EVN Aktie

Good morning, ladies and gentlemen, and welcome to EVN's results for the first half of the 2025-2026 financial year. [Operator Instructions]

Let me now turn the floor over to Alexandra Wittmann.

Thank you. Good morning, everybody, to EVN's conference call on the results for the first half of our current financial year. Overall, EVN's performance has been sound and in line with expectations. The main deviation from our planning assumptions were the below average wind and hydro conditions in the first 6 months. However, on group level, our diversified business model helped to offset such effects. Our Generation segment suffered from these weaker generation conditions. Price levels for the marketing of own production also declined year-on-year. The contributions from the equity consolidated companies, RAG and Burgenland Energie were also lower. RAG's results returned to a normalized level after last year's exceptional performance.

These negative developments were contrasted by above all, a substantially better performance of the Networks segment, which reflects the organic growth from growing investments into the electricity grids. In addition, our heating business in Austria and our operations in Southeastern Europe delivered a very solid performance in the first 6 months. Regarding recent geopolitical events, especially the Iran conflict, please note that our reporting period covers October through March. Therefore, any market volatility arising in March has not had a material impact on the results we are reporting today. I can confirm that we are fully on track to implement this year's investment program. We plan to invest up to EUR 1 billion annually up to 2030. The majority, around 80% will be invested regionally in Lower Austria. Key areas include network infrastructure, renewable generation, battery storage, e-charging infrastructure and drinking water supply.

We are also well on track to reach our renewable expansion targets as is evidenced by the progress made until end of March. Total wind capacity increased to 561 megawatt installed capacity, and we are working on further projects to reach our 2030 wind target of 770 megawatts. The same applies to PV. Capacity increased to 133 megawatt peak with a target of 300-megawatt peak. And our battery storage currently stands at 12 megawatts and shall increase to 300 by the end of the decade. Construction is underway on 2 large battery projects at former thermal power plant sites, one with a capacity of 70 megawatts and another with 60 megawatts.

I would also like to update you on a new cooperation in e-mobility. Together with the petrol station operator, AVIA, we roll out and operate fast charging stations across all Austria. On March 2, we completed the closing of the sale of our international project business to STRABAG. In this call, I will provide some details on the transactions as well as on the resulting deconsolidation effects. On the next slide, I will take you through the main financial developments in the reporting period. Revenue rose by 3.2% year-on-year to EUR 1.8 billion. The main reasons were positive regulatory price effects from the network companies in Lower Austria and Bulgaria.

In contrast, there was a drop in revenue from renewable generation due to price and volume effects. In addition, the reserve capacity contract for the Theiss gas-fired power plant with the Austrian transmission grid operation, APG, ended in September '25. Last year, other operating income included the insurance compensation payments related to the damages from the flood in 2024. This year, there is a positive effect of EUR 10 million from the badwill associated with the acquisition of a fiber infrastructure company. This acquisition will further strengthen our Internet and telecommunication business. The cost of electricity purchases from third parties and primary energy expenses increased due to higher upstream network costs and higher procurement costs in the heating business. This increase was contrasted by lower procurement costs and reduced quantities of natural gas.

The cost of materials and services declined as last year was impacted by flood-related repair costs. The rise in personnel expenses reflects mainly the adjustments according to the collective bargaining agreements. The share of results from at equity accounted investees was down by 10% at EUR 68 million, mainly due to the declines at RAG and Burgenland Energie. In year-on-year comparison, our supply company, EVN KG reported a further improvement, which, however, was dampened by a new provision for the social tariff required under Austria's new electricity law. In total, group EBITDA improved by 8% year-on-year to EUR 553 million. Scheduled depreciation and amortization increased by 9%, reflecting our high investment program. Group's EBIT increased by 8% and amounted to EUR 363 million. Financial results improved to minus EUR 22 million. In total, we generated a group net result of EUR 312 million in the reporting period, which represents an increase by 25%.

