Terna Rete Elettrica Adr

Good afternoon, ladies and gentlemen, and welcome to PERNA's full year 2025 consolidated results presentation. At this time, all participants are in listen-only mode. Please be advised that today's conference is being recorded. I would like to hand the conference over to you, our host speaker today, Mr. Stefano Gamberini, Head of Investor Relations. Please go ahead, sir.

Thank you. Good afternoon, everyone, and welcome to Terna's full year 2025 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 address, investors.relations at terna.it.

Thank you Stefano. Good afternoon everyone. Let me start by giving you an overview of the key highlights of 2025. This year confirms we are on track with the execution of our plan while accelerating investments and maintaining financial strength. In March 2025, we updated our 2024-2028 industrial plan. Total investment now stands at 17.7 billion euros, 7% higher compared with the previous version of our plan and with a consistent plus 17.7% versus the 2022 plan. Out of this amount, 16.6 billion euros are allocated to regulated investments. As of today, this is Terna's largest investment program. At the beginning of last year, we also presented our national development plan. It foresees more than 23 billion euros of investment between 2025 and 2034. Once projects in this plan are completed, the transmission capacity between southern and northern Italy will increase from 16 to 39 gigawatts. Our execution remains strong. In 2025, we obtain authorizations for 38 projects, representing around 1 billion euros of investments. Overall, about 92% of the 2024-2028 plan is now authorized. On procurement, 88% of the CapEx plan is already secured through contract. Financially, we remain solid. In 2025, our long-term ratings were upgraded by both Moody's and Standard & Poor's, reflecting similar actions taken regarding the Republic of Italy. We issued 1.5 billion euros of green bonds. Today, around 80% of our funding is raised through ESG-linked debt instruments. In January 2026, we issued an €850 million hybrid green bond. We achieved a record low subordination premium below 60 basis points for a corporate hybrid in Europe. Operationally, in 2025, we delivered solid performance ahead of guidance, with EBITDA growing by 7% and net income up 5%. Investments massively accelerated by 31%, reaching 3.5 billion euros. Let me briefly turn to the Italian electricity system. In 2025, the energy transition continued to move forward with around 7 gigawatts of new renewable capacity sold. We also launched the first auctions under the long-term scheme, Ferrix and Maxe. Moving now to the integration of renewables. Installed wind and solar capacity reached 57 gigawatts. At the end of 2025, with an increase of 7 gigawatts compared with the previous year, the pace remains aligned with the trajectory towards the 2030 National Energy and Climate Plan target. On top of this, more than 22 gigawatts of renewable capacity have already been contracted through the long-term support schemes designed by the Italian government. These projects are expected to enter into operation over the coming years. Looking ahead, once the updated FERIC framework is approved at the European level, The system will be on a credible and sustainable path to the 2030 targets. These will be supported by the Capacity Market , an innovative long-term storage procurement scheme managed by Terna on behalf of the institutions, and Terna's grid investments. At the beginning of 2026, transmission level connection requests stood at around 326 megawatts. The reduction from last year is actually a positive signal showing a more consolidated pipeline and stronger project quality. Indeed, projects that have already started This volume already exceeds the additional capacity required to meet the national 2030 targets. Overall renewable deployments continues upscale with a progressively more mature pipeline. This brings us to storage. Next slide. The growth of renewables requires a parallel scale-up of storage. If soon battery storage increased from around 13 GWh in 2024 to almost 18 GWh in 2025. In recent years, storage capacity has increased mainly thanks to the development of a utility-scale asset contracted through the capacity market scheme to guarantee system adequacy. In the coming years, storage capacity will continue to grow alongside the renewables supported by Maxe auctions. And this has already started. The first Maxe auction was held in September 2025. 10 gigawatt hours were awarded, with delivery expected by 2028. The auction was significantly oversubscribed Offers received were more than four times higher than the auction demand, with the average awarded price one-third of the reserve premium. Similarly to renewables, we have around 300 gigawatts of connection requests from storage plants and several gigawatts of projects, either with a clearance or ready to build. Already today, products with a clearance exceeded by far 2030 system needs. Summing up this slide, Maxe provides a highly innovative framework to support the development of storage technologies. Turning now to Italian electricity demand. In 2025, national electricity demand reached 311 TWh, broadly stable year on year. Renewables covered 41% of demand and 48% of domestic production. Photovoltaic generation exceeded 44 TWh annually. up more than 25% while hydroelectric production returned to more standard levels after the record seen in 2024. Net total production reached 268 terawatt hours, up 2% as a consequence of the reduction of net import flows. In the first two months of 2026, demand has increased by 3.1%, confirming the upward trend observed from last September. Looking forward, we expect that demand will increase driven by both electrification as well as the deployment of data centers. As of today, there are around 80 gigawatts of connection requests from data centers confirming that the Italian electricity grid is considered reliable by investors. These connections require very high quality power supply, redundancy in the grid, and efficient authorization processes. Perna has started aligning grids Planning with the disexpected expansion of a digital infrastructure. Moving on to infrastructure development. Execution remains a key focus. Between 2023 and 2025, we obtained authorizations for more than 6 billion euros of projects. Today, around 92% of the 2024-2028 CAPEX plan is authorized. On procurement, contracts signed over the same period amount to approximately 11.6 billion euros. 