BKW Aktie

Good morning, ladies and gentlemen. I would like to wish everybody a good morning to the audience here at the [ Video Hotel ] in Zurich and our esteemed participants in the live stream. On behalf of BKW AG, I would like to extend a cordial welcome to our analyst and media conference presenting the 2025 financial results.

My name is Marisa Fetzer. I'm Head of Group Topics for Corporate Communications of BKW. I would like to welcome on stage, Robert Itschner, CEO of BKW; and Martin Zwyssig, CFO of BKW. On the cover page of our 2025 annual report, you can see Farzaneh Abbaspourtorbati. She is Head of Long-term Asset Optimization for BKW. She's standing on the news Spitallamm dam 113 meters high, which impounds the Grimsel reservoir, high up in the Bernese Oberland. BKW holds 50% share in the hydropower facilities at the Grimsol by its stake in the Oberhasli power plants entity, KWO for short. Flexible generation facilities of this kind are key to the success of the energy transition against the backdrop of fluctuating solar and wind power generation. This is the reason why they are a key element of our BKW Solutions 2030 strategy.

Before I pass the floor to the BKW CEO, Robert Itschner, I would like to just quickly run you through today's program. Robert Itschner will take the floor in a minute to give you a quick glance at the result and will then go on to explain the most important developments of 2025 in our 3 business segments: Energy Solutions, Power Grid and Infrastructure and Buildings. He will then also explain the main thrusts for the current year.

After that, BKW's CFO, Martin Zwyssig, will discuss the details of the financial results for the 2025 fiscal year in detail. We will close the presentation with a short summary presented by Robert Itschner, and he will also present the EBIT guidance for 2026. As always, you will have the chance to ask questions during the question-and-answer session on the 2025 financial results. Questions from the live stream can be submitted during the presentation. They will then be answered during the Q&A, just like any questions from the audience here in the room. We will now proceed to the explanations on the 2025 financial results of BKW, and I'm happy to hand the floor to Robert Itschner.

Thank you very much. A warm welcome, ladies and gentlemen, to the analyst and media conference. On the full year results 2025, I'm very happy to inform you that we had a solid operating result. In 2025, total operating income of CHF 4.5 billion. This is also including the value adjustment of the Wilhelmshaven coal-fired power plant, EBIT of CHF 561 million and a net profit of CHF 388 million.

And I would like to go into a bit of a review of the year 2025. Now we have, of course, explained all our priorities in our strategy. We want to convert and expand the system. But there is also a sustained customer demand for specific Energy Solutions. And of course, we also need to expand and convert the grid infrastructure in Switzerland, but also abroad. There were a few headwinds. There was a little bit less wind, low wind levels than last year, and we had little precipitation. It is a dry year 2025, and therefore, hydro production, as we will see later on, is rather low. It is quite surprising to have such low wind levels, and this is all the more surprising because our wind farms are very well distributed over the entire Switzerland and Europe.

So this is quite remarkable. Now let us go into the individual business segments. First of all, Energy Solutions. We have very successfully started the implementation of our growth strategy. There were some challenges, of course, in the market. However, we have now new presences and offices in Zurich Düsseldorf, Paris and also Singapore. So there is a possibility of having 24-hour spreading possibilities.

We have strengthened our BKW portfolio. especially in wind and hydro, we've commissioned new power plants. Half of the Cerignola wind farm has been commissioned and a smaller hydropower plant in the Bernese Oberland, which is called Sousbach with 11-megawatt output.

Then we've already mentioned the expansion of our green electricity purchase agreements. We are very well on track there. Also when it comes to direct marketing, we have made a big step forward. We are now one of the biggest direct marketers in Germany, which is also supported by the acquisition of Sudvolt, for example. We are certainly doing great progress in this respect. The topic of virtual power plants is very important to us. We've been working on this very actively. So with Sudvolt, we've made a big step forward. This is about pooling of power plants so that they can be used optimally in the market.

This is just one example or a few highlights of 2025. We've already talked about Spitallamm before, which is great to see that we have been making progress there as well in terms of the project. Then a few success stories. Certainly, Zelestra, a very large wind farm in Italy. We've been working on this for 8 years now. It includes 29 turbines in Apulia in Italy with a total capacity of 125 megawatts. That's 800 landowners that we had to negotiate and find an agreement. It's a rather complex project.

We are on budget and on time with the construction of the entire farm. And parts of it have already been commissioned. Then Sudvolt, I've mentioned the name. This is an acquisition of a marketer of flexibility in Germany with a very good customer base, which is extremely important for us so that we can use rather flexibility solutions for our customers, and we've been building a bridge with regard to our customers, and we will expand this flexibility portfolio step by step.

Then another example for a large battery contract in Italy Zelestra in Italy, which we have been able to conclude. Then let's have a look at the pipeline in Energy Solutions. That's absolutely crucial for us. Parts of our investments have been invested in new production assets, for example, we just wanted to be very transparent here where we are at.

So we have a few in operation already that is now in 2026. And then we have the ambition of 2030 on the right-hand side. And then we can also see on the very right, the pipeline of the various businesses, whether they are in operation, under construction or in development or whether it is just an opportunity.

What you can see here, the pipelines are really gratifying to look at. Of course, they have to be expanded to some extent, but we are very happy with this set up, and we're looking optimistically into the future so that we can have more investing decisions in the future. For example, when it comes to hydro or battery energy storage systems. Hydro, of course, is something that will be coming to the market later on. We will construct, for example, the turbine hydropower plant, which is already under construction.

Once a year, we will update the situation with regard to the pipeline so that you can see how well we implement our strategy. When it comes to these projects, it always needs a little bit of time until it's reflected in our figures. But I do think that with regard to our pipeline, we can truly demonstrate that we are well on track.

Then when it comes to the investments in Power Grid, they've been a little bit higher in 2025, and we can live up to the expectations. Here, it's very interesting to see that we have progressed rapidly when it comes to the smart meter rollout. This has been improved strongly in 2025. So we will be able to conclude this project earlier than we thought. 400,000 smart meters is the goal, which will be completed in about 2.5 or 3 years from now.

A few success stories in the segment of Power Grid. First of all, the fact that we have a very high availability level in our distribution grid. That means that the grid is at a very good quality level. Then we've also had an average outage duration per end consumer, which amounts only to 16 minutes. This is really low in terms of European average, this is an absolute top figure.

So we are at a very high level. It doesn't have to remain at 16 minutes, but I think we've already reached a very high quality level here. I've already talked about the smart meter rollout. This is just a summary of what we've done. And then we've also had new constructions of transformers and substations. We have 16 that we've completed already now. Then the business segment of Infrastructure and Buildings, a few highlights here. Profitability has been increased in 2025 by 4%.

These are operating improvements. We are also increasing our portfolio here when it comes to efficiency, for example. And we also want to grow in certain parts of the market. We made a few smaller acquisitions, especially when it comes to project management, that is steering controlling project. That is a very gratifying business. We acquired a smaller company there with about 60 FTEs, and we have now a very solid position in the market there.

We have various rather big infrastructure projects that we've been realizing, especially when it comes to grid construction in Germany, as you could see on the picture before we started this conference, but also, for example, the bundling of rail activities in Switzerland has been progressive, and this is very successful.

The service share of service business in Building Technology is, to me personally extremely gratifying. It is a very stable growth figure there. And I think this should be highlighted, and we've certainly not reached the end of our ambitions there. We also have a few nice success stories that I would like to highlight.