Please note that the group net results includes EUR 33 million from discontinued operations. This amount results from the deconsolidation of the international project business. This is a positive noncash one-off effect, which includes the OCI recycling of foreign exchange effects and valuations previously recorded in equity. Apart from these P&L effects, the closing of the transaction resulted in cash proceeds of EUR 100 million. In addition to payment of this purchase price, STRABAG took over intra-group cash pooling receivables of EUR 106 million. In total, this has a positive effect of EUR 206 million on EVN's net debt. EVN and STRABAG also agreed that guarantees for the 2 projects in Kuwait and Bahrain as well as claims to future payment inflows in the form of an earn-out will remain with EVN. The book value of these earn-out receivables recorded by EVN is EUR 128 million.

Now let's move on to the next slide, which provides information regarding the group's balance sheet structure. As just mentioned, the sale of the international project business had a positive effect of EUR 206 million on EVN's net debt. It declined to EUR 1.1 billion with a gearing of 15.7% by end of March. However, due to our high investments, which will total EUR 1 billion for the financial year, net debt will again increase by end of September. Our financial flexibility remains secured and solid. EVN holds contractually committed undrawn credit lines in the amount of EUR 770 million. I can also inform you today that both credit ratings were confirmed recently. In April, Moody's reaffirmed its A1 rating with stable outlook. And in May, Scope again awarded us an A+ rating with stable outlook. Our declared goal is to maintain solid A category ratings in the future.

On the next slide, I will walk you through the development in our segments. The developments in our Energy segment reflect the strong performance of our heating business during the winter half year. Due to the cold weather in Austria, temperature-related energy demand exceeded both the long-term average and the prior year. This resulted in higher heat sales volumes. In addition, the ongoing expansion of our heating network contributed to this overall growth. Overall, the heating business recorded an increase in both revenue and earnings. Segment revenue, however, declined due to the price effects in the marketing of own generation. The normalization of operating results at our equity consolidated supply company, EVN KG, continued during the reporting period. However, results that could have reached a double-digit level were dampened by the provision for the new social tariff for vulnerable customers in Austria, which amounted to approximately EUR 13 million.

Nevertheless, EVN KG's EBITDA contribution improved year-on-year, reaching EUR 1.7 million. Together, these developments led to an EBITDA of EUR 81 million compared to EUR 63 million in the previous year. EBIT came in at EUR 65 million. For each of the segments, we are updating today the outlook originally published in December. For the Energy segment, we take a more positive view on the heating business following its strong performance in the first 6 months. In contrast, the burden of the social tariff will continue to weigh on EVN KG. Otherwise, the full year result of the segment will largely depend on the further development of the market prices.

Now let's turn to our Generation segment. Electricity generation volumes in this segment declined by 10% year-on-year. While the commissioning of new wind parks and repowerings helped to offset a substantial share of the lower volumes resulting from below average wind and water flows in Austria, the nonrenewal of the reserve capacity contract for the Theiss power plant by APG led to a significant decline in thermal generation. In addition to these volume effects, the lower prices for the marketing of generation resulted in declining revenue and earnings from electricity generation. Our equity accounted investee, Verbund Innkraftwerke contributed lower earnings compared to the previous year due to weaker water flows and lower market prices. In total, the segment EBITDA was down by 40% and stood at EUR 58 million. EBIT amounted to EUR 33 million.

I confirm the segment outlook, which we gave in December. We expect a decline in EBITDA, which was positively influenced in '24/'25 by the insurance compensation payments. Under normal average market conditions, generation typically accounts for 15% to 20% of our group EBITDA. Next is the Networks segment. To begin with, I would like to remind you that the Networks segment now also includes the drinking water business in Lower Austria, which was previously reported in the Environment segment. This segment no longer exists following the sale of the international project business. The water business adds an annual and stable EBITDA contribution of about EUR 15 million to the segment. The main activity in the segment is the operation of the electricity and gas distribution networks in Lower Austria. In line with the Austrian regulation, segment results are reflecting the ongoing high investments in the network infrastructure and related RAG growth. Due to the higher tariffs, EBITDA was up at EUR 265 million and EBIT totaled EUR 164 million. All in all, a solid first half year for our regulated business.

