Iberdrola Sa S/Adr

Buenos dias, señoras y señores. Good morning, ladies and gentlemen. First, we would like to extend a warm welcome to all of you who have joined us today for our 2025 fiscal year results presentation. As is customary, we will follow the traditional structure of our events. We are going to begin with an overview of the results and the key development during the period. The presentation and the Q&A part will be delivered by the top executive team joining us today. Mr. Ignacio Galán, Executive Chairman, Mr. Pedro Zagra, CEO, and finally, Mr. Pepe Sainz, CFO. After the presentation, we'll move on to the Q&A session. I would like to remind you that we will only be taking questions submitted through our website. please send your question exclusively via www.iberdola.com. Finally, we expect today's event to last no more than 60 minutes. Should any question remain unanswered, the IR team will, as always, remain fully at your disposal. We hope that this presentation will be useful and informative for all of you. And now, without further ado, I would like to hand the floor over to Mr. Ignacio Galán. Thank you once again. Please, Mr. Galán.

Thank you, Ignacio. Good morning, everyone, and thank you very much for joining this conference call. In 2025, reported net profit reached €6,295 million, up by 3%. Even excluding €464 million on cash charges to adjust the value of our renewable pipeline in different countries. Excluding those charges, net profit would reach €6,749 million. Adjusted net profit, which as you know excludes the impact of capital gains, increased by 10.3% to 6,231 million euros above our gatherings. Adjusted EBITDA rose 15,684 million euros, up 3%, with 21% increase in net worth, reflecting our high-regulated assets base in improving framework in our core geographies. Partially offset by non-recurring impact of ancillary service costs in our power business, due to the reinforced system operation in Iberia, as well as lower prices. Total investment reached €14,460,000,000, with two-thirds allocated to transmission and distribution networks, driving the trapezoid growth in our regulated SSBs in just one year to almost €51,000,000. In power and customers, we added 2.7 new gigawatts in operation, and we have 4.7 gigawatts more under construction. The bull is reproducing next quarter. This stock expansion was combined with a further improvement in efficiency, thanks to an increase of only 1% in our current net operating expenses, well below gross margin. In financial strength, with net debt down 1.5 billion euros driven by an 8.2% increase in our operating gas flow up to 12,811,000,000 euros, This positive impact of our asset rotation and partnership plan and the capital increase last year, improving our FFA on adjusted net debt ratio to 25.5 comfortably in the range of BBB plus rating. Finally, yesterday the Board decided to propose to the General Meeting a total dividend of 0.68 euros per share. As you can see, 2025 has been a transformational year for Iberdrola thanks to the implementation of our strategy. In the last two months, we have made remarkable progress in all the pillars of the plan we presented a year ago, reinforcing our focus on network infrastructure with transmission as a new growth vector in the UK, where we have secured 14 billion euros of Totex for the next five years under Rio T3, including settlement interconnection like Eastern Green Link 1. In the U.S., after the commissioning the NCEC interconnection between Massachusetts and Canada. And now also in Australia, where we were recently awarded 1.2 billion line in the state of Victoria, as we expect to complete by 2030. On top of that, we have also continued increasing our distribution investment and progressing in the definition of new frameworks for the coming years in all our countries, mainly in Brazil, where the regulator has already approved the renewal of our distribution concession for 30 years, more providing us visibility up to 2060. In addition, the organic investment in the asset rotation transition completed in 2025 has also confirmed our strategic focus on networks, mainly due to the acquisition of electricity in the Midwest not fully integrated in the approaches of our grid and energy minorities. This record activity is also expanding our contribution to social development and geocreation across our geographies. With 4,500 new hires in 2025, and a total workforce of 45,400. 13.2 billion euros of purchase to thousands of companies that support half a million jobs across our supply chains. A tax contribution of 10.4 billion euros and 425 million euros allocated to research and development, reaffirming our position as leading private utility worldwide innovation. Thanks to our performance in 2025, we are facing 2026 as the beginning of a new growth phase. But before that, and given that we are from Bilbao, let me share with you the few figures that show our transformation over the last 25 years. Since 2001, we have multiplied our total asset base by 8 times, to 161 billion euros. Driven by the expansion of regulated networks, asset base, to 51 billion, 10 times more than 2001. Our generation capacity from 16 to almost 60 gigawatts today. And our storage capacity was multiplied over three times thanks to the investment made in existing hydro turbines to make them reversible, new palm storage facilities like Tamega and battery projects across the world. On top of that, our international expansion has fully transformed Iberdrola from an utility base in Spain with just 1% of our activity in other markets in 2000 to a global utility with 65% of our business in the UK, US, Germany, France, Brazil, and Australia. As a result, we are reaching our 125th anniversary, consolidated as the largest utility in Europe and one of the two largest worldwide with a market cap of about 135 billion euros, 12 times more than 2001. Even after paying 47 billion in dividends across the last 25 years. And you can be sure that the key pillars of this growth story where our vision, our strategic coherence, our ability to anticipate the short-term shift in the sector across our access to financial