For example, Chemofast anchoring in GmbH Willich, it's a huge logistic area that we are constructing. We did the whole planning for the building technology. Energy efficiency was, of course, of utmost importance, but also PV installations on the roof and various of our strengths and skills was included there.

A East Coast line, it's an extremely important core project for the energy transition, a large pipeline construction project in Germany with approximately 22 kilometers in line lengths. The total volume is EUR 147 million, 50% of which is with our subsidiary, LTB. Then we have been expanding our service business in building technology. We are focusing on certain tools here in order to reach our end consumers, this is a very interesting topic, especially in Switzerland with building solutions where we are -- have a very broad market share and market presence.

Let us have a look at the sustainability highlights of 2025 because this is a core element of our Solutions 2030. Now we have been able to reduce the greenhouse gas intensity by 24% compared to the 2022 base year, which is really gratifying. We are well on our way there. And to me, personally, it's also very important to see that we were able to decrease the number of accidents by 7%. That is the so-called lost time injury frequency. These are occupational accidents that lead to at least 1 day of inability to work.

So this was decreased by 7%. We've tried to demonstrate this slide a little bit differently. I don't know whether this will prove itself. We've tried to show you the opportunities on the left-hand side and the challenges on the right-hand side of this slide. I do not want to go here into every single detail, but we need to know that our services are certainly demanded in the market. However, there are challenges not only for this year, but also for the coming years. And going forward, there is a regulatory environment across Europe that is rather challenging and always moving with some uncertainties.

So we'll have to take a close look at this and see where the development proceeds to. We have opportunities, but also challenges in Switzerland, something that we've been observing smaller power plants that become part of BKW that is nice because we can cover the fixed costs there. However, it is, of course, at quite a lot of expenses to integrate such small power plants.

So we will see how this develops going forward. Then in terms of Infrastructure and Buildings, there is still a demand for expertise, especially in Germany, for example, for planning, implementation and complex infrastructures. We need to see how this proceeds, but we are very optimistic that the demand will remain at a high level and that we will play an important part in this.

So this is a rather balanced picture of how we make or see our outlook for the 2026 and for the years to come. Now what does this mean concretely for us? We're certainly pushing ahead with our growth ambitions. On the right-hand side, you can see the 750 megawatt of installed capacity when it comes to BESS and other power plants. We will have final investment decisions pending in the coming months. We've already commissioned 82.5 megawatts, for example, with Cerignola in Italy. So this portfolio is expanding. And the rollout is, of course, to be proceeded further when it comes to the smart meters.

And when it comes to Infrastructure and Buildings, we want to increase our profitability, of course, higher efficiency we also want to go into maybe very specific M&A opportunities. This gives us a high stability. Over the past 20 months, we've had great opportunities and projects. So with 20 months in engineering, 18 in Infra services and 10 months in Building Solutions, we are in a very gratifying position. So this was it from my part, and I'd like to hand over to Martin for the figures.

Thank you, Robert. I would also like to welcome you very warmly to today's analyst and media conference. It is a pleasure for me to talk you through the details of BKW's financial results 2025. Let me start by giving you an overview of our key figures. First of all, a short note on the value adjustment for our interest in the Wilhelmshaven power plant, which we communicated on 20th January. The adjustment was recognized as energy procurement cost, which is why it affects EBITDA. So that's usually if you have an impairment of an asset, it becomes recognized either in EBIT or EBITDA. And what we had to do is we have to increase our provision for onerous contracts.

The separate column shows the effect on the corresponding key figures. I will focus on the column highlighted in blue from here on. So the results excluding the value adjustment for Wilhelmshaven. BKW generated sales of CHF 4.5 billion in the 2025 fiscal year, as mentioned by Robert Itschner. This corresponds to a percentage change of minus 4.8% compared to the previous year. Excluding the value adjustment for Wilhelmshaven amounting to CHF 113.7 million, EBIT decreases by CHF 115.3 million or 14.6% to CHF 674.6 million year-on-year. This puts BKW slightly above the narrowed guidance range of CHF 650 million to CHF 670 million that we communicated on January 20.

Net profit declined with a decline of 26.1% net profit, it decreased more than EBIT to CHF 478.8 million. The reason for the strong decline in net profit compared to EBIT lies mainly in the decommissioning and disposal fund. Compared to the previous year, it performed less well, but still better than planned, and I will refer to this a little bit later.

The performance of STENFO for Mühleberg is reported in the financial results, which, therefore, decreased by CHF 82.4 million compared to the previous year. We had an anomaly, a positive financial result last year usually is not an expense. And the income taxes amounted to CHF 121.8 million, corresponding to a tax rate of 23.9%. That's slightly higher than the previous year where it was 21.1%. Operating net profit, that's the operating net profit adjusted for the performance of STENFO. It represents the operating performance of the group amounts to CHF 444 million, representing a decrease of 19.3% compared to the previous year.

Despite the lower earnings, at the EBITDA level, they were CHF 262 million. Operating cash flow comes to CHF 685.9 million. And I will come to the details on this when I comment on the cash flow statement. The return on capital employed is 7.5%, significantly exceeding BKW's WACC. Equity ratio, it was strengthened year-on-year by 2.7 percentage points to 51.5%, thanks to profit retention. And you can see this on the slide as well.

This slide shows you the performance of the business segments and their contribution to the results, both at the revenue and the EBIT level. First, on revenue on the left-hand side. In the Energy Solutions segment, the decline is CHF 170.9 million. A significant reason for the decrease lies in lower generation of hydro and wind power plants and the lower price level in the business with independent customers. At Power Grid, revenue drops by CHF 43.8 million due in the main to the EBIT neutral pass-through of the tariff reductions for ancillary services and the winter power reserve of Swissgrid.

Now for Infrastructure and Buildings, as the segment is focusing on more profitable projects, this leads to a slight reduction in organic revenue, while growth enabled by acquisitions can compensate for this, resulting in a small plus of the previous year of CHF 2.2 million. In the support functions, the decline in revenue is mainly due to the disposal of the 2/3 stake in the customer service and metering provider, CC Energy. Now EBIT on the right-hand side at Energy Solutions, the expected normalization of the energy market shows. Despite higher hedged prices, the EBIT is lower.

At Power Grid, higher costs for grid losses as well as higher depreciation due to a growing regulatory asset base have a negative impact on EBIT. We are very pleased with the performance of the Infrastructure and Buildings segment, where the result could be increased considerably. This is attributable to the successful and sustainable implementation of measures taken in previous years. In addition, substantial project impairments had to be made in the course of the year before.

The EBIT decline in support functions is primarily due to the lower equity income from Swissgrid as well as the elimination of shareholder activities, which is necessary for tax purposes at the level of BKW AG Holding. On this and the coming slides, I will go into more detail regarding our business segments, Energy Solutions, Power Grid and Infrastructure and Buildings.

First of all, Energy Solutions. And here, you can see the revenue. Revenue declined by 7.9% or CHF 170.9 million to CHF 1.995 billion. Higher hedge prices have had a positive influence on both revenue and EBIT. The lower generation from hydro and wind power plants leads to a reduction with corresponding impact on both revenue and EBIT. Thanks to a stronger focus at energy sales, quantity risks with large customers were deliberately reduced with an ensuing negative effect on revenue, but positively influencing EBIT.