The financials of this segment include a positive one-off effect, which was already recognized in Q1. It relates to the acquisition of a fiber infrastructure company and resulted in a positive effect of EUR 10 million from Badwill. Based on the organic growth driven by our investments in the networks, the strong performance in the first 6 months and higher tariffs in line with the Austrian regulation, I confirm our segment outlook. We expect higher results for the current financial year.

Finally, let's move on to the Southeast Europe segment. This segment had a strong first half year. This was supported by, among others, absence of previous year's regulatory compensation factors in the Bulgarian grid business as well as higher energy demand in North Macedonia due to colder weather. Segment EBITDA was up by 31% and amounted to EUR 104 million. Segment EBIT was EUR 55 million in the first 6 months. In April, we commissioned our first large battery storage facility with a capacity of 10 megawatts and which is co-located with the PV plant. Around 1/3 of our 300-megawatt battery storage target for 2030 is planned to be built in Bulgaria and North Macedonia.

I confirm the segment outlook. Both EBITDA and EBIT are expected to remain broadly in line with the prior year. For your reference, EBIT in '24-'25 equaled EUR 88 million. Let me now continue with the development of our group cash flows. Gross cash flow rose by 1.7% year-on-year to EUR 487 million. Positive factors were partly offset by the correction of noncash earnings components related to the deconsolidation of international project business. Cash flow from operating activities totaled EUR 268 million. Higher seasonal capital commitment resulted from an increase in trade receivables at EVN Warme and the Southeast Europe sales companies as well as in trade liabilities.

Cash flow from investing activities amounted to minus EUR 98 million. Higher investments were contrasted by the proceeds from the sale of the international project business. The cash flow from financing activities was minus EUR 179 million and included scheduled repayment of loans as well as our dividend payment for the '24-'25 financial year. In the previous year, a new promissory note loan of EUR 100 million had been issued. The net change in cash and cash equivalents amounted to minus EUR 9 million.

Finally, let's come now to the outlook for the current financial year. I confirm our guidance for the financial year. We expect group net result to be within a range of EUR 430 million to EUR 480 million. This is under the assumption of a stable regulatory and energy policy environment. Based on our massive investment program of around EUR 1 billion per year, we aim for an organic growth of results over the next years. I therefore reiterate our financial ambition for 2030. EBITDA will range between EUR 1.1 billion and EUR 1.2 billion. Based on EBITDA of EUR 900 million in the last financial year. This implies an annual growth rate of 8% per annum.

Ladies and gentlemen, that's the end of our presentation, and we are looking forward to answering your questions.

[Operator Instructions]

The questions are incoming. The first one is from Emanuele Oggioni, Kepler Cheuvreux.

The first one is on the '26 guidance. You mentioned already by segment, by business unit, the confirmation or the improvement for the Energy segment, for example, the outlook compared with what provided for in December. My question is about the H2 moving parts, considering that apparently, the compared with the at least the EBITDA guidance seems a bit conservative after a good set of results in Q2 and so in H1 -- and apparently, if we assume an EBITDA stable, almost stable year-on-year, the weight of the H1 EBITDA in this fiscal year is above 60% compared with lower numbers, for example, in 56% was last year and also it's true that there is a seasonality skewed in H1, which follows H1 compared with H2. But in any case, it seems a bit more prudent as a guidance. So I simply ask what are the moving parts and probably the negative moving parts affecting H2, which will decrease the growth compared with H1? This is the first question.