resources and supply chains, and our short-record execution. And are also, all of them, the best guarantee to sustain growth in the coming years. we are demonstrating we are a company then always we fulfill our promises even we over fulfill our promises we over deliver what we promise it's a bit different with others with their promise and they're not delivering as much as they are promising traditionally moving to 2025 Result, adjusted EBITDA reached 15,684 million euros with two-thirds coming from international business. The United Kingdom contributed with 3,306 million euros and U.S. 2,662 million. Brazil, close to 3 billion, and EBITDA from other European countries and Australia reached 791 million euros, with Iberia contributing the remaining 6 billion euros. As a result, 81% of our group EBITDA is already coming from A-rate countries. By businesses, networks adjusted EBITDA grew by 21%, thanks to higher regulated asset base in all countries, new tariffs in the U.S. and Brazil, and reconciliation in electricity in the U.S. While renewable power and customer EBITDA fell by 10%, as a result of lower market prices and the impact of the so-called reinforced operation implemented by ReElectro in Spain, partially offset by the addition of 2.7 gigawatts of new installed capacity worldwide. Total investment reached 14,460 million due to the acceleration of organic growth and the acquisition of energy minorities in Brazil. By countries, investment increased by 34% in the UK, driven by 47% rise in net worth due to the new transmission project and the ongoing investment of Scottish distribution manned web and electricity in the West, UK investment in power also increased by 21%, mainly in Assembly A3 offshore wind farm. The US investment increased by 2%, as the growth in transmission and distribution more than offset the slightly lower investment in power after the completion of projects under construction. Combined, US and UK contributed 60% of total investment. with 70% allocated to Iberia, 14% to Brazil, and 9% to other countries, mainly Australia, where investment more than doubled year on year, offsetting the decrease in Germany and France as offshore projects are put in service. By businesses, net worth reached 9 billion euros, almost two-thirds of the total. with 30% growth in organic investment mainly in the UK and Spain, and the US and Brazil, where the increase in distribution has more than offset the completion of transmission projects. Our regulated thread bay increased by 3% to €51 billion, with transmission already representing today 25% of our total network assets. And this pattern will continue in the next years, reflecting the progress made in our regulatory framework and the construction of new projects. The United Kingdom again published its final determination for EOT3, with almost 14 billion autotechs for Scottish power transmission up to 2031. This will imply multiplying by four the investment made in the previous five years, securing long-term growth and fully transforming the profile of Scottish power. In the United States, avant-garde benefiting for higher rates and the rising contribution to the result of new transmission projects, they will accelerate in 2026 thanks to the commissioning of our interconnection line between Canada and Massachusetts, adding 125 million euros per annum to Grupo Evita. In Spain, the new remuneration methodology for the period 2026-2031 has already been published. While in Brazil, the regulator has approved the renewal of our distribution concession for 30 years, up to 2060, and UNDG has completed its transmission project with a total contribution of 350 million euros to EBITDA per year. Finally, Iberdrola Australia was awarded as a transmission line the state of Victoria with an investment of 1.2 billion euros up to 2030. They will increase significantly our footprint and result in the country and we continue developing a pipeline of additional transmission projects in other different states. In power and customer, we invested $5,260 million, well spread across the UK, in the US, Siberia, and other countries. By technologies, we invested $1.7 billion in onshore wind, $1.4 billion in offshore wind, $1 billion in solar, and $1 billion in storage and retail. We have already put in service 2710 MW of onshore and offshore wind, solar, PV and storage. We have 4679 MW under construction, as well as a pipeline of more than 9000 MW ready for 2028. More than enough, of course, to secure all the new capacity expected in our plant. Regarding route to the market, we have also sold all our production for 2026 with an attractive mix of regulated contracts with an average duration of 14 years. Retail customers and long-term PPAs, which already represent two-thirds of our total energy sales, and will continue increasing thanks to the ongoing signature of new contracts. As a result, we have been recently recognized as the leading seller of PPAs in Europe and one of the three largest worldwide. Operating gas flow goes up by 8.2% to 12,811 million euros, reflecting the strong performance of networks and the stable contribution from powers. This rise in cash generation up to 1 billion in just one year, together with asset rotation and partnership and the capital increase of last summer has allowed us to reduce our adjusted net debt by 1.5 billion to 50.2 billion euros even after the consolidation of electricity in the West and acquisition of minorities in the US and Brazil. improving even more our ratios with FFO to adjusted net debt reaching 25.5% and adjusted net debt to EBITDA down to three times. Following this from operation and financial performance, yesterday the board decided to propose to the general shareholders' meeting a total dividend of 0.68 euros per share, adding 0.427 euros to 0.253 euros already paid three weeks ago as interim dividend. These figures represent a year-on-year growth of 6.3% in dividend per share and 3% in total dividend payments. up to 4.5 billion euros, taking into account the impact of a capital increase. I will now hand it over to our CFO, who will present the group financial results in further detail. Thank you.