Now EBIT comes to CHF 477.2 million in 2025 and is 18.6% or CHF 109.3 million below previous year's level. Higher hedge prices generated a positive impact on earnings to the tune of CHF 150 million, while lower volumes had an adverse effect on EBIT in the amount of approximately CHF 90 million. The ongoing market normalization dampens result from trading by around CHF 145 million compared with the previous year. The market environment during the reporting period was characterized by noticeable normalization on forward markets. Compared to previous years, there were no extraordinary revenues from short-term disruptive market events.

This return to more stable market conditions reduces earnings opportunities. The ancillary services and intraday business, however, continued to perform strongly. The KKL fund's profitability, which has decreased, so that's the Leibstadt KKL fund, but it's still above the target profitability. So it wasn't negative, but it used to be very positive. So we will see that impact of CHF 25 million later on.

Let's take a look at the production mix. BKW produced 9.2 terawatt hours of energy in the year under review, thus some 14% less than in the previous year. Due to the dry weather, the production of hydropower plants decreased by about 1.2 terawatt hours, and you can see this at the bottom of the slide. The production of wind and PV plants was lower by 0.1 terawatt hours because of unfavorable wind conditions. The nuclear power plants in which BKW holds ownership are producing the same amount as the previous year. Wilhelmshaven coal power plant was able to slightly increase production, whereas gas volumes decreased by or they decreased as a consequence of a transformer fire at the Italian Livorno Ferraris plant.

As mentioned earlier, both the further decline in price volatility on forward markets and the low production in a multiyear comparison have had a negative impact on the Energy Solutions business segment, as illustrated by this slide. The performance of the STENFO fund was above the target return of 2.8%. And I mentioned this, it has a less positive influence on earnings than in 2024.

Now for the volatility of electricity prices, and you can see this on the left. In 2025, there was a further decline and is the lowest of the last 5 years, so in the multiyear comparison. As mentioned, this reduces opportunities in trading and limits the possibilities of generating margin. Now the drier weather in 2025 led to a significant decline in production from hydro of 1.2 terawatt hours. And in a multiyear comparison, it was lower, and it was also lower than our expectations. Any positive performance of the KKL STENFO fund reduces energy procurement expenses. It was above the target return in 2025, but it has reduced energy procurement expenses by less than in the previous year.

Now Power Grid. Revenue declined by CHF 43.8 million or 6.5%. The main reason for the lower revenue is the EBIT neutral pass-through of tariff reductions for system services and the winter power reserve of Swissgrid in the amount of approximately CHF 41 million. In addition, the decline in grid usage adversely affects revenue with CHF 3 million.

The EBIT of the Power Grid business declined by approximately 7% from CHF 140 million to CHF 130 million. This decline is caused by increased costs compared to the previous year due to higher expenses in the wake of the energy transition. This primarily affects costs related to the smart meter rollout, deliberate staff reductions -- sorry, deliberate staff recruitment and project-related expenses. Depreciations increased by CHF 5 million in the reporting period as a consequence of the growing regulatory asset base due to investing activities. These costs form part of the general production costs, which will be accounted for in future power tariffs.

Now finally, on to Infrastructure and Buildings. Let's take a look at revenue. Revenue at INB rises marginally by 0.1% or CHF 2.2 million to CHF 1.975 billion. On an organic basis, INB saw a decline of CHF 22.3 million as a result of focusing on more profitable projects. This decline was slightly overcompensated by nonorganic growth of a bit more than CHF 24 million.

Now on EBIT, the Infrastructure and Buildings segment managed to grow EBIT to CHF 80 million, a year-on-year increase of CHF 23.1 million. The improvement in operating performance becomes apparent if you consider the reduction in operating expenses as a ratio of total revenue. Despite higher depreciation, this improvement leads to an increase in the EBIT margin from 2.9% to 4% in 2025. And this underscores the successful and stringent implementation of the measures from previous years.

And please allow me to reiterate comments from previous presentations. This is a positive interim result, and we are able to report on another year of continuous operational improvement in Infrastructure and Buildings. Let's now leave the income statement and proceed to the cash flow statement. Cash for the group stands at CHF 854 million at the reporting date, and thus, they declined by CHF 17.5 million lower than in the previous year. That's the 2 blue bars. The high operating cash flow before the use of nuclear provisions amounts to CHF 788.7 million and with about CHF 55 million is only slightly lower than in the previous year. Cash flow has declined less than EBITDA, and that is attributable to cash inflow from energy derivatives. Valuation gains from the previous year, which didn't impact cash back then have now had their effect on cash flow.

Next, you can see the bar that represents the cash for the decommissioning and disposal of Mühleberg nuclear power plant. At CHF 102.7 million, they are at the same level as last year and match nuclear provisions. I'm going to discuss investing activities in more depth in the next slide. At CHF 446.8 million, cash flow from investing activities before STENFO refunds is slightly above the previous year.

Cash inflow from STENFO matching the used provisions. So we have the provisions. They are built over time, amounts to CHF 94 million. It is important to note that the refunds from STENFO must vaguely match the payments made using the nuclear provisions. We could also say the influence from the decommissioning of nuclear power plant in Mühleberg is neutral for BKW in free cash flow terms.

The bottom line here is a positive free cash flow of CHF 333.1 million for 2025. And you can see the gray bar here across the first 4 bars there. This free cash flow is sufficient to finance the dividend of CHF 215.6 million. The high operating cash flow results in the mentioned figure for cash and cash equivalents of CHF 854.7 million.

Now as announced, let's take a look at where BKW has invested. In 2025, investments in property, plant and equipment, intangible assets and the acquisition of group companies amounted to CHF 456.6 million. Of these, 56% were for growth and CHF 200.9 million or approximately 44% were for maintenance.

Why does this figure differ from the investing cash flow mentioned earlier. Here, we only consider investments in property, plant and equipment, intangible assets and the acquisition of group companies and associates and exclude, for example, interest received and dividends received or inflows from divestments of property, plant and equipment or financial assets.

Now on growth. In the Energy Solutions segment, CHF 143.7 million were invested in growth, largely for the expansion of the Cerignola wind farm. In addition, we invested in battery projects in Germany, the expansion of district heating networks and the expansion of hydropower plants. At Power Grid, the investment in growth of CHF 60.3 million was for grid upgrades and the strategic expansion of the electricity grid. At Infrastructure and Buildings, we undertook smaller scale acquisitions and thus invested in further growth.

One note on maintenance of the CHF 200.9 million investment in maintenance, a major share of 122.4 million was for the upkeep of the existing grid infrastructure so in Power Grid. This overview shows you the development of net debt on the left-hand side and the maturity profile of our outstanding bonds and debentures.

The development of liquidity, you can see this on the left-hand side, the bars above the 0 line. I've already explained those. Here, short-term financial assets are additionally taken into account. Financial debt remains stable at around CHF 1.89 billion as a result of virtually unchanged cash and cash equivalents and financial debt -- net debt as of the reporting date has changed only slightly by CHF 36.7 million to CHF 838.2 million.

The maturity profile of our bonds and debentures is very balanced, shows excellent diversification along the time line. This means low refinancing risks, great flexibility and corresponding room to maneuver for future growth financing. Important and not included in these figures is the RCF of CHF 1.5 billion. This serves as an additional liquidity buffer and has not been utilized.

The facility has a term until 2030 and can be extended by 1 year. BKW's A rating allows us to adapt our financial framework to our needs at any time. This slide shows a rough outline of our balance sheet. Since the situation on the energy markets has eased, the balance sheet has remained fundamentally stable with only slight shifts. Current assets decreased by CHF 0.3 billion due to significantly lower gas reserves.

