Uniper Se

Dear ladies and gentlemen, welcome to the Unipo Analyst and Investor Conference Call, First Half Result 2025. At our customer's request, this conference call will be recorded. As a reminder, all participants will be in listen-only mode. After the presentation, there will be an opportunity to ask questions by dialing star 1 on your telephone. We now hand you over to the Executive Vice President, Investor Relations, Sebastian Feitz. who will start the meeting today. Please go ahead.

Thank you, operator, and good morning, everyone. I am pleased to welcome you to our results call for the first half of fiscal year 2025. Next to me on today's call are Michael Lewis, our chief executive officer, and Jose Dengas, our chief financial officer. Michael will kick off by giving you an update on our key developments in the first six months of the year 2025, including And Jutta will walk you through our financial performance for the first half year and the outlook for the current year. And as usual, we will wrap up with Q&A session at the end. And now let me hand over to Michael Lewis, please.

Thank you, Sebastian, and good morning, everyone, and a very warm welcome from my side. I'm very pleased to share with you our highlights for the first half of the 2025 financial year, and then Jutta will dive into the details of those results. I'm proud to say we've managed to deliver a very solid performance in the first six months of the year, on the back of a weak macroeconomic environment and rising geopolitical tensions. Group-adjusted EBITDA stood at €379 million, and the group-adjusted net income came out at €135 million, both fully in line with our expectations. As anticipated, these figures are below the exceptionally strong results of the prior year period, which still benefited from the exceptionally high spreads, which we locked in successfully in the past. Notably, the strong financial performance in the second quarter of 2025, with an adjusted EBITDA of €518 million, more than offsets the weaker first quarter, bringing Uniper back into positive territory. Both flexible generation and green generation contributed significantly, even in the face of lower spreads and lower prices, particularly in the Nordics. And overall, we achieved a result for the first half of the year, 2025, fully in line with our expectations. And also, our financial position remains strong and resilient. This is reflected in the recent positive rating actions taken by the credit rating agencies S&P and Scope. Both agencies recognise our improved financial risk profile with upgrades of our standalone credit profile by one notch. And Jutta will give more details in her section. Reflecting both rating updates, we remain committed to continuing our prudent financial policy and we will move forward with our transformation towards a more resilient Uniper. Furthermore, we're making strides in fulfilling our divestment requirements stemming from the EU state aid obligations agreed between the German government and the EU Commission. One month ago, we announced the divestment of our 18.26% equity stake in Latvia's Gaza, And on Monday, August 4th, we published a press release that STEAG Group will acquire our district heating business, Uniper Wehrmacht GmbH. The process of divesting our coal-fired plants at Dassault 4 is also ongoing. Thus, the vast majority of our required divestments have been achieved, or sales processes are ongoing. And while we're making good progress in the implementation of our strategy, we've taken stock in this year's strategy process of external developments. and we've adapted our strategy when necessary. Specifically, not all markets are developing as quickly as previously expected, some key regulatory decisions are delayed, and we also witnessed shifts in the operating environment, for instance, in the area of hydrogen. And in this environment, we also increased our focus on cost management. Accordingly, we're adapting our personnel planning when necessary to ensure we remain flexible and agile. And that means we aim to reduce our previous personnel plans by a total of 400 positions, taking full effect in 2026. In addition, we remain focused on enhancing the efficiency of our operational processes and optimising them through advanced IT solutions. We're expanding the use of artificial intelligence, which is already accessible to all our employees in their day-to-day work. This is based on our conviction that artificial intelligence will be a key component to shape the energy world of the future. With a recently struck strategic partnership with Microsoft, we've opened a new chapter for our course to become a leader in applying artificial intelligence in the energy industry. An AI lab is under development at our Düsseldorf site, focusing on innovation in this area. Whilst the Microsoft co-pilot assistant has also been deployed group-wide utilizing both internal and external data and adoption is ongoing amongst all employees. Furthermore, Uniper applies AI especially in areas such as power plant control and energy trading optimization through decision