Thank you Chairman, and good morning to everybody. 25 adjusted net profit. reached 6,231 million euros representing a 10.3% increase compared to the 5,651 million euros in 24 adjusted net profit. Reported net profit was 12% up to 6,285 million euros. 2025 net profit would have reached 6.7 billion euros if capital gains had not been more than applied to adjustments in our power division, and as the chairman has said, mainly in renewables. As the main perimeter change, I have to say, ENW has been fully consolidated since March. Another thing to note for you is that the Mexico P&L and debt is included here for illustrative purposes because in our reported accounts is classified as an asset held for sale due to the expected closing of the transaction very soon. FX evolution has had a minor effect on results thanks to our FX hedging policy. With the dollar 4%, the pound 1.1% and the real 7.6%, all of them depreciated against the euro. Our 6,231 million adjusted net profit is beating our adjusted guidance and is close to the 6,285 million euros reported net profit. In this slide, you can see the details of the adjustments from 25 reported net profit to adjusted net profit. The 379 million exclusion of UK man-meters capital gain in Q3 is more than compensated with the 464 million in adjustments in our power division, which are write-offs in our renewable pipeline. And the network cost recognition, one-off in the US, a non-CAS item, which is taken out from our adjusted net profit, is also partially compensated with inclusion of the CAP allowance in the UK as it is a cash income. Adjusted revenues rose 0.6%, driven by the network business, while procurements fell 0.7%, driving up adjusted gross margin by 1.8% to 24.3 billion euros, and here we are excluding the cost recognition in the US networks. Excluding capital gains from asset rotation accounted at the operating income, and one of efficiencies 25 net operating expenses improved 4.1%, affected by lower storm costs that also diminished gross margin. Adjusted net personal expenses rose 1.9% due to a higher number of employees, as the Chairman has commented. Adjusted external services declined by 5.2%, mainly due to the 350 million euros lower storm costs, and adjusted other operating income increased by 10% compared to 24% due to the indemnities of past year costs partially offset by the 121 million euros negative impact of the East of Anglia sale that it is compensated at the financial results. Excluding mentioned stock-related impacts and other adjustments, net operating expenses on a recurring terms grew 1%. Analyzing the results of the different businesses and starting by networks, its adjusted EBITDA grew 21% to 7,794 million euros, mainly driven by the strong performance of the UK and the US and a significant last quarter improvement in Spain. Transmission EBITDA is up 28% to 1.1 billion euros and distribution EBITDA 19% to 6.7 billion euros. In the U.S., the EBITDA reached $2,491 million, 73% more, with higher rates in distribution and better contribution from transmission, and positive impact since Q1 by the decision from the New York regulator that allows to register a regulatory asset under IFRS regarding past costs of $551 million. Taking out this effect, EBITDA is still up a remarkable 35% on an adjusted basis to $1,940 million. In the UK, EBITDA increased 28.7% to £1,595 million, including 10 months positive E&W contribution and a growing contribution from transmission. In Brazil, EBITDA was up 13.8% to 3.13%, 1,837 million reais thanks to higher revenues in distribution due to demand, inflation and increase in rate reviews over a higher asset base. Transmission contributed positively with 1.6 billion Brazilian EBITDA, 56% up or 583 million reais more than in 24 as all the lines have been completed. In Spain EBITDA grew by 31% to 2015 million. The result was positively impacted by the recognition in Q4 of incentives related to 24 and 25. The remuneration increased for the 24-25 period 6.58% and from the positive effects in Q4-24 of a negative one-off inefficiency cost. 25% Power EBITDA reached 7.9 billion euros versus 8.8 billion in 2024, both excluding capital gains from asset rotation, which are 1.3 billion lower in 2025 as higher production due to 2,700 megawatts additional installed capacity did not compensate lower volumes and prices. Emission-free generation reached 85%. In Iberia, the bid down was 3,121 million euros, a 16.8% down, with higher production more than offset by lower margin and sales, explaining part of the year-on-year valuation, and higher ancillary services costs, lower code rulings, and higher levies, despite the termination of the 1.2% revenue tax, explaining the remaining decrease. Hydro reserves have reached an all-time record of more than 9 TWh as of today. In the U.S., EBITDA grew 0.9%, reaching $1,069 million, supported by higher prices and new solar capacity. This growth came despite the fact that 24 was positively impacted by the Arctic blast storm one-off and by the sale of Kitty Hawk in the fourth quarter of last year. In the UK EBITDA grew 0.4% to £1,536 million, considering the £324 million capital gain from the UK smart meters divestment CQ3. But adjusted EBITDA, taking out this capital gain, was down 20.8% to £1,212 million, with lower prices and lower volumes in renewables, and lower EBITDA from the supply business, driven by lower volumes. Net operating expenses included £108 million negative one-off impact linked to the East of Anglia III sale, which is more than compensated at the net financial results. In the rest of the world, EBITDA grew 10.4% to 796 million euros, due to the higher contribution from offshore wind farms, some in France and Baltic Eagle in Germany, but with lower contribution from supply business in Portugal, due to a 30 million negative impact of the ancillary services costs as a consequence of the blackout. In Brazil, EBITDA fell 2.7% to 1,283 million reais as a consequence of lower production and lower margins, but with a positive impact of 297 million reais linked to the negative adjustment recorded in Q4-24 following the classification of Baixo Iguazu as held for sale. Finally, in Mexico, EBITDA reached US$632 million, decreasing 71% with lower reported contribution due to the asset sold on February 26 last year and the higher contribution from the retained business tanks, sorry, the sold in February 25 last year and with higher contribution last year. from the retained business tax to higher availability and demand. As mentioned at the beginning, the performance of the EBITDA from Mexico is for illustrative purposes, as on the official account is classified as head for sale, so the results are on the discontinued operation paragraphs before the net profit line. depreciation and amortization and provisions, with €524 million of adjustments in 2025 and €1,500 million in 2024, mainly in the power business, increased by 3% to €5,793 million, driven by a higher asset base despite lower bad debt provisions. Adjusted EBIT reached €9.9 billion and grew 3.1% in line with adjusted EBIT. Net financial costs increased by €288 million due to minus €1,863 million, mainly driven by €263 million higher debt-related costs due to €6.2 billion higher average net debt with an impact of €357 million, while interest-related costs and FX improved by €94 million due to FX depreciation, especially of the real and the dollar. Derivatives had a positive contribution of €164 million, mainly due to the East of England III derivative contribution, while the rest had a negative impact, mainly due to the Mexico hedges compensated at the net profit level in the tax line, lower capitalized interest and other items. Cost of debt improved 6 basis points to 4.75%, mainly thanks to lower short-term interest rates, especially in the euro, despite higher interest rates in Brazil. Excluding the real, cost of debt improved 15 basis points to 3.55%. 25 net debt, as the chairman has said, is $1.5 billion lower than the $51.7 billion reported in the 24-year end, reaching $50.2 billion. This positive evolution was given by the 12.8 billion FFO generation, plus the 4.6 billion as a result of asset rotation and East of Hungary III debt deconsolidation, and the 5 billion capital increase, more than covering the 12.6 billion CAPEX, plus the 1.9 billion of Neonegia Previ acquisition, and the 4.6 billion dividend, as well as a 2.2 billion ENW net debt consolidation. As a consequence, our credit ratios are strong for our BBBAA1 rating. Our adjusted net debt to EBITDA was 3.02 times, the FFO adjusted net debt reached 25.5%, and our adjusted leverage ratio was 43.8%, 1.6 percentage points lower than at the end of 2024. Regarding our financing strategy, we delivered a year of unprecedented execution, awarded by the IFR magazine as the best this year in the world in 25. In addition to the capital increase, Eberdrola signed 16.7 billion euros of new financing under highly competitive conditions in different markets. We placed 4.9 billion euros in bonds, achieving several milestones. Our first green senior under the EU green bond standards and IGMA standards. A non-dilutive green convertible with a high savings versus a senior structure ever in Iberdola. Our lowest coupon among all hybrids issued in the euro market in 2025 and the tightest spreads in New Energy and NYSEC. In structure finance, we secured €4.5 billion driven by the East of Anglia III project financed by 23 banks and the Danish Export Trade Agency. We also reinforced our liquidity position with €3.8 billion in credit lines including €2.5 billion sustainable syndicated facility for the holding and avant-garde, which has now become a benchmark in terms of pricing. In multilateral and development financing we added 2.5 billion euros including green funding from the EIB supporting next generation investment and the first green loan granted by the National Wealth Fund to a European company to finance projects in the UK. 25 adjusted net profit grew 10% to 6,231 million euros, while reported net profit rose 12% to 6,285 million. Let me stress again that the net profit would have exceeded 6.7 billion euros if 25 capital gains had not been more than applied to adjustments in our power division. Now the Chairman will conclude the presentation. Thank you very much.