Noncurrent assets increased by CHF 0.2 billion, mainly due to our ongoing investment activity. Liabilities decreased by a total of CHF 0.3 billion, and this is mainly due to lower trade payables and lower contract liabilities as well as a significant decline in current tax liabilities. The net increase in provisions, that's just an additional information. The net increase in provisions for onerous contracts as a result of the Wilhelmshaven value adjustment is almost fully compensated by the use of the provisions for the decommissioning and disposal fund of the Mühleberg nuclear plant so that the amount of provisions remains stable. Equity increases by CHF 0.2 billion.

The main reasons for the strengthening of equity are, first and foremost, net operating profit of CHF 387.9 million and further, the actuarial gains from the remeasurement of defined benefit obligations, strengthened equity. The dividend distribution of CHF 215.6 million in the first half of the year is charged to equity.

As a result, the equity ratio rose further. I explained it with 2.7 percentage points, and it rises to 51.5%, which supports further growth and enables us to continue to actively shape the energy transition. Now ROCE, excluding the Wilhelmshaven value adjustment comes to 7.5% and clearly surpasses BKW's capital costs. It has remained very stable, except for the 2022 record year.

Note on the right, the net debt-to-EBITDA ratio, 0.9x, that's stable. Including partner plans, the net debt to EBITDA is 1.8x, a multiple of 1.8. Now the dividend proposal. The Board of Directors will propose to the Annual General Meeting an increase in the dividend of CHF 0.10 to CHF 3.80 per share. The requested appropriation of the available profit takes into account the long-standing dividend policy of BKW, which we also communicated and affirmed at the Capital Markets Day. It is based on the following principles: distribution of operating net profit.

As you can see here, it's defined as net profit of the group minus the tax performance of the STENFO from Mühleberg. And for 2025, the value adjustment for Wilhelmshaven was excluded because it has no impact on cash. And with the proposed dividend of CHF 3.80, the distribution ratio is at 45.2% with a dividend return of 2.3% based on the year-end share price of CHF 168.40.

With this, I would like to conclude the financial part and pass the floor back to Robert Itschner for the outlook.

Thank you very much. We've already confirmed earlier this year, we expect an EBIT in the range of CHF 650 million to CHF 750 million. When it comes to Energy Solutions, we have still quite high price volatility, which is, however, declining. The energy prices have been hedged at a higher level for 2026. We will have stable earnings in Power Grid and ongoing improvement in profitability in Infrastructure and Buildings. So we are still expecting a gratifying year for 2026.

Thank you so much, Robert and Martin, for your presentation. Now ladies and gentlemen, it is time for your questions. I think we've already received a question in the live stream. And here in this room, dear guests, we kindly ask you to wait for the microphone if you have a question, we kindly ask you to state your name and your company. Is there a question in the audience? Yes, please. First row on the right-hand side, please.

I've got a question with regard to Infrastructure and Buildings. In the past, there was an EBIT margin goal of 8%. Is that still held? Because you said it is -- it was a transition year last year. And maybe it is still a transition year this year with operating progress. So that is the first question.

And then basically, midterm goals, any goals for EBIT for 2026? I think this has been revised already. And the last question, you've also mentioned the shortage of skilled labor that this is quite a challenge. Could you maybe go into that a little bit? It's also probably new talents that you're talking about here.

Should I take this one? Well, infrastructure and buildings, yes, we uphold the 8%. We will move step by step in this direction with operating improvements mainly. So that is the plan. We said 2030, that is true, 8%. If it is earlier, of course, that would be lovely. However, we have a very solid structure in INB. We have done a great deal there. So therefore, we will come to the improvements.

Now when it comes to the shortage of skilled labor. Now honestly, the situation has been mitigated a little bit over the past 5 months. The labor market has become a little bit more difficult for people looking for a job. But we are looking for specific expertise, very skilled labor. And of course, we also invest in internal trainings. We have a new training center where we -- and we also have an academy.

And we're, of course, trying to introduce and acquire talents coming from universities. I'm not quite sure whether I got your question -- the second question acoustically. In 2026, we gave a guidance for CHF 650 million to CHF 750 million. That's for 2026 EBIT. And we also have the ambitions that's for 2030. These are ambitions that we want to reach until 2030. Of course, there is a range, and that is still upheld.

However, we have to be clear. This is not a linear development up to 2030. However, there are no corrections for these figures with the goals for 2030. Have I answered your questions?

So you do not have any revised midterm goals?

No. I mean, there were midterm goals 2022 to 2026. No. Actually, we do a guidance and then we have the Kronos figures. That's the long-term ambition that we want to attain.

Any further question?

Tommaso from UBS. You have mentioned price volatility in the market. Now you need to -- we have to be clear that these prices have become more and more volatile. What about this environment for the trading division? That's the first question. And the second question, could you say anything about the prices in the midterm, what the price -- what the prices are that you've already hedged? And then I also have a question of understanding, but I'll come later on with that.

Okay. So you mean the very current environment that you're talking about. Now this is characterized by extremely difficult developments that are not easy to predict. It is a very challenging environment really. It's very difficult to make an outlook, a forecast because there are so many events on a daily basis that we need to take into consideration. So on that note, I would not like to give you any information about these developments because we need to adapt to the situation on a daily basis. And this happens very, very quickly.

President Trump is making an announcement. Gas prices are increasing. And then an hour later, he announces that the war in Iran is almost over and then the gas prices are decreasing again. So these are very erratic developments to some extent, and it is very difficult to put that in line with our models. But we have very solid models and nothing much has changed about them. Of course, price volatility is high currently, but at the very moment, we cannot really rely on the models, but that is a very current thing.

And the second question was about the hedged prices. Now we are not really there yet. We will communicate a little bit later on. This is also due to the fact that we have become a bit more cautious of how we want to do this, but this has not yet happened. Then I have got a question with regard -- you named it opportunities. for Energy Solutions.

There was a slide with opportunities. So these are planned projects, I suppose. But what does that mean exactly? Are these specific projects where you want to maybe participate in a tender or whether it's not yet clear whether there are maybe appeals against a certain project? And what does it mean when it comes to your CapEx because you're lagging a little bit behind your midterm plan. So can you improve this significantly going forward?

Well, of course, we are observing and monitoring all kinds of opportunities. For example, in Italy, where we have also developed projects that we acquired. They are a little bit higher in terms of price. But what we see currently is that project developers in the market have now problems. And this is also an opportunity that is interesting for us to work or collaborate with these providers.

In the pipeline, we also have the giga megawatt projects, of course, that we see irrespective of the structure of what we want to acquire.

Maybe about CapEx, do not expect that we want to exceed CapEx or go wild with CapEx because we have a financial structure that we rely upon. So this has to be upheld, but there are opportunities as we understand. If this is such an opportunity is profitable, we might go forward with it. But this is an entire portfolio. When it comes to wind, there are many opportunities. We are tendering for several projects. But if it is not in line with our models, with our expectations, then we will withdraw.

Thank you so much. I think I'll take a question from the live stream from Alessandro Foletti from Octavian. 14% less terawatt hours was produced and he asks, this is probably in line with consumption because consumption is decreasing as well, not only in Switzerland, although everyone else says -- tells a different story. So can you give us an explanation for this difference?

Yes, please. Now the decline in production, this is simply, as we've explained before, the hydro and wind levels. That's due to the fact that production has declined not because we didn't want to, but it was just hydro and wind levels that led to this fact. And if we cannot sell it to direct customers, then we will sell it on the free market, for example, on the exchange market. So that happens on the daily basis. So in the short term, of course, this has an effect on the price. But basically, we sell, of course, our energy.

