes, I think there is now an open consultation from the CMC. We always said that we need a huge amount of investment in networks, as we explained in the capital market rate. We expect that the rate of return will be something similar as we are seeing in other countries where Energy transition is taking very seriously the development of networks. In Spain, the need of networks is very, very high. There is a huge opportunity for data centers, and we are very confident that the government will move through this direction and will put networks development as one of the main priorities of the energy transition.

Regarding energy hedge in Spain and UK, could you please update on hedge volumes for 2025 and 2026?

Armando?

Yes, as Chairman has said, 100% of the energy this year is already sold. From the period 25-26 in Spain, 75% is already closed and holds its price in line with the plan that we presented. And the final price for customers should be something around 95-105, something around that. In the UK, during the period 25-26, we have secured 65% is in line with the market references.

Question 11, demand growth. How much do you expect power demand to grow across your main regions, Spain, U.S., U.K., over the coming five years, and what will be the drivers?

So I think I mentioned already in CFD clearly that electrification is unstoppable. So I think the electrification in the current advanced economies is already growing in between 1.5% and 2%. And the developing countries is growing more than 3% per annum. So a share of electricity, still you have to be aware, represents only 20% to 25% of the total energy consumption worldwide. And I think that the expectation in this share grows to 30% to 35% by 2020-30, according with the data of the International Agency. And I think from 2030, the expectation is that it will be booming because of the more electrification in many, many uses. Which are the main drivers? I think transport is already, according with the information published today, is expected to multiply by four by 2020-30 and by 19 by 2020-50, electrical transport. In buildings, cooling and heating, more than 50% will be already electricity by 2020-2040. And in industry, the expectation is to increase by 60% by 2040 and continue growing to 2050. What are other vectors of this increase in demand? I think digitalization, artificial intelligence, and data centers are key drivers which are doubling the demand already now by 2026. There's countries like the United States where today the demand for data centers is on the range of 6% to 8%, and the expectation is to double in the next two or three years. So I think there are certain uses today than heating. Today are below 200 degrees centigrade, which is going to be massively used in electrification instead of boilers. So I think it's, I insist, data centers, transport, and industry sectors like food, beverage, tobacco, paper, chemical sectors. So I think only these three sectors, I think food, pepper industry, chemical sectors, are consuming in Spain 70 terabytes, which is roughly close to 30% of the total Spanish demand. So I think a big piece of that one will change drastically the electrification of the country.

Next is related to the power prices in Spain. We have seen that wholesale electricity prices in Spain have been frequently at zero megawatts hour during the month of April. Which impact do you expect from this phenomenon? What are the short-term solutions to solve it?

Armando?

So lower prices due to renewables penetration, I think we were anticipated in the capital markets. Our models when we presented that was very clear that there will be something like that. We maintain our price estimation based on these hourly periods of low prices. Negative prices respond to very specific situation. We can see that very low demand period in the year. Heavy rainfall since October that has increased the reserves in a level of 85% in our case. And also we have a high wind productable during the year and also the increase in PV penetration. So this is something like we expected that with all this phenomenon is disappearing, prices will go to normal. But in any case, we must add that thanks to our hydro pump storage, we are able to capture a huge value of the price volatility from the market.

The next is related to the avant-garde minorities deal. Have Iberdrola and the unaffiliated committee begun discussion on the terms of the deal? Or are you just awaiting for their response after assessing the offered terms? Also, do you expect the unaffiliated committee to consult with shareholders before making its recommendations?

I think the Board has delegated to the Avant-Garde Special Board Committee to do whatever necessary to analyze and to nominate advisors to talk about whatever they will consider. After it, this special committee, the negotiation will follow with a cello, depending as well on the special committee. If eventually we approve, we agree, the merger agreement signed, it will start regulatory approval process. So I think we will keep you informed in the next few months. But I think we are making all the process in a very, very transparent manner with a special avant-garde independent board committee is doing whatever necessary to give already the proper analysis and to negotiate with Verdola the terms after their analysis is made for themselves and for the advisors they will nominate.

Next on M&A, is the company actively scouting for some opportunities to reinvest the calcium from the shale of Mexico? In which sector and geographies is the company intention to grow? Any update on the pending asset rotations?

I think when we make already our proposal of asset rotation and partnership in 2022, I think is somewhere aesthetic. So I think now all our 2025 plan is fully completed, either in asset rotation, either in partnership targets. But we have many additional opportunities in advanced states. But we would like to be selective. I think our focus now is on partnerships. Partnerships which make already value creation. with give us the opportunity of building more projects. Through this partnership, we can share risk in the construction phases and cases. And I think something which is very important, our commitment with the carbonization is 100%. And I think that can help accelerate the carbonization with our own resources, with the resources of our partners.

Next is on the current on fashion topic of data centers. Press argued that you may consider entering into the data center business. Which could be the rationale behind such move and what synergies could you extract from this activity?

So we are in this one. We are already in this moment a contract signed for supply electricity for more than 70 terawatt hours to customers in Europe and United States. But I think for us it's a very interesting angle to catalyze this new electricity demand. And I think we would like to contribute already using our capabilities. to make this data center can be developed and can be put in operation. So what we are making is analyzing how to maximize not only this potential growth demand, electricity growth demand, but as well to maximize the value we can already provide using our capabilities. So saying that, I think, is not new. We are already in this segment. We are in talks with many people, and we will try to help as much as we can all those companies which are developing these data centers to be beside for providing all with our capabilities in electricity, and whatever things we can already give to them to make ready to accelerate the process for these data centers in the countries we have already present.

And last question received is about supply market in Spain. Can you give color on supply market in Spain? Higher competition as prices are lower. What do you expect going forward?

So I think the main things we are observing is that they are already a move from customers from the liberalized market into regulated one. In the same direction, in the opposite direction they were moving already the previous year. So I think they are more moving from regulated tariff. They were moving from regulated tariff to liberalized because the conditions were more attractive. Now they are moving to the regulated one. But I think in any case, we are keeping and maintaining our strong position. Based in what? We have very competitive energy costs. I think I mentioned very many times, we are not selling, we are selling depending what is our cost, not what is the market condition. That's why we have most of our contracts are long-term hedging policies. We are selling most of electricity is already sold a long time. I think it's 100% this year electricity production is sold. Next year is probably 80-90% already sold. And why we can make that one? Because we have the production which is not dependent of the variable cost of the fossil fuels, and because we have already, as Armando was mentioning, storage capacity that we can benefit already in the moments where the market prices are very low, we can already store electricity. We beat our record of storing electricity. electricity in a quarter, more than 2.5 terawatt hours. And we have already offered to the customers not only Atari, but a range of products, including smart solutions and another thing. So that's why I think as a whole, Our total customer base in Spain has far less volatility than other competitors. There has not such a competitive advantage as we have already as we can offer. So that's why we are already quite satisfied how the things are performing.

Okay, without further questions, please allow me to give the floor to Mr. Gallant to conclude this event.

So thank you very much for taking part of this conference call. I remind you again that the 17th of May we will hold the AGM. which will be already attended through different digital channels, but as well we are already present in Bilbao. You are welcome. You would like to be there. So in any case, related to this quarter result, our investor relations team will be as always available for any additional information you may require. Thank you very much, and you are invited to be with us on the 17th of May. Thank you.