Thank you, Pepe. To conclude, 2025 was again a year with strong operational and financial performance. But above all, last year confirmed the transformational impact of our strategic plan based in network infrastructures as key driver. In 2025, our RAB increased by 2%, with attractive return and visibility, thanks to our presence in countries like United States and UK. And we expect to continue growing in the coming years, both in distribution, due to integration of electricity in the West and the UK, and increasing investment needs in all geographies. And in transmission, mainly in UK and US and Australia. In power and customers, our selective approach, focusing our core markets and our balanced mix of technologies, allow us to install 2.7 new heroes in 2025, We're going with 4.7 gigawatts more under construction and 9 gigawatts of projects ready for 2028. In addition, 100% of our energy is already sold for 2026, mainly through long-term PPAs and regulated contracts, and we have continued expanding our unique portfolio of storage, which includes hydropump facilities in operation, capable of delivering up to 10,200 gigawatts per annum. and a pipeline of battery and hydropower storage projects up to 7,500 kWh per annum more. In 2025, we have also confirmed our commitment to financial strength with a reduction of €1.5 billion in debt to €50.2 billion, following an 8% increase in cash flow generation up to €12.8 billion, The execution of our asset rotation and partnership plan and the capital increase of last year. Driven by the expected continuation of these positive trends in 2026 and the impact of new investment, today we are setting an adjusted profit guidance of more than 6.6 billion euros in 2026. We will mean adding 1 billion euros to our net profit in just two years, and we will put Averdrolla in the best position to exceed our guidance of 7.6 billion euros for 2028. But the growth potential of our business model goes far beyond 2028, given the unpleasant investment opportunities created by electrification. In the last years, electricity consumption has been growing faster than infrastructure accumulated in huge Latin demand than today is waiting to be connected. Most countries are responding to this situation by increasing network investment and accelerating planning processes. But consumption is expected to continue increasing strongly in the coming years in heating and cooling, as more heat pumps are installed, transport, as the penetration of electric vehicles continues to accelerate, and industry, especially in low-temperature processes, creating the need for more external power and storage facilities. Generation technologies will be chosen in by its country according to three main criteria, self-sufficiency, competitiveness and sustainability. Of course, this new production will also require substantial upgrade in transmission and distribution networks. On top of this, data and artificial intelligence have emerged as a new demand vector with a very large potential, mainly from technology companies, which are already the largest customers in our key markets, the US, UK, and continent Europe. This already requires significant upgrades of generation, and very especially transmission and distribution assets. And this virtual circle of additional power demand and infrastructure is just starting. Today, electricity is only 20% of the global energy demand, and this percentage is expected to grow strongly, boosted by new technological solutions and the need for strategic autonomy and competitiveness. In Europe, for example, the Commission expects that the share of electricity in total energy consumption will double in the next 10 years and triple by 2050, reaching 60%. And we are in the best position to reaffirm our current global leadership in electricity infrastructure, which has become a new high-growth sector thanks to electrification as we anticipated 25 years ago. Since then, we have been implementing a consistent strategy based in expansion of networks, selective investment in power, and access to customers through all road to market, including the most sophisticated instruments like multi-country PPAs. The 170 billion already invested in the last 25 years have allowed us to multiply our asset base by eight times and expand our geographical footprint to several countries, mainly in the US and the UK, to become the largest integrated utility in Europe and one of the two largest worldwide by market capitalization. Always preserving our commitment to cheap plus rating, thanks to our financial discipline and our ongoing access to market and liquidity. Our size, diversification, and solidity are the best guarantees to secure access to supply chains, technology, and the best talent and skills. And to maintain our track record of shareholder return, more than 1,800% over the last 25 years, and to sustain growth in result. Thank you very much for your attention. We can now begin the Q&A session. Thank you.