And the second question is an update on the regulatory framework in Austria, in particular, we know that there is a price cap in place since a few years -- for 4 years and until 2030. But my question is if there is -- you feel the risk that there is something could happen further additionally in terms of, I don't know, a special tax on utilities or something else that could happen could affect the profitability of your company?

Thanks, Emanuele. Good to hear you. Thank you also for your analysis. I will tackle your first question, which was included with your analysis of the outlook being too conservative. As you know, in our business, there is a clear seasonal bias with significantly higher energy demand during our winter half year. Consequently, especially our fourth quarter results always differ from those of the rest of the year and also as a consequence, the EBITDA developments. In view of the below average hydro conditions in the first 6 months, we also amended planning assumptions for the rest of the year. Think that are the main drivers.

In terms of your second question to further implications, I would say we know that the electricity law was issued. And I think we also discussed the implications, and we are not aware of further result impact as the legislation to the discussions is still missing.

The next question is from Peter Crampton, Barclays.

Peter Crampton here from Barclays. My first one was relating to this financial year. There seem to be quite a lot of positive one-offs. Can you quantify kind of the total one-offs? And then kind of looking at your guidance for the full year, did you ever assume these one-offs in the guidance? Or is it kind of sensible to assume that at one point, you update the guidance for this?

And then the second question relates to your Capital Markets Day on the 1st of October. Maybe very briefly what to kind of expect? Is it simply kind of an update on 2030 targets or maybe even a more longer-term guidance?

Peter, thanks for your questions. I think the total one-offs revolve around 2 incidents; the acquisition of a fiber infrastructure company with a badwill of EUR 10 million and the deconsolidation effects of the sale of the international project business to STRABAG of EUR 32.5 million. These are the positive one-offs, but please also bear in mind that we already provided also in Q1 around EUR 13 million for the social tariffs, which came with the new electricity law. So having said that, our guidance is as we communicated that, and we don't foresee any update to that.

Second question, Peter, on the Capital Markets Day, I think we will update on the targets for 2030, and there will be also some other updates on trends, developments, also discussions within the EVN Group on what is our investment portfolio in the future and also a view on electricity market.

The next question is from Patrick Steiner, ODDO BHF.

Patrick Steiner, ODDO BHF. Three questions from my side. Firstly, in the Renewables Generation segment, how should we think about, firstly, volume development in terms of new capacities added, but also with regards to seasonality? And second, about the pricing development for the rest of the year? That would be the first one. Second question, could you maybe walk us through what you believe to be the potential implications from the Iran war by segment from Q3 onwards? And the third question would be on the drinking water business. You mentioned the EUR 15 million EBITDA contribution from drinking water. I looked it up in my model and between '17, '18, '19, you already had EUR 15 million of contribution. Was there no significant earnings growth over the years?

Patrick, thanks for your questions. I will tackle the wind and hydro conditions first. The decline in EBITDA of our own renewable generation in Austria was about EUR 18 million. Thereof, EUR 1 million were volume effects. The rest are really price effects. The price effect may seem high, but please bear in mind that we are comparing to the period October '24 to March '25. Based on our pre-running hedging strategy of 12 to 18 months, this means that we started to hedge the previous half year 1 back in '23. At that time, forward prices were still at substantially higher levels. I hope that answers the question.

I will then hop to the second question, which is the Iran topic. I confirm basically the full year guidance for the '25-'26 financial year. The guidance has been reviewed and carefully assessed after the first 6 months of the financial year. Any impacts known so far are, therefore, already reflected in our outlook. Please bear in mind that EVN has a diversified business model that means that volatility in energy prices can have contrasting effects in, for example, generation versus supply. The other aspect I see is that we have a pre-running hedging strategy for both marketing of our own generation and procurement. I guess and I'm convinced that adds stability to our outlook.

Last but not least, your question to the drinking water, the EUR 15 million mark, that's about 2% contribution to the group EBITDA. That's very stable. And we have continued high investment and also maintenance for that segment.