Let me look around in the room. Are there any further questions sitting there? Yes, on the left-hand side, Yes, please.

Simonetzinger from Rabobank. I have 2 questions. The first is on the EBIT guidance of CHF 650 million to CHF 750 million. To what extent it is supported by already like regulatory revenues hedged portfolios? And the second question is on CapEx. What about the geographic distribution, especially in Energy Solutions?

Well, first of all, just a note a remark on the regulatory issue. Now the regulator, if there are effects, they are not supporting effects. Most of the time, they are negative. They impact us. They adversely impact us. We've got hedged prices on the one hand. And in 2026, it is for the first time -- for the last time that we have a little plus of about CHF 30 million from hedged prices of 3 years ago.

And we said 2025, the hedge price was -- now it is CHF 26 to CHF 100. And in 2026, the hedge price will go down again. And CapEx for the ambition, Kronos 2030, what we said was that investment in Switzerland. So the lion's share will go to Switzerland, but the rest will go to Europe.

Thank you. Did we answer your question? Excellent. Any questions here as well? Yes, on the left-hand side, Mr. Rechberger.

Armin Resberger from Zurich Kantonalbank. You mentioned challenging regulatory environment in Europe. Now on this new graph that you presented, what exactly did you mean by that? What are you addressing? And then investment in gas-fired power plants, 2030, 450 megawatts. Can you give us a little bit more of an explanation as to where you are going to invest the gas turbine power plant and investment in hydro, plus 150 megawatts.

I do assume that this is excluding partner plants, such as, for example, KWO. So plus 150 megawatts is quite a lot. So where does it come from? What are the hydro projects that you're addressing there?

I guess Robert will answer that question.

Now regulation. Now there are different issues there. In Germany, for example, there is a debate on how to deal with the volume of connection requests for energy storage facilities. So that's a high amount, which will never be realized. Now the question is that the -- these are questions that the regulator has to answer as to how to proceed and what kind of rules apply when?

We assume that the storage facilities that we are pursuing will still benefit from the reduced fees, but that, of course, is one aspect of the profitability calculation. Then in Europe, we have discussions within the EU of the decoupling of the gas price from the electricity price. Now what does this mean and what the result of this discussion will be is something that we can hardly predict. There are different possibilities for that.

For example, certificates for free or other solutions, but these are developments which we need to observe because they will have an effect on the market. Now gas power plants, we are pursuing one project. And of course, we're also talking with other parties in the market, but TNL is one of our partners where in in Germany, we are going to take a share stake in this entity.

And there will be a tender. There will be an auction on that volume. But we haven't seen the tender documents or all the specifications and everything. But actually, this is something that should be available very soon because actually this year, 2026, this is supposed to happen.

So that's the gas power plant in Ham. It's a location where there were already 2 gas power plants at this time. Now investment in hydro, I'm wondering about the 150 megawatts. That's the pipeline, I think you were talking about, right, in that slide, yes. Yes, that's correct. This year, Grimsel 4 will be planned or take a decision on that and start the construction. That's a pump hydro power plant.

The capacity that will be turbines. So that's 2x 75 megawatts, and they only partly accounted for in this figure. But then we also have reservoir enlargement. These are elements that are in the pipeline, but of course, the payback will come later. The payback for our strategy will be -- take a while.

And Mr., he also wondered about the partner plans. And yes, in part, they are accounted for. Then let's take a look at the live stream. We have a question from battery storage. We already talked about battery storage, Mario Graf from Energate. In December 2025, BKW announced that it plans the building of 4 large battery storage facilities in Switzerland. Did I understand correctly that the investment decisions have not been taken at this point? Could you still give us an explanation on what the current status is and how these projects are supposed to be developed?

No, for the Swiss projects, we haven't taken a decision yet. These are just studies. We're analyzing the locations. And of course, we know the locations and how they are, but we're still analyzing about zoning and what the municipalities think about those projects. So this is still a planning phase. But as soon as we know that the construction of the storage facilities would be possible, then, of course, we will take a decision.

Thank you, Robert. Another question here in the room. Yes, here in the first row.

I have a question for clarification to Mr. Itschner, which relates to Mr. Tommaso's question from UBS. The electricity prices, the 3-year forward prices in Germany. And what I can see there is that over the last 5 days, for example, prices were paid between EUR 64 and EUR 86. So that was the highest level by an energy trader. Now I'm not sure what the underlying volumes are. But shouldn't it be an expectation to your traders that they are at their desks all day long to make sure that we can just level out the price at EUR 85 for the next 3 years. In the financial industry, we would know how to -- how the traders are supposed to behave.

Well, thank you very much for this advice. Now EUR 86 is a new price for me. I saw different prices yesterday, and we discussed it. And it's absolutely true. Our traders are sitting there, and they are taking care of hedging those volumes. Well, what we do is we do proxy hedges. So we hedge Swiss volume in other markets, and that makes it a little bit more complex than you would think.

But of course, exactly this is the task of what our traders are supposed to do. So we can assume that you're really trying to hedge those opportunities and that we can see those opportunities with Mr. figures. Well, of course, this is the ambition. Just like on the financial markets, it doesn't always work perfectly. But of course, we're making an effort to just hit the right moment.

And in the long end, the geopolitical disruptions haven't caused a large shift yet. Of course, you may wonder why this is the case. And the scenario is absolutely not clear yet. We don't know whether the conflict will last much longer. But yes.

And we have another question here on the right-hand side. The microphone is on its way.

Alexander Bossert from UBS. I have another question for clarification on Slide 8, the pipeline. On the right-hand side, I do assume that the figures, 150 number, CHF 1,450, that's the Swiss franc million amount of CapEx. It's not megawatts. Otherwise, it wouldn't total. No, that's megawatts actually. Yes, it is. So you're planning battery storage. And on the right-hand side, you have CHF 1 billion. How do I have to understand these figures?

We have specific projects that we're working on worth more than CHF 1 billion for 1,000 megawatts. And of those, we are about to take investment decisions in the volume of 500 megawatts if we -- that we would build immediately. And then we will think about whether the remaining 600, the 600 could be spent on other projects, whether it is a good thing to have battery volume in that amount in the portfolio or not, it shows that there is a possibility to do more if we came to an agreement with the partners that would be involved in these projects. So this is how we tried to kind of illustrate this on the slide.

And of those investment decisions planned for 2026, if all of them materialize, what is the CapEx? What is the number that you're expecting?

Well, you can assume that we invest between CHF 400 million and CHF 600 million, and that's a CapEx figure that you could also assume for 2026. Investment decisions are complex. And of course, it's always difficult to make a forecast, but you can assume this range.

And then there's a bond that will expire this year. It will be refinanced from the market, correct?

Yes, correct.

Question from Mr..

Emanuele Oggioni, Kepler Cheuvreux. I have 3 questions. The first one is on -- basically all the 3 questions on the '25 -- sorry, '26 guidance. The first one is on the generation business and the volatility embedded in the guidance, considering that you released the guidance in mid-January. So with a different -- completely different scenario of volatility of the prices.

