Terna Rete Elettrica Adr

Good afternoon, ladies and gentlemen, and welcome to TERNA's consolidated results first half 2025 conference call. At this time, our participants are in listen-only mode. Please be advised that today's conference is being recorded. I'd like to hand the conference over to your host speaker today, Mr. Stefano Gamberini, head of Mr. Relations to begin. Please go ahead, sir.

Thanks a lot. Good afternoon, everyone, and welcome to TERNA's first half results presentation. The call will be hosted by our CEO and General Manager, Giuseppina Di Foggia, and our CFO, Francesco Beccali. Following the presentation, we will have the Q&A session, so we kindly ask you to send any questions you might have to our email, investor.relations at terna.it. Please, Giuseppe.

Thank you Stefano and good afternoon everyone. Before looking at the figures, I'd like to take a moment to highlight some of our most recent achievements. In March, we presented the new 10-year National Development Plan. This plan outlines the main grid development projects requiring investments of over 23 billion euros by 2034. Shortly after, we published the updated 2024-2028 industrial plan, which sets out investments totaling 17.7 billion euros. These investments are aimed at improving the efficiency, resilience, sustainability and security of our grid while also supporting the integration of renewable energy sources. In doing so, Terna continues to reinforce its role as a key enabler of the energy transition, helping the system move towards decarbonization and reducing reliance The 7% increase in capex compared to the previous plan is mainly driven by the security plan, which focuses on enhancing grid resilience and renewing assets. It also includes new projects that promote digitalization, the use of advanced technologies, and the adoption of artificial intelligence. Turning to grid development, in May, Terma Indicto, the Greek TSO, signed a memorandum of understanding as part of the Italy-Greece Intergovernmental Summit. This MOU lays the foundation for a new HBDC interconnection between the two countries. The new link will represent a strategic infrastructure for both Italy and Greece, supporting their decarbonization goals and strengthening their position as energy hubs in the Mediterranean. Project Execution Let me remind you that on May 8 we completed the laying of the first submarine cable of the Terranial Links Eastern Section, one of Italy's most important power infrastructure projects which will connect Campania and Sicily. From a regulatory perspective, in May Avera published a consultation paper 210-2025. The paper proposes adjustments to how certain aspects of the ROS base regulation are implemented, particularly regarding tariff recognition of CAPEX and DOPEX. It also introduces the first guidelines of the Ross Integrale Mechanism, including requirements for companies to present business plans and outline three new incentive schemes, two of which are expected to apply from 2026, while the third will be introduced at a later stage. Let me briefly touch on innovation and digitalization where we launched several initiatives in June. On June 19, PERNA signed a memorandum of understanding with Microsoft to develop strategic projects supporting our digital transformation. This partnership will allow us to leverage artificial intelligence, next-generation data platforms and hybrid digital infrastructures to advance our mission. Then, on June 23rd, we launched the Terno-Agiatic Innovation Zone in the Marche region. Our new innovation hub was created to help transform the Adriatic area into a center of technological excellence and to promote innovation in support of both the energy transition and local business development. In addition, PERNA has partnered with the Polytechnic Universities This program is part of the Polytech Lab, the new high-skilled polytechnic network. Launched in April, the collaboration is designed to promote research Innovation and Advanced Training, generating a positive social impact for the electricity sector and for the country as a whole. Finally, on the sustainability front, I would like to mention that during the period we published our first ever consolidated sustainability report, fully aligned with the new corporate sustainability reporting directive framework. From a financial standpoint, let me remind you that S&P upgraded the long-term rating of Terna to A- in April, following the upgrade of the Italian Republic from BBB to BBB+. In June, Moody's affirmed Ferna's long-term rating at BAA2, a notch above the rating of the Italian Republic. Furthermore, Moody's upgraded Ferna's outlook from stable to positive, reflecting the company's solid financial profile despite the increased CapEx plan. On the 10th of July, the European Investment Bank in Cesar San Paolo, Sace and Serna signed agreements totaling 1.5 billion euros to finance the construction of the Adriatic Link, the submarine power line that will connect the Marche and Abruzzo regions. The project is strategically important for Italy's power grid, promoting the integration of renewable energy sources and increasing Italy's energy autonomy and security. On the 15th of July, Terna successfully launched its first European Green Bond under the new 4 billion euro EMTN program listed on Borsa Italiana's electronic bond market and approved by CONSOB. The issuance has a nominal amount of 750 million euros and received a very favorable market response with demand outstripping supply by almost five times. Finally, as far as the remuneration of our shareholders is concerned, on June 23rd we paid the 2024 final dividend of 27.70 euro cents per share, bringing the total dividend for the year to 39.62 euro cents per share, including the interim dividend paid last November. After this brief introduction, let me give you an overview of the Italian electricity market. Turning to the next slide. As you can see from this chart, in the first six months of 2025, national demand was about 153 terawatt hours. essentially in line with the level recorded in the same period of last year when national demand was about 152 TWh. Over the period, renewable sources covered about 42% of national demand, slightly lower than last year, mainly due to a drop in hydroelectric production following an exceptionally strong performance in the previous year. It is worth highlighting that in May renewable sources covered 56% of the electricity demand, the highest ever value on a monthly basis. Moving to national net throttle production, this stood at 131 terawatt hours, up by 4% compared to the same period of 2024. In this first half, renewable sources accounted for about 49% of the national net total production, down from 53% of last year. However, let me highlight the considerable increase in solar production, which grew to around 22.1 terawatt hours, up 23% versus the first half of last year. Now let's move to the main figures of the period. In the first half of 2025, despite the complex and challenging macroeconomic environment, we delivered positive results across all the lines of the PML and the solid capital growth. Indeed, group revenues and EBITDA both grew by 8%, increasing by approximately 140 million and 103 million euros compared to the first half of 2024. We also reported a group net income of 588 million euros with an increase of 8% versus the same period of last year. Group capex reached 1,319 million euros, marking an increase of 27% versus the first half of last year, accepting a new record in Ternas history. This confirms once again our solid capex acceleration to serve the system needs. To support this CapEx acceleration at the end of June 2025, net debt stood at 12 billion euros, slightly higher compared to the value recorded at 2024 year-end of about 11.2 billion euros. Now, let me leave the floor to our CFO to have a closer look at the results. Please, Francesco.