Okay. Maybe on the second question, should we expect -- I mean, the last time when energy prices went up quite significantly in '22, we experienced some kind of cost overruns in the energy business. Afterwards, you've restructured contracts and you've done lots of constructive work. Should we now expect a negative effect again in energy? Or should this be less severe relatively? And secondly, maybe on generation, we should see positive effects probably going forward for the next 2, 3 quarters, right?

Thanks, Patrick. I think I would start with the situation now is not comparable with the situation in '22. So that's why I come back to the guidance I confirmed, and we don't see any other impacts at the moment.

At the moment, there are no more questions in the queue. [Operator Instructions] But everything seems to be quite clear. No more questions in coming. Perfect. Thank you very much, ladies and gentlemen. With that, I'm closing the Q&A session and handing the floor back to the host.

Thank you, and thanks for joining today's conference call. We will publish the results for the first half of the current financial year on Thursday, 27th of August. And please save the date for our Capital Markets Day, which will be held on the 1st of October in London. Goodbye, and have a great day.

Good morning, ladies and gentlemen, and welcome to EVN's Conference Call for the First Quarter 2025-'26 Financial year. [Operator Instructions]

Let me now turn the floor over to Alexandra Wittmann.

Good morning, everybody, to EVN's conference call on the results for the first quarter of our current financial year. At first glance, today's results are fully in line with expectations, but they also show how important EVN's diversification is. Our diversified business model helped to offset challenges caused by difficult framework conditions. Our Generation segment suffered from below average wind and hydro conditions. Price levels for the marketing of own production also declined year-on-year. The contributions from the equity consolidated companies, RAG and Burgenland Energie were also lower. RAG's results returned to a normalized level after last year's exceptional performance. These negative developments were contrasted by above all, a substantially better performance of the Network segment, which reflects the organic growth from growing investments into the electricity grid.

The implementation of our CapEx program is in full swing. I confirm that we are committed to invest about EUR 1 billion per annum until 2030. We are also well on track to reach our expansion targets as is evidenced by the progress made during Q1. As of end December, total wind capacity increased to 561 megawatt installed capacity. Our 2030 target is 770 megawatts. PV increased to 133 megawatts peak. Here, the target is 300 megawatts. And our battery storage is currently at 12 megawatts and shall increase to 300 megawatts by the end of the decade. We just completed the procurement for a 70-megawatt battery storage facility, which we aim to commission by year-end '27 and we then operate for flexibility management with our own in-house software.

Concerning the WTE sale, I can confirm you that we made good progress on obtaining all necessary approvals and documents required for the closing of the sale of the international project business. We, therefore, expect closing soon. This means during the next 1 to 2 weeks. As already mentioned in December, we changed our segment structure in the beginning of this financial year. Starting with the financial year '25-'26, the Environment segment no longer exists. Until closing of the sale, the discontinued operations are subject to IFRS 5 disclosure and are included in all other segments. Our Austrian drinking water supply business, which concerns pipeline infrastructure has been assigned to the Network segment. It accounts for 1.6% of group EBITDA.

Today, in about an hour, the Annual General Meeting for the previous financial year will take place. As you know, we will propose to the AGM the payment of a dividend of EUR 0.90 per share. Ex-dividend date is the 2nd of March and dividend payment date is the 5th of March.

On the next slide, I will take you through the main financial developments in the reporting period. Revenue rose by 3.3% year-on-year to EUR 831 million. The main reasons were positive regulatory price effects from the network companies in Lower Austria and Bulgaria. In contrast, there was a drop in revenue from renewable generation due to price and volume effect. In addition, the reserve capacity contract for the Theiss gas-fired power plant with the Austrian transmission grid operation, APG, was not extended. Last year, other operating income included the insurance compensation payments related to the flood damages. This year, there is a positive effect of EUR 10 million from the badwill associated with the acquisition of a fiber infrastructure company. This acquisition will further strengthen our Internet and telecommunication business.