88% of our 2024-2028 CAPEX plan is already secured by contracts. This provides strong visibility on delivery. In the period 2023 to 2025, around 5.5 billion euros of projects entered into operation. Looking now at our main projects. On the Tirrenia Link, we completed the installation of the first marine cables worked on the western and eastern branches. For the Adriatic Link, construction sites for substations and underground cables were opened in 2025. Finally, Sakoi Tree, connecting Sardinia, Corsica and Tuscany, advanced with the full space of the Hova Red Line in Corsica. Concluding, authorization, procurement and construction are progressing in parallel, significantly stepping up our execution. Next slide, please. The changing generation mix is reducing system inertia and short-circuit power. As a result, the power system reacts and more sharply to disturbances making it increasingly challenging to ensure supply quality and security. What happened in the Iberian Peninsula in April 2025 clearly highlighted this risk. The Security Plan 2025-2028 provides, among other measures, a deployment plan for electrical equipment partially already in operation aimed at improving system stability and regulation. 27 synchronous condensers, out of which 17 already in service, 25 reactors with 16 already in service, 25 stabilizing resistors, the first one installed in 2025 to enhance dynamic stability. In a faster and more complex system, a robust security plan means anticipating risk and ensuring a resilient and reliable energy system. Moving on to digitalization. Next slide. In 2025, we invested more than 600 million euros in digital transformation. Firstly, process digitalization. We significantly broadened the scope of process digitalization. At the same time, we ensured full compliance with the regulatory framework requirements. Secondly, digital twin. By creating real-time virtual replicas of our physical assets and systems, we announced our operational effectiveness, covering over 60% of our operations. In the last few years, Terna has become a data-driven company. In 2025, we focused on integrating artificial intelligence into a wide range of fields. From procurement to finance, dispatching to maintenance, legal to HR, we have fostered a shared understanding to a dedicated awareness program for all employees. In addition, we have made significant progress on infrastructure resilience and cybersecurity. We have accelerated automation systems in our substations, ensuring that Full IT and Telecom Operability for Critical Assets. We have also strengthened business continuity announcing cybersecurity measures. Summing up, the commitment to digital transformation is a key pillar of Eterna's strategy to manage the system more efficiently, proactively, and at scale. This brings us to innovation. In our approach, innovation focuses on anticipating and emerging trends, developing high-impact solutions and technologies, and supporting their industrial adoption. In 2025, we developed 100 innovation projects. 17 of them have reached industrial validation and 65 are ongoing projects. In innovation culture, failure isn't a setback, but a source of learning. That's why even when a project doesn't move forward, it can generate insights that send in what comes next. Let me briefly highlight a few projects that have already reached industrial scale validation. Forming technologies to support system stability in a context of increasing renewable energy penetration. Operational improvement projects enhance safety and electrical infrastructure maintenance efficiency. Evernetworks is an innovative hub which simplifies data collection during site inspections and allows for real-time monitoring of grid work. Our corporate venture capital investment during the year totaled 8 million euros in innovative startups. We also obtained nine patents. All in all, innovation is a structured process aimed at delivering transformative impacts. Turning now to sustainability. PERNA is committed to reducing The CO2 emissions by 46% by 2030 compared to 29 levels. As of today, we have reduced scope 1 and 2 emissions by 31%. We are also committed to setting a net zero target by 2050 according to the science-based target initiative guidelines. We reduced the leakage rate of SF6, the insulating gas used in high-voltage equipment, by 27% compared with last year. At the same time, 92% of the group's waste was recovered. The Temna Foundation is fully operational, addressing electric education and energy poverty for a just transition. We also continue to receive remarkable external ESG recognition. Terna is among the top 1% of electrical utilities worldwide as recognized in Standard & Poor's Global Sustainability Yearbook. We have been recognized as best in class by Sustainalytics and as a top employer by the Top Employers Institute. As you can see, in 2025, Terna is conformed as a global leader in sustainability. Next slide, please. And our main results. In 2025, the group delivered strong results despite a demanding comparison with the 2024. Revenues reached 4.0 billion euros, up 10%. EBITDA increased by 7% to 2.75 billion euros. Net income reached 1.11 billion euros, up 5%. CAPEX amounted to 3.5 billion euros, up 31%. Net debt reached 13 billion euros, reflecting the higher investment level. We delivered solid performance while accelerating investments. Now I'll hand over the CFO for a deeper look at the 2025 figures. Please, Francesco.