Thank you, Mr. Galán. The following financial professionals have raised the following questions. First, Rob Puleim, Morgan Stanley, Gonzalo Sánchez Bordona, UBS, Ahmed Farfan, Jeffries, Arturo Murua, Jeffries, Pedro Alves, CaixaBank, Pablo Cuadrado, JV Capital Markets, Fernando García, RBC, James Brand, Deutsche Bank, Jorge Alonso, Bernstein Societe Generale, Filippo Patian, Odo BHF, Dominic Nash, Barclays, Meike Becker, HSBC, Peter Vistiga, Bank of America, Pierre-Ramon Denck, Alfa Value, and finally, Sky London, Rothschild. The first question is, can you expand on the main elements driving the increase in net profit?

In net profit, 2016 will be another year of growth. I think there are several reasons for that. Sorry, it was off. I said 26 will be another year of clearly growth. The first one is due to the consolidation of electricity in the West and energy. As you know, we are already in energy. We expect in the next few weeks we will have the control, the 100% of the company. The positive acquisition, this minority is what I mentioned. New distribution frameworks, which we are now, like the case of UK, which is the T3, Rio T3 from April. New interconnections between Canada and Massachusetts, which I mentioned it was 125 million BIDDA contribution per annum. The Brazil, the finalization and transmission project, which can act, as I mentioned before, 250 million additional EBITDA. As well, the contribution of the 2.7 megawatts, 2,700 megawatt installed power in 2025. And the partial contribution of this 4.7 gigawatts, which is now under construction and will be completed during the year. The other one important point, I think we are beating this year the record of hydro reserve in the history of the group. So I can say in this moment all our dams are 100% almost full. So I think we are on the 95, which is the reserve margin we have to keep already just for security reasons. So that is already providing more than 9,000 gigawatts of stored energy which will be used in due time. And that can be completed with our capacity of pumping storage, which I mentioned is another potential almost 10,000 gigawatt hours per annum that we can as well potentially produce with it. Financial expenses, as it was mentioned by Pepe Sainz, is fully under control, is a lower debt, and our interest rates are mainly fixed or are hedged. So that's why I think we are confident to reach more than 6.6 billion euros net profit this year. That represents practically, I think when we presented last year our plan, it was a plan to increase by 2 billion in three years. So I think between 24 and 28. So I think with that one we can already secure that half of the term, this 1 billion is already being increased already. That why I think we are comfortable that another billion from 27, 28 as well can be easily be achieved. Traditionally always as I mentioned before we are delivering our promises. So which I think you see when we made that one is we are normally comfortable that we can already achieve these numbers. And relating net debt, I don't know if, Pepe, you would like to say something. We are very, very happy with our cash flow generation, which continues increasing. But I think you mentioned, Pepe, in more detail.

Well, in the net debt, we are expecting to end 26, somewhere between 54 and 55 billion euros, which is below what we have expected. in our plan, and this is basically because we have, as you know, finished this year with lower debt than what we had expected, so lower 1.5 billion euros at 50.2. This means that we are going to increase a little bit the debt amount as we continue to invest, but below what we had in our plan and that we had in our capital markets day. As the chairman has said, the debt under control and the financial expenses also.