The cost of electricity purchases from third parties and primary energy expenses increased due to higher upstream network costs and higher procurement costs in the heating business. This increase was contrasted by lower procurement costs and reduced quantities of natural gas. The cost of materials and services declined as last year was impacted by slot-related repair costs. The rise in personnel expenses reflects the increase in workforce and adjustments according to the collective bargaining agreements. Other operating expenses rose due to an increase in receivables write-offs. The share of results from equity accounted investees dropped by about half, mainly due to the declines at RAG and Burgenland Energie that I already mentioned.

The further improvement in EVN KG's supply business was dampened by a new provision for the social tariff required under Austria's new electricity law. In total, group EBITDA was down by 2% year-on-year to EUR 247 million. Scheduled depreciation and amortization increased by 8%, reflecting our high investment program. Group's EBIT declined by 8% and totaled EUR 153 million. Financial results improved to minus EUR 11 million. The reversal of a tax provision, which was made after the termination of a tax audit led to a positive tax effect. In total, we generated a group net result of EUR 127 million in the reporting period, which represents an increase by 10%.

Now let's move on to the next slide, which provides information regarding the group's balance sheet structure. As of the end of December, EVN's net debt increased to EUR 1.3 billion with a gearing of 19.7%. This comes mainly from effects at quarter end due to higher energy bill receivables during the heating season. Our financial flexibility remains secure and solid. EVN holds contractually committed undrawn credit lines in the amount of EUR 770 million.

Now on the next slide, I will walk you through the developments in our segments. For the Energy segment, please keep in mind that last year, we had a positive one-off in our heating business. Against this backdrop, there are 3 main developments in this segment. Number one, the operating results of our heating business were on the same level as in the previous year. The decline is due to the absence of the positive one-off. Number two, the decline could not be offset by the marketing of own generation as both volumes and prices were lower. And last, and our equity consolidated supply company, EVN KG was expected to continue its positive trend from last year, but the upside was dampened by the provision for the new social tariff for vulnerable customers in Austria. The provision was roughly EUR 12 million. Still EVN KG's EBITDA contribution was EUR 7.2 million. Together, these developments led to an EBITDA of EUR 45 million compared to EUR 51 million in the previous year. EBIT came in at EUR 37 million.

Now let's move on to our Generation segment. Electricity generation volumes in this segment declined by 13% year-on-year, mainly due to lower wind and water flows in Austria. Combined with declining market prices, this led to lower revenue and earnings from electricity generation. The new wind parks and repowerings commissioned over the past year could not fully offset these price and volume effects. Thermal generation volumes declined too as the contract for the supply of reserve capacity from the Theiss power plant ended in September '25 and was not renewed by APG. We will keep the Theiss plant operational for the time being, but it is not producing for the market either. We plan to apply again for the upcoming period starting on 1st October.

Our equity accounted investee, Verbund Innkraftwerke contributed lower earnings compared to the previous year due to weaker water flows and lower market prices. In total, the segment EBITDA was down by half and stood at EUR 26 million. EBIT amounted to EUR 14 million.

Next is the Network segment. The Network segment comprises the regulatory -- regulated electricity and gas distribution business in Lower Austria, the Internet and telecommunication business in our domestic supply area. As of this financial year, the segment also includes the drinking water business in Lower Austria. It is an unregulated infrastructure business, which we see organic growth over the coming years. The Internet and Telecommunications business acquired a fiber infrastructure company in Q1. The acquisition had a positive effect of EUR 10 million in the P&L related to a badwill. Apart from these factors, segment results are reflecting the ongoing high investments in the network infrastructure and related RAB growth.

Due to the higher tariff, EBITDA was up at EUR 127 million and EBIT totaled EUR 77 million. All in all, a solid first quarter of our regulated business. In line with our Strategy 2030 and our CapEx plan, investments in the electricity grid will remain high and will support further RAB growth. In recent meetings with investors and the sell side, we received many questions regarding details of our grid investments. Therefore, I would like to share the following slide with you.