So my question is not your bet or your outlook on the evolution of the volatility in '26 is to what extent the top and mid-range, bottom range of the guidance includes probably hopefully the lower volatility than in '25. So depending on how last this condition, this volatility market will last, how long will last. In any case, you should have a net benefit compared with the guidance. So if you can add more color on that. And this is the first question. The second is still on the guidance, but regards the embedded output of the generation business in hydro production. So after a dry year in '25, what are the embedded terawatt hour production for hydro in the range guidance still? And the third question is on the hedging. We know that the hedging level price is above or should be above CHF 100 in '26, if I remember well, compared with the previous slides presentation. And could you update on '28 hedging so far never disclosed before?

The moderator is summarizing the question. Yes, I'm happy to take this question. Your first question, you're absolutely correct. At the moment, we are faced with higher volatilities. But in the short term, also intraday ahead, the volatility volatilities were pretty high. What we didn't have in 2025 were low volatilities of the forward contracts. Now regarding the last 14 days and the effect on trade is something that I cannot tell. I can only say 2 things, tell you 2 things. I would caution you to become speculative because we have a clear guidance, which is out there and which is valid.

Now we have a feeling that over weeks and months, we would suddenly be faced with a wonderful trading result, then we would give you this information. But please be cautious. Now second, hydro. In '25, it was 3.7. For '26, we are expecting normal wind conditions that for '26, we're planning with 4.1 terawatt hours. So an increase by about 0.4, which would be the average. Now the weather, of course, is something that we can't predict. So we don't know. Now the hedge for 2028, about CHF 60.

I'd like to go to the live stream and a question that we've received there. It's asked by Rene Rückert of Baader Bank. The positive outlook for Infrastructure and Buildings, does this also include the special asset in Germany, which might lead to a higher investment? Or is this calculated without this special effect?

No. We do not have any assumptions for the special asset in Germany. The special asset in Germany would give us the opportunity to grow a little bit faster also in the years to come. However, I've also shown that, especially in engineering, we have a very high order backlog. So we are not relying on this special asset to come. But of course, it would be great for the years to come.

Thank you very much for this answer. We have 2 questions in the live stream. We have one from from Euro Energies. It is in English, and I shall read it out and then summarize it in English.

On your international growth, which countries do you want to compare and how internal growth or new acquisitions? What is your plan in France? And Mr. is summarizing the question in German.

Well, basically, our strong position in Switzerland has to be safeguarded. However, also in our core markets around Switzerland, across Europe, we want to grow, of course, but we want to have a differentiated portfolio. And this differentiated portfolio is across many countries without a special focus. However, we want to guarantee and make sure that we are well distributed in the market.

In France, we are actually quite strongly positioned with wind production, for example, but also with marketing of green electricity. And we're, of course, also active with hydro, for example, and we certainly will grow in this respect. We're working that we also will improve the market access on the sales side.

France is very interesting because the old market scheme has been abolished and the free market is now playing a greater role, which was in the past, regulated much more, which is, of course, an opportunity for us.

And we have one last question in the live stream by Peter. He asks about the value adjustment of the coal-fired power plant in Wilhelmshaven. Do you want to sell this power plant in the midterm? Or will you keep it as a reserve power plant? Have you benefited from this specific coal power plant in the year 2026 so far?

But the value adjustment, of course, is not linked to our wish to withdraw from the coal production up to 2030. We want to withdraw from coal power plant and its productions. However, there is not a true market for stakes in coal power plants. We have to make sure that this is clear. But of course, we are monitoring this, and we're trying to implement it. This year, the power plant has already been in operation, which is basically good for us. We will see what the remainder of this year will bring. We expect that as of this year and going forward that the operating hours will decline quite significantly fundamentally for us. It is that if there are crisis, supply crises like this, that it is good to have such a power plant in operation.

Thank you very much. This leads us to the end of this Q&A session. I would like to thank you very much for your interest and your questions, and thank you for the statements by Robert and Martin. Now before we conclude today's analyst and media conference on BKW's 2025 fiscal year, I would like to draw your attention to the next date in 2026.

Now on August 19, 2026, BKW will publish its half year results. The presentation of the half year results will longer take place in a hybrid format, but it will be exclusively online. And we would like to increase our visibility for the capital market between the half year and full year results. BKW will, therefore, provide information on business performance up to the third quarter for the first time in 2026.

Now this new 9 months business call -- this update business call will take place on Tuesday, November 10, 2026. On behalf of BKW, I'd like to thank you very much for your interest for our guests here today, we'll have refreshments that are available at the back of this room, and we would like to invite you to enjoy it.

We're looking forward to welcoming you again on the August 19, 2026, for the online presentation of the half year results 2026. We wish you a wonderful spring and summer, and see you then. Goodbye.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning, and welcome to today's conference call of BKW, where we are going to share further explanations regarding today's ad hoc release. My name is Sandra, I'm the Chorus Call operator. [Operator Instructions] The conference call will be recorded [Operator Instructions]. The conference cannot be recorded for publication, it is prohibited.

Let me hand the floor to Robert Itschner, the CEO of BKW.

Good morning, and welcome to today's analyst and media call. Thank you very much for taking the time to join us at such short notice to accompany us through this ad hoc meeting.

We would like to start by explaining the ad hoc announcements, and we'll certainly be available for any questions that you may have.

Now what are the main messages for our media call? BKW expects the Wilhelmshaven coal power plant to generate less electricity in the future. Combined with decreasing volatilities in electricity prices, revenues from the operation of the power plant are expected to decline accordingly. This results in a value adjustment of around CHF 110 million on BKW's stake in the Wilhelmshaven coal power plant. The power plant has thus been fully impaired.

To expand flexible energy production, BKW together with partners is planning to build an H2-ready gas power plant in Germany. Now what do those decisions have in terms of an impact? Well, BKW expects operating results of CHF 650 million to CHF 670 million for 2025 following the impairment on the Wilhelmshaven power plant, the new EBIT guidance for 2025 is CHF 540 million to CHF 560 million. For 2026, BKW expects earnings with an EBIT guidance range of CHF 650 million to CHF 750 million.

Now in the following, I'm happy to talk about some further details, the value adjustment Wilhelmshaven. With its Solutions 2030 strategy, BKW communicated ambitious sustainability goals in the areas of climate, energy, nature and people on November 8, 2024. It set itself the goal of halving its Scope 1 and 2 CO2 intensity by 2030 compared with 2022. In addition, BKW is aiming for Net Zero emissions in Scope 1 and 2 across the entire group by 2040. We naturally remain committed to these goals. We have previously communicated that we're considering an accelerated phaseout of coal. This still applies. However, it is also important to clarify that the power plant remains in operation. The value adjustment is not related to an ongoing sales process or a decision to decommission the power plant.

How does the gas project in Germany fit our strategy? Well, with its Solutions 2030 strategy, BKW also announced in 2024 that it intends to switch from coal-fired power plants to hydrogen-enabled gas power plants. This will significantly reduce CO2 emissions compared to today and enable BKW to meet its stated sustainability targets. As part of this transformation of our production portfolio, we're planning to build an H2-ready gas power plant in Germany. BKW and the Municipal Utility Corporation, Trianel have founded a joint project company. This company is currently making all the necessary preparations to participate in a tender by the German government for hydrogen capable power plants within the framework of the German Federal law on securing supply power, amortization of existing power plants. We're aiming for a 40% stake in this power plant.

A decision on investment in the construction of an H2-ready gas power plant has not yet been made. This will only be possible within the framework of the aforementioned tender. In addition, there are plans in the medium term to operate these gas-fired power plants with renewable hydrogen, which will further reduce CO2 emissions. BKW is therefore sticking to its communicated sustainability targets.