Next question is related to the non-recurring impacts that are affecting the 2025 EBDA and net profit.

as you know well this year we had a capital gain mainly by the due to the sale of the smart meters in the UK this is something that we have adjusted we have taken away another 460 million to more than compensate this 379, this 464 is below the EBITDA, so we are stripping 379 million of the EBITDA this year versus 1,700 million last year mainly due to the Mexican capital gain. This is what makes the fact that in reported terms The EBITDA is below last year, but not in recurrent terms. So these are the two main impacts at the EBITDA level. And at the net profit, so below the EBITDA level, mainly in the EBIT, in the depreciation, amortization and in the provision side. This year we have provisioned $460 million mainly to some adjustments in the value of our pipeline, mainly in renewables across different geographies compared to last year. which the adjustment was basically in the onshore in the US, as you recall. This year it's been basically across different geographies. And last year also in the provision line, we adjusted around 1,500 million in the provision line in 2024. to compensate this capital gains that we had in the EBITDA level. So we stripped this provision from the EBIT side. To conclude, last year we stripped 379 million at the EBITDA level, 241,700 million at the EBITDA level, and this year we have taken away around 416 million at the EBIT level, and we have also taken away last year, also through efficiencies and adjustments, another 1,500 million. And in addition to that, we have two other elements, which is basically the fact that this year we have included the gap allowance, which compensates, you know, what we are taking away, which is the New York recognition of the past costs. So that is basically the main adjustments in our numbers.

Next question is related to the recent regulatory development in both in Spain and the UK, and how this compares with the assumption included in our strategic plan.

So, I think, as I have mentioned, in the case of Spain, we have to manage our business according to the signal that has been given. The signal is that they are already just reducing They are the money in operation and maintenance, so we have to adapt our operation and maintenance to the new circumstances. They are already just limited the capex. They are giving some guidelines where to invest and how much to invest, so we have to adapt to the circumstances. But I think I would like to say that in the case of Spain, it's less than 20% of our RAP. So I think we will adapt to the circumstances in such a way that we will not be affecting our P&L, adapting our expenses, adapting our capex to the framework that has been defined. But I think our network business is depending much more on other countries. I think in the case of UK, as I mentioned, only the growth that we are expecting in transmission is absolutely huge. Only in transmission, the regulator has already recognized the need of accelerating our transmission lines, multiplying by four times the capex toward the previous five years, with a clear, stable, predictable, and attractive framework. So I think Rio T3 is clearly a transformational thing for Scottish Power. So the RAP of transmission in 2030 will be equal, even highly higher than the RAP of distribution. So together, we are going to reach more than 30 billion RAP, compared with 9 billion we have in Spain. So I think just to give you the image where that represents. And as well, the return on equity, the return on equity including incentive, higher than 9%. Similar situation we are facing in other countries, like the United States, which as well there is pressure for increasing the investment, and the situation in Brazil, with Ayuso, is already just renewing the license for the next 30 years, with the commitment of investing a huge amount of money in the country, for electrifying the sectors which still in the country are not electrified. So I think those are the main things. So I think our business transmission and distribution business is a growing business. a vector which is transmission, either in UK or United States, which I think in the case of Britain is going to transform completely the size of the company, from a company 15 billion rub to 30 billion rub, and in the case of United States, similar thing as well as Brazil. In Spain, so the situation, we have to follow the signals of regulators, but in any case, The size of our business in Spain is less than 20% of our total, so which I think is not important what it represented for that one. But we will adapt completely our deliveries, good has been already been given. The signals given is clear, less investment in operation and maintenance, CAPEX already addressed to certain areas and not to other areas. I think we have to follow this instruction. That's it.

Next question is regarding the regulatory framework on negotiation in New York, both and Maine, and how this aligns with the assumption included in our strategic plan.

Pedro, would you reply?

Okay, I think we're always suggesting, Chairman, you know, on these rate cases to the circumstances. Last year, we focused on recovering storm costs in New York, $800 million, and more than $300 million of storm costs as well in Maine. That was the focus. I think this year, because of circumstances, we believe it's the right thing to do, internal rates and one-year rate case in Maine. The intern rates will be applied in July, and then we will request, you know, for a one-year rate case. After that, we'll go into a multi-year rate case. And in the case of New York, we still have the current, you know, rate plan, which will finish, you know, in the middle of the year, and we're already working in a one-year rate case. And after that, you know, we will file also a multi-year rate case.

Next is, could you provide an update on the status of Win Year Win One project and its recent progress? Yes.

So, I think I would like to summarize in two words. For me, as an engineer, the farm is already completed. In this moment, we have more than 60 turbines of the 62 which are fully installed. I think there are more than 55, I think, in operation, in supporting electricity. So, I think these numbers mean the level of availability is similar for other offshore wind farms we have in operation. So, for me, that is... is completed. Nevertheless, Pedro, you would like to add any detail, but for me, the sentence, that is fully completed.

That's it. I think you're totally right, Chairman. I think we have 60 of 62 rotors installed. That's 97%. Probably in the next days, we will install the two remaining ones. And I think from an operation point of view, 52 of the 62, that's almost 85% of them, are right now allowed for operation.

Next is, how is your customer base evolving in Spain, particularly in terms of channel level, customer retention, and portfolio quality?

Pedro?

I think it's important to know that we are the market leader. We are the leader in energy supply. We are the leader in number of customers and also the leader in churn rate. So it's normal that we have some rotation in those customers. I think we continue to be successfully measuring, taking actions to retain our best customers. And right now, we feel even that margin per customer is right now growing from an energy point of view.

So I would like to insist in our work. I think we are daily a number of customers. But the level of loyalty of our customers is huge. We have the record that we are the best in chain rates in the country as well. So I think it's normal. When you are already the largest number of customers, then you lose someone else. But important is the level of loyalty of the existing one. So the percentage of rotation, as a rotation in our case, is much lower than the rest, especially those newcomers. The newcomers is the rate case, the churn rates are absolutely huge, which I think as well is normal in other countries. When you go as a country, initially I think the number of, you win customers, but you lose customers. But the important thing is the loyalty of a customer is huge. I think that I would like to mention this message. Thank you.