support systems. A key focus is the further development of the company-wide AI and data strategy. Let me shed more light on our recent strategic moves in detail. Two years after launching our strategy, we remain committed to invest around €8 billion into Uniper's transformation until the early 2030s. We've already made financial decisions totalling approximately €900 million. In our recent strategy review, we further specified our strategic plans for the next years, and by 2030, we aim to invest roughly €5 billion in our transformation. All our investment decisions are made according to strict investment criteria and we only invest when the conditions are right and contribute to our strategic transformation. Our objective is clear. Sustainable value creation with stable returns whilst transforming our portfolio towards net zero. And this means we will prioritise investments that deliver stable, regulated or contracted cash flows to increase earnings predictability and reduce our merchant exposure going forward. And this means, first, as shown in the pie chart, most of the growth capex over the next five years will be allocated to our flexible generation business, especially in the construction of new flexible power plants. And here lies the key focus of our strategy. We have the sites for new gas-fired power plants. Project teams are set up and preparations are ongoing for the future auction process. and the German government has flagged that it will initiate a swift and pragmatic tender process for new power plants. According to the German government, first tenders could be issued by later in 2025 if the legislative proposals are tabled in full. And similarly, we anticipate decisions about the support of the new-build gas-fired power plants in the UK in 2026. Second, we continue our path to becoming a greener energy company and expand our share in operating renewable energies thanks to our renewable project pipeline. Investments in renewable energies remain a central pillar of our transformation, focusing on sustainably profitable projects. And finally, we've defined our framework for rebuilding our gas and LNG portfolio, as we are committed to remain a key player in the gas midstream business, the partner for security of supply for our customers in Europe. Now let us turn to our 2030 target portfolio for the power generation business in the next slide. The majority of our earnings are generated by our power generation business and that's split between two segments, flexible generation and green generation. Most of our transformation investments in the coming years will be allocated to generation assets as explained in the previous slide and our corporate strategy to accelerate the energy transition is founded on the belief that we need both dispatchable power and renewables to provide security of supply and ultimately achieve a carbon neutral energy system. Based on our current portfolio and our strengths, we are convinced that we are ideally positioned to be a key part of this transformation. We have strategically important power assets in our portfolio that make a significant contribution to security of supply in Europe today. We already generate nearly 50% of our electricity from low carbon technologies. Since we announced our strategy in 2023, there have been developments in the energy market and changes in the regulatory framework to which we've responded proactively. Accordingly, we've adjusted our 2030 target generation portfolio. And based on our current asset base and our investments, we continue to target a total generation capacity of 15 to 20 gigawatts by 2030, with 50% of those assets being defined as green. These 50% include our hydro, nuclear, wind, and solar assets, reflecting our green generation segment, plus all capacities in the flexible generation business that have a net zero potential. For example, CCS capabilities or hydrogen-ready new gas power plants. And I want to emphasize once again at this point, we're steering our investments towards contracted or regulated cash flows to lock in predictable returns and reduce our exposure to market price volatility. And we've already reached several key milestones towards our goal. First, we're preparing for the upcoming auctions in Germany, then we're working at full speed on the low-carbon power project, Coniskey, in the UK. And we're also continuing to convert our fossil fuel power plants in the Nordics to bioenergy. We've also started with the Hauptberg hydro pump storage project in Bavaria, and the first solar projects are also under construction. The coal phase-out is being executed as planned, and the last required divestments are also currently being realized. Accordingly, we're confident that we will achieve our targets, and Uniper remains an integrated power and gas company. And this brings me to our next slide about the key elements of our gas strategy. The European gas market has substantially changed in recent years. With the phase out of Russian gas and the decline in indigenous European supply, Europe is more dependent on LNG imports to secure our energy