I would now like to hand over to CFO, Martin Zwyssig, who will explain how the effects are likely to impact EBIT in 2025.

Good morning. Thank you. I'm happy to explain how we arrived at the revised EBIT guidance communicated today for 2025. The starting point for the guidance is, as always, the budget, which roughly aligns with the midpoint of the range that we communicated. It is at about CHF 700 million for 2025.

Starting from there, 2025 faced us with negative quantity effects in hydropower and wind, which caused a negative deviation of approximately CHF 40 million. There were further influences, which, however, offset each other. In addition, we recognized a value adjustment of roughly CHF 110 million for the Wilhelmshaven coal power plant as a one-off effect. This leads to a revised midpoint guidance of CHF 550 million. And we can narrow the range to plus/minus CHF 10 million, which results in a revised EBIT guidance of CHF 540 million to CHF 560 million for the year 2025. This means that BKW can expect a good operating result of CHF 650 million to CHF 670 million before the value adjustment for Wilhelmshaven, which is, in fact, in the range of the original guidance of CHF 650 million and CHF 750 million. The amount may still vary by a few million francs. We will not be able to communicate the final amount until the annual financial statements are issued.

The value adjustment is done by increasing the existing provision for onerous contracts and will therefore have an impact on EBITDA. It will, however, not affect cash. The amount of the provision will be recognized as energy procurement costs. This means the value adjustment of Wilhelmshaven power plant is then recognized in full. The increase in the provision will contribute towards a reduction in future valuation risks.

What is important for you, an exchange rate loss from the valuation of the euro investment continues to be recognized in equity. Upon a disposal, this effect in the amount of, at present, approximately CHF 120 million would be recognized in profit and loss and thus negatively impact earnings. This is also called recycling of ForEx attacks. It has no adverse effect on equity because it is already recognized there, and it doesn't adversely affect cash either. The final amount depends on the euro-Swiss franc exchange rate at the time of the transaction. We are happy to present the results -- the details of our financial results as usual at the annual conference on 11th March of 2026.

I will now hand back to Robert for the outlook for the year ahead of us.

Thank you, Martin. In the top media release this morning, we also announced EBIT guidance for 2026 in the range of CHF 650 million to CHF 750 million. This is to give you an idea of how we assess the current year and in order to shed light on that, some facts on the divisions.

With Energy Solutions, the forward price volatility is lower than last year. Accordingly, we expect a decline in earnings from forward price trading in asset-backed trading. Spot price volatility, on the other hand, remains high, driven by the expansion of PV. Accordingly, we expect earnings from flexibility optimization and system services to remain high. For the production year 2026, we expect to return to the long-term average in terms of volume.

Power Grid. We do not expect the reduction in the regulated weighted average cost of capital for the grids to have a negative effect in 2026 due to existing coverage differences. Minimum remuneration for solar power fed into the grid and the reduction in basic electricity tariffs will have a negative impact on earnings in 2026.

Infrastructure and Buildings. We expect a slight improvement in the EBIT margin again in 2026.

Summary. We, therefore, expect EBIT of between CHF 650 million to CHF 750 million for 2026.

And I would now like to hand back to Martin.

Thank you, Robert. The starting point is again the budget for the guidance and as mentioned, is at the mid of the range. And compared to 2025, there will be higher hedged prices, a normalization of quantity effect for hydropower and wind to the level of originally planned for 2025 as well as increased earnings from the Infrastructure and Buildings segment. And all this will contribute to an EBIT increase compared to 2025 of around CHF 90 million.

On the other hand, we are anticipating a decline in results from trading to a lower forward price volatility in 2026. And this negative effect will be around CHF 40 million, together with a decrease in power tariffs in basic supply and the minimum remuneration for photovoltaic feed-in and that amounts to CHF 10 million, and this leads us to an EBIT of some CHF 700 million. And as usual, we apply a range of plus/minus CHF 50 million to the midpoint of the guidance to account for volatility. The EBIT guidance for 2026 that comes to CHF 650 million to CHF 750 million, and it is at the same level as the original guidance for 2025.

So, much from us, and we are now happy to take your questions.

We will now start the question and answer session. [Operator Instructions] The first question comes from [ Sonia Singh from AWP ].

I have three questions, if I may. Are you looking into divesting the stake in Wilhelmshaven? Is it excluded that there are other impairments on that plant?

And on Hamm, the following question. Could you repeat perhaps, please, what you expect? When would you commission the plant in Hamm?

First of all, whether we have to expect further value adjustments or not? Actually, this won't happen because the adjustment of CHF 110 million means that the power plant is fully written off. So, regarding the divestment, at the moment, no divestment process or sale process is ongoing. And we said that the value adjustment is in no way linked to any intention to sell. However, in the framework of the strategy Solutions 2030, we have been looking into a phaseout of coal-fired energy. And then the gas project, in the early '30s, this is a project that will be -- will come into operation.

The next question comes from [ Jürgen Maier ] from [indiscernible]

I also have three questions, if I may. First, could you perhaps paint the larger picture. On the one hand, there's more volatility in the spot market. On the other hand, there's less production in coal power plants. How does that fit together, particularly also in times when there's little wind?

Second question, where does the hydrogen come from? In Germany, there's a huge discussion on hydrogen because a lot of projects are not being realized. Where does the hydrogen come from? And when will you begin to see hydrogen?

Third, there were discussions about gaps in the energy supply in Switzerland. Would that not be an issue that BKW should be doing more in terms of there of that?

Thank you for the questions. Larger picture volatility vis-a-vis production in the coal plant, Wilhelmshaven. Well, adding more capacities was a thing. We see volatility, obviously, in the daily changes, but a coal plant needs some time to get started. Hence, this is not the ideal technology to bring about short-term changes in the grid. There's no compensation effect there at short term. Hence, we are of the opinion that there are fewer operating hours in the coal plant, Wilhelmshaven.

Hydrogen then. Well, yes, there's quite a discussion around H2. There initially was quite a hype two or three years ago on hydrogen. And now in the meantime, it's become clear that this is not quite that easy. We'll have to see how fast the hydrogen market will develop the market on hydrogen. We have a problem that there is no market. There are a few people that would justify investments. There are few -- there's little demand. Hence, there will need to be subsidies on the production of hydrogen. This will happen sooner or later as we see it. But of course, I cannot tell you when, what quantities of hydrogen will be generated. And hence, when we will be able to switch the gas plant to hydrogen, we still think that the fuel switch from gas to hydrogen in Germany makes a lot of sense. Gas-powered stations are -- have about 40% of the CO2 emissions of a coal plant. It's considerably less. Hence, it's a suitable technology for a transition when we need to compensate for these volatilities.

Your last question, gaps in the supply that were commented by VSE. Of course, there are certain fears that we are too slow in Switzerland to take the measures that we all decided on. Part of that is the expansion of capacities in hydropower. Wind farms were initially also part of the plans that were communicated by the federal institutions. I do share the concerns. I also think we need to move ahead to realize those projects in Switzerland, but I do not see an immediate risk of gaps in the supply currently unless things were to change dramatically.

Next question comes from Tommaso Operto from UBS.

A follow-up question on the gas plant. Do you have an estimate around the installed capacities there? And you talked about the early 30s. This is not part of your midterm planning of 4.7 gigawatt installed capacities until 2030. Could you provide us with an update here? Is there potentially a shift of this goal given the fact that you will have to realize certain investments that have not been realized yet?