Next, could you provide an update on your view regarding the role of nuclear generation in Spain and the status of the Almaraf extension process?

So, I don't know how many times I've repeated as engineer what is my vision. So, the nuclear power plants are necessary, are safe, are efficient, and contribute to lower prices in all countries. So I think that is a reality. In the case of Spain, we suffer a huge taxation, which I think reaches almost 30 or 35 euros per megawatt hour, which is three times, four times more than other neighbor countries. But the power plant itself, I insist, are necessary, safe, and efficient, and they are already generating lower prices. I think that is like that, but today some of the nuclear power plants are being called to operate under restriction because they are cheaper than gas plants. So I think that is the reality we are facing today. In fact, today European countries with no nuclear have structurally higher prices, Italy and Germany, around 20 more euros than France or Spain. So I think that is the big debate in Europe. So those countries that we have already keeping our nuclear power plant, and we have already invested in other renewable technologies, we have lower prices than those we have not already, either not built, or either has already closed their nuclear power plant, and they are fully dependent on the import of fossil fuels, which I think that makes that the cost is automatically higher. So that's why, for this reason, we have already asked the extension of Almaraz, and we will ask the extension of others in the future, I imagine. And I think this process is ongoing. So I think the Nuclear Security Council is analyzing, but I think we have already delivered all the papers requested, and I think the fact is this power plant, most power plants similar to that one, are already extension life up to 60, even 80 years, which I think will have not much sense, and here we will not already use this asset, which I insist are necessary, safe, efficient, and contribute to lower prices.

Next is related to the status of the Neonerdia Minorities Acquisition Deal.

Well, I think that the processes are going on. I think it's a question of weeks. So I think we have not any, all they are progressing well, by step by step. And I think, I feel that in April will be closed later. So I think it's going according to schedule.

Next is how will the U.S. network investment affect customer affordability? And are European regulators becoming more focused on this issue as well, especially Italy, with the new measure adopted?

So, as I mentioned in my presentation, today we have a significant Latin demand unattended. due to lack of infrastructure. So I think that is a fact in all countries. The fact European Commission has already made just a directive recommending higher investment in networks, in infrastructures. So, and I think this lack of infrastructures of transmission and distribution is causing losses in containment. And that is generating extra cost to many countries. So that's why higher investment in network will allow to solve those curtailments. I think in the case of UK, if I don't remember about the curtailments amount something like 5 billion pounds per annum. just because there are certain electricity in some parts of the country cannot be exported in other parts of the country and this part of the country have to use more expensive sources of energy to another one are already not being able to be exported. So this more investment solve this problem of curtailments that can incorporate an additional demand which now is latent, which cannot be supplied And they will dilute it. This extra demand will dilute the cost in the pact of this infrastructure cost. Resulting at the end lower cost per kilowatt hour. So that is a vertical surplus. If we are not making the infrastructure, we have to pay higher cost of electricity. that if we have this infrastructure, we can benefit, we can enjoy a lower cost of electricity, and we will consume more electricity, we will dilute it, the cost of this extra infrastructure. So the British regulator has understood very well, and that's why they are already introducing incentives for accelerating the construction of new infrastructures, precisely for diminishing these requirements that the British are paying at present. And in generation, I think my position in your charge is so clearly, each country has to look for how to use their own indigenous electricity, energy, to become more autonomous, to use more autonomy in their energy, to avoid problems that we've been experiencing in the past due to the import of certain energy from other countries. I think we've been suffering the problems of shortage of gas two years ago because the lack of supply from Russia. So now, but in any case, this cost of gas imported with liquefying always will be less competitive than those who have the gas door-to-door to the power plant. So that's why each country has to look what is the alternative. In the case of Europe, the European Commission is clearly defining what they would like. They would like more autonomous energy based in renewables, onshore, offshore solar, more nuclear, extension of the existing one, or potentially new one, which is the case of France. France just published their policy where they are relying on more nuclear and more offshore. And I think Britain is already saying the same thing as well. And that is the point. The point is, networks for supplying the demand, which today cannot be supplied, these networks can already diminish the cost per kilowatt hour, because they will dilute it. With more demand diluted the cost of the new infrastructures, and the power will be dependent on the countries, depending on the source in each country. If the country has one type of sources of energy, that energy will have to be used with the basis of competitiveness, sustainability, and self-sufficiency in the country.

Next is, could you update on your U.S. renewable pipeline? Is repowering still an opportunity in the U.S.? ?

It is, but you can already explain with more detail.

I think in the U.S. we have, you know, 11,000 megawatts in operation, and, you know, we're right now building around, in construction, 600 megawatts, out of which 455 are repowering. I think because of the customer demand, you know, to continue to increase, we are also, you know, looking into extension of life, you know, between 15 and 20 years with very moderate investments and, you know, attractive business cases. I think on top of this, we have more than 4,000 megawatts of pipeline. We don't have any new projects in the projections we give in the Capital Markets Day because we prefer to actually do things and that will be an upside every time we decide to do new projects.

Next is something related to the previous question, but could you provide your view of the recent regulatory intervention in the Italy power market, and do you foresee similar measures in Spain?