supply. Portability and security of supply are the center of today's political debate, and Europe is defining its strategic course to safeguard its own security in the future. To procuring and providing gas, natural gas reliably to our customers, is key to ensuring the energy transition is successful. And with increasing LNG import volumes coming to Europe and more geopolitical uncertainties, the gas market has become more volatile. And although LNG capacities are growing, global competition of gas, especially with Asia, will remain. And these developments have significant impact on Uniper's business model. Following the halt of Russian gas supplies in 2022, we terminated our contracts with Gazprom Export last year, after a positive ruling in arbitration, which significantly reduced the risks in our gas business. The termination of the contracts with Gazprom Export requires us to reshape our gas midstream business. And overall, our ambition is to consolidate our position as one of the leading gas suppliers in Germany and in neighbouring regions. And Uniper is already a partner to a thousand industrial customers and municipalities, and a safe, predictable and price-competitive gas supply Supply is core to our promise to be a reliable partner for our customers. And we want to keep our strong downstream market position and supply 180 to 200 terawatt hours per year to customers in the DAF region, our core market for sales. And on top, we're expanding and building up an Asian LNG sales portfolio that provides us with opportunities to manage price and volume risks in the long run. And accordingly, we've redefined our gas sourcing strategy for 2030 And we're committed to remain a key gas midstream player in Europe. And we aim to secure a portfolio of 250 to 300 terawatt hours of gas and make the bulk of it directly available to our customers in Europe and Asia. Importantly, our principle remains unchanged, that supply follows sales. And we primarily secure gas volumes that meet our customers' demand. And a well-diversified gas portfolio both on the supply and demand side, is essential for effective risk management while retaining efficient optionality to achieve sustainable value creation. And we will build a diverse range of counterparties and geographies that increase our resilience against individual risks. And adding Asian downstream volumes as an outlet will provide a long-term hedge against price and volume risk. And we'll carefully assess every deal we make to remain within our risk limits on an individual and on a portfolio level. Thus, we'll rebuild our gas portfolio step by step, and we expect to achieve a mid-term and normalised sustainable earnings contribution from our gas midstream business and our LNG business in the range of roughly 250 to 300 million euros. And in recent months, we've already made significant progress in signing new long-term contracts. For example, just last week, we signed a long-term gas supply agreement with Tourmaline from Canada for a physical delivery of around 6.6 billion cubic metres in total. In April, we announced that Uniper and the supplier Woodside had signed an LNG purchase and sale agreement for the supply of 1 million tonnes per annum from Louisiana LNG LLC and up to 1 million tonnes per annum from its global portfolio. And in September last year, we extended our long-term gas supply partnership in Northwest Europe with ConocoPhillips over the supply of up to 10 billion cubic meters of natural gas over the next 10 years. And in May, Unipo also signed a contract with Octopus Energy on power and natural gas supply, as Octopus is currently expanding its presence in the European markets of Germany, Italy, and Spain. One last note for greener commodities. Even though gas will certainly continue to play an important role for some time to come, we know that we must and will transform our green commodities business in the long term. So we remain committed to our goal of having 5% to 10% renewable and low-carbon fuels in our portfolio and our first electrolyser projects operational by 2030. So in summary, for the coming months, we have clear priorities. We continue to focus on the execution of our strategy and we're preparing a number of investment decisions in our renewables and flexible generation business until the end of the year. Our total capex spending is expected to reach around €1 billion in 2025 and we continue to rebuild our gas and LNG portfolio as just explained in detail. Significant progress has been made and we expect to conclude further supply contracts in due course. We concentrate on our internal processes to increase our efficiency and decrease our cost base while effectively managing our transformation. And as an immediate measure, this encompasses our aim to reduce our workforce compared to previous plans by a total of 400 FTEs. And this is one of the key elements in order to remain an agile organisation and to deliver our strategy. And with that, I'll hand over to Jutta who will guide you through our numbers for the first half and we'll give you more details on our digital strategy. Jutta.