On the first issue here about capacities in Germany. The federal government talked about 20 gigawatts installed capacities. in the first tender, it's going to be less, considerably less in the first step, of course. But those are the scales that are provided for by the government in Germany that it needs in order to make sure that there's stability in the German grid.

On the capacity of our project, we cannot say anything about that because we are involved in a competitive tender. And therefore, we would not like to make any communication on this.

The next question comes from [ Kristian Schneider from Martell ]

I also have a question on the decline in annual production. You said that less will be produced in Wilhelmshaven. Could you quantify that, please? Could you give us an order of scale perhaps?

We cannot say that exactly because that is not information we generally communicate. But what we can say is that numbers of operating hours already last year declined massively. So, there's this trend. We certainly generated certain revenue because we hedged coal and we're able to produce profit, but that's over. Hence, the power plant needs to be produced black figure, and we see the greatly reduced operating hours.

Next question from [ Mario Graf from energate messenger Schweiz ].

I hope you can hear me. I also have three questions. First question about capacities of the gas power plant that is planned. You said you cannot put a figure to it. Could you at least give a scale of magnitude?

Second question also around the planned gas power plant. Could you also hear talk about numbers, how much does BKW want to invest?

Last question, in the connection of the German strategy on power plants in Germany, more capacities are planned for in Germany. Is it possible that the two instruments in Germany will lead to a fact where BKW will invest also in other projects in Germany. Is that conceivable?

On the first question, the magnitude of scales of capacity, it's going to be a sizable power plant. I can say so much, but we don't want to talk in terms of gigawatts or megawatts in terms of capacities. On the magnitude of scale and investments, well, we're doing these calculations now and we have values from existing gas plants. But obviously, we're in the midst of the process. Hence, we do not want to communicate any further details. On the market generally on the markets around capacities, whether we will be further investing, we don't know yet. We'll see.

In the strategy, we basically said that such participations are in the books to a certain extent with the project Hamm. We see a good possibility to realize that if that was not to work for any reason. Of course, we'll be looking out for alternatives. But we need to take note of the fact that the interest in the tender is great in Germany. So we're not the sole provider. Other organizations will also offer and hence, projects where BKW will be able to participate are not numerous. But of course, we want to implement our strategy and hence, we'll also position ourselves.

We have an additional question from [ Yasmine from INVasset ].

Yes. It's me again. I'm going to reduce my number of vessels to two. The investment in Wilhelmshaven used to be criticized. Would you regard it as a mistake?

And then a second question on gas-fired power plants. There's a tender ongoing in Switzerland as well. Any comments on that? And what is the role of gas for the future in Switzerland?

The first question was that it was a bad investment decision back then. The difficult to assess today because this is a power plant we operated over a long period of time, and we earned good money with it in times of the energy crisis, particularly. So, state today, we will no longer invest in coal. It's a basic principle because we want to stick to our sustainability goals, but I'd be cautious to say that this was a bad investment decision.

Gas power in Switzerland is being discussed as reserve power plants. Operators would have to bring the investment, build the plant and then be paid by the federal state for its operation according to the orders made on when production is to start. This is a very different business case from the one in Germany, where we have a tender where you commit to a price for the power plant, but then operate the plant under market conditions, which is much more interesting in terms of an investment than just have a reserve gas power plant that you keep in the portfolio somewhere.

Can this change in Switzerland? That's a good question. Lots of discussions around that. What is going to be necessary in the long term? Do we need large power plants and what sort of plants will we need? The discussion has been launched also with the blackout initiative. We'll see what the process will be and the consensus will be in Switzerland in the next years.

We are now going to take the last question from the German conference call. That's [ Armin Hochberger from VRG Capital Bank ].

Well, actually, this is a little bit new territory, these H2-ready gas power plants. I have a technical question. Are there gas turbines on the market available already, so standardized gas turbines that can process H2?

Yes, they do exist, and we work together with one of the largest gas turbine producers worldwide. It's a large German company, by the way. I'm not a gas turbine specialist, however, but it is true that there are very few changes that will have to be made on the turbine itself, nothing on the turbine actually. It's just the back system that feeds the gas into the turbine that will need to be refurbished to be operational for H2.

Technically, it seems to be not a problem. The largest issue, however, is the production of H2, it's transport over longer distances. Those logistics will have to be built up for H2-enabled operations.

We're going to take a question from the English conference, and we have Laura Bucher from Octavian AG.

Just two questions from my side. First, are there any other assets that currently where a similar reassessment of the energy market volatility and utilization could lead to further impairments?

And then the second one on the 2025 EBIT, is the delta between your expected number for '25 on an adjusted basis and the midrange of the guidance, which was CHF 700 million, is it due to even lower volatility versus previous expectations? And thus, we should assume that the EBIT in the other two, two other divisions are within the guidance? Or is there something one-off there as well?

I may read the last question first. It was a pure quantity effect from the CHF 700 million. It was mainly hydropower, but also wind. This has nothing to do with volatility, this deviation. And then your question regarding whether similar value adjustments might happen or whether they are being assessed.

So, my first comment is that all our assets are being subjected to the impairment test once a year. No, we are not assuming that this magnitude of value adjustments would have to happen again.

Maybe one additional comment. The value adjustments for 2025 are done. These are all the value adjustments that will be performed.

Next question from Emanuele Oggioni from Kepler.

If I understood well, you mentioned in for '26 outlook, a CHF 50 million decline year-on-year from trading now due to lower price volatility. So, this is one of the negative moving parts year-on-year for '26. Could you detail also the moving parts on regulated networks in '26 and also onwards because you mentioned -- so first of all, the year-on-year deviation '26 compared to '25. But also you mentioned in the press release that the profitability in regulated networks will be affected also not only in '26, but also in the coming years. So if you provide also add more color on the coming years.

Well, the guidance is always for the following year. Just a small correction. You mentioned CHF 50 million in terms of volatility and price effects, it's CHF 40 million. And coming back to your question, the effect due to the reduction of power tariffs, and the feed-in, the minimum remuneration for feed-in of photovoltaic effects. Those two effects together for 2026 add up to CHF 10 million.

The effect from WACC from grid, so that's the basic supply. The effect -- the regulatory effect from reducing the grid WACC in 2026 will not have an effect, although it is already effective because this goes at the expense of price differences. You have the coverage differences, recovery differences that you either build or consume and the negative WACC effects will be consumed. That will have a negative effect in 2027. And this will lead up to another probably CHF 10 million then for 2027, though.

And one additional comment, the WACC, W-A-C-C, for the grid is being defined on a yearly basis. For 2027, we have an internal evaluation of it, but the actual number will only be confirmed during 2026.

We're going to take the last question from [ Rolf Renders from AMG Analysen & Anlagen AG ]

Can you please update your dividend policy or refresh it?

I'm happy to do that. Our dividend policy has 2 effects. On the one hand, 35% to 50% of the operating net profit. And the other component is the stable dividend policy that we aspire. So, not a reduction of distributed dividends. So that's our dividend policy, which is in place. And it won't be influenced by this value adjustment.

Ladies and gentlemen, that was the last question. And I would like to hand back the floor to Robert Itschner for his concluding words.

Thank you again for participating also in the discussion, and thank you for your interest in BKW. Wish you all a great day, and I'm very much looking forward to seeing you again at our balance press meeting. Bye, bye.

Ladies and gentlemen, this is the end of the conference call. We'd like to thank you for your attendance. Bye, bye.

[Statements in English on this transcript were Spoken by an interpreter present on the live call.]