So, Italy, as I mentioned before, I was explaining clearly, they have higher prices than other European countries due to their past energy policy decisions. that they already make the increase the dependence of gas imports. I think that is clear. Same in Germany, is facing higher prices in Europe, due of decision, political decision taken in the past of that one. I think this case is very different for other countries that we have renewable and nuclear driving the structural lower cost. That is the case of France, that is the case of Spain. I think in line with the conclusion reached in the European Commission three years ago, related to the market design, we continue thinking the long-term contracting, mainly in PPAs, are the solution to avoid volatile and high power prices for European consumers. So I think the fact those countries were already more long-term contract of those countries are part of the mix of power generation of those countries that were the more stable and predictable prices. So I think Europe needs to become more and more energy independent. So we cannot rely in sources which are not already in our hands. So that why any market intervention will not help to attract the necessary investment to attend this growing electricity demand. So we have to be very careful with all these measures. We have to be very careful with the taxation, we have to be very careful with the fact that the European Commission is recommending a substantial reduction in taxes to electricity for increasing competitiveness, because that is the best way to increase the competitiveness of Europe. If we compare the taxes of Europe with the Americans or with the Chinese, in some cases it's five times more, the European toward the Americans or the Chinese. So, I think it's not a question of looking for more reforms, it's a question of looking what is the problem. The problem in Europe is taxation. And energy policies has not been, in some countries, making the right direction. If we are keeping already the nuclear power plant, and we increase our investment in already in autonomous energies, which in the case of Europe, certain is renewable, offshore solar, hydro. We make more storage, so certain we can be already as competitive as others. And that is what they are making countries like China, which are investing heavily already in autonomous energies, mainly renewable hydroelectric, in nuclear as well, for keeping already a much competitive mix of power generation.

Next is, could you update on your activity with data center clients, particularly regarding PPAs and expected demand growth?

So, I think PPAs with technology companies are not new for us. I think with... We have PPAs with the largest uses of data centers. We have already in this moment more than 150 gigawatt-hours of new PPAs signed. And only last year we signed one terawatt-hour more. And we have already 12 terawatt-hours per annum already the energy supply to these companies. I insist on that one many times. I think there are people who have been dreaming to become data center builders. We are already data center facilitators. So we try to facilitate the installation of data centers because data center is a large consumer of electricity and our business is to sell electricity. That's why we are doing our best for helping those who would like to install new data centers through providing land or providing connection or providing these PPAs, whatever. So I think data centers not only is a question of power, it's a question as well of connection. It's a question of networks. More networks are needed, as much power is needed. But I think if I have to say prioritize, networks is the first bottleneck in this moment more than power itself in some of the countries we represent actually.

Last question is related to the guidance given to the 2028, and is, please, can you elaborate why 2028 guidance has moved from around 7.6 billion to higher than 7.6 billion?

So, I think we have increased our net profit 1 billion euros in the last two years. And we expect to at least to increase another one more billion in the next two years. Investment and asset rotation is ahead of schedule. So I think the wrap is up by 3%. We have more than 7,000 megawatt new megawatt in construction or in operation in this moment. We have 9,000 megawatt in pipeline ready for 2028. We are seeing the acceleration of electrification. I was insisting and insisting again and again. We need investment opportunities in transmission and distribution. Clearly, that is a clear example in T3 in UK. We are for the incentive for acceleration. We have increased our return equity by 100 basic points if we go ahead of schedule. So I think it's incentive for being faster. On top of this, we have already better expectations for 2030 and beyond, with new opportunities in transmission in countries like Australia. So, I think, all in all, we are keeping our plan and delivering, focusing networks, being selective in renewables, and in power, as Pedro mentioned, in the United States. There are opportunities that we are making, but we can make more at that demand. There are other countries, but we have the possibilities in making more things. But we don't like to make dreams. As you remember, we put name by name power plant by power plant, which one we are going to build year per annum. So it's not saying we are going to make 9,000. No, we are going to make this 9,000 in this country, in this period, in this thing. So we have already, in the case of the United States, as Pedro mentioned, we have, for repowering, we are 11,000 megawatts already in operation, with more than half can be repowered. But we will, but we... In the moment, we have one by one, which bank we are going to repower, we will let you know. But I think we are working with that one, case by case. Because the time moves faster. Nevertheless, I think we have already our financial strength. You know, we are committed with it. We took all the necessary steps for keeping already our financial solidity. And I think it's... And that's why we feel we have a unique value proposition in the sector. So I mentioned in my speech something that we are from Bilbao. So I think it's, although the people from Bilbao, we have the reputation of being a little exaggerated sometimes. In our case, after 125 for history and 25 years of myself leading the group, we have already taken, I feel, the best of the country of us. The ambition to achieve better and higher results and the pride, also typical from Bilbao, of over-delivering. And that is our track record. Our track record is an ambitious plan and over-delivering the result. This is the result of the plan 22 to 25, which we just finished, and that is going to be again our plan for 2028. Compared with others, we have not proven this ambition, it has not proven this delivery.

Well, after this Bilbao answer, I will now hand the floor over to Mr. Galán again to close this event.

So thank you very much to all of you for participating in this conference call. And if there are any questions about investor relations, we will be available for any additional information you may require. Thank you, and thank you very much. See you soon. Thank you.