Until 2030, we will invest up to EUR 470 million annually into our electricity network infrastructure. The split is as follows: based on total grid investments until 2030, 65% will be invested in substations, 20% in the low and medium voltage grid, 5% in high voltage, which means 110 kV and about 10% in transformer stations. Or in other words, each year, we will install 1,000 kilometers of medium and low-voltage cables, and we will construct 700 new transformer stations. Until 2034, we will newly construct or expand about 55 substations. All these investments are required to increase our network capacity in order to be able to integrate the growing and volatile renewable generation from wind and PV.

Finally, let's move on to the Southeast Europe segment. This segment had a strong Q1. This was supported by, among others, positive regulatory effects in the Bulgarian Grid business as well as higher energy demand in North Macedonia due to colder weather. Segment EBITDA was up by EUR 8 million and reached EUR 39 million. Segment EBIT was EUR 15 million in Q1. As in Lower Austria, we also started constructing large battery storage facilities that are co-located with large PV plants. Around 1/3 of our 300-megawatt battery storage target for 2030 will be built in Bulgaria and North Macedonia.

Let me now continue with the development of our group cash flows. Gross cash flow rose by 9.5% year-on-year to EUR 181 million. The main reason was the lower correction of noncash earnings components. Cash flow from operating activities totaled minus EUR 51 million and was influenced by a seasonal increase in short-term receivables. Cash flow from investing activities amounted to EUR 36 million and reflected a substantial increase in investment and a reduction of investments in cash funds. The cash flow from financing activities was minus EUR 6.4 million and included scheduled repayment. In the previous year, a new bank loan of EUR 50 million had been closed. The net change in cash and cash equivalents amounted to minus EUR 21 million.

Finally, let's come now to the outlook for this current financial year. I confirm our guidance for this financial year. We expect group net results to be within a range of EUR 430 million to EUR 480 million. This is under the assumption of a stable regulatory and energy policy environment. Based on our massive investment program of around EUR 1 billion per year, we aim for an organic growth of results over the next years. I therefore reiterate our financial ambition for 2030. EBITDA will range between EUR 1.1 billion and EUR 1.2 billion. Based on EBITDA of EUR 900 million in the last financial year, this implies an annual growth rate of 8% per annum.

That's the end of our presentation, and we are looking forward to answering your questions.

[Operator Instructions]

The first question comes from Patrick Steiner from ODDO.

Patrick speaking. I have 3, if I may. Firstly, on the battery storage business, I mean, you're planning to go from 12 to 300 megawatts by 2030. Could you speak a bit about fundamentals, CapEx and expected earnings and cash flows? That was the first one. Second one is on Theiss after the contract with APG was -- is ending basically, what are the long-term plans on the Theiss power plant? And the third one is if you could give us a bit more color on the impact of the social tariff for vulnerable customers in Austria.

Thank you, Patrick. I will start with Theiss question. First of all, Theiss power plant is or has been fully written off. So when APG didn't extend the contract for reserve capacity last summer, we decided to keep the plant ready for operation for the time being, but without any specific plans to use it for actual generation. Based on this decision, we were able to reduce OpEx to a minimum. And remember, Theiss is an energy hub. So we also have PV as well as heat and electricity generation from biomass and steam. So we will build a large battery storage facility there. This means that we need our employees there for other tasks. So with this, we can also reduce potential impacts from personnel costs. And we also plan to apply again for a reserve capacity contract, I think, by October 1.

So then the second question was about the battery, right? So the battery, the 70-megawatt battery will be installed in Theiss, yes. And it's a CapEx volume of around EUR 50 million. And your third question was...

The purchase was up. The third question was on the impact of the social tariff for [indiscernible] customers in Austria.

Yes. I touched this briefly. The social tariff is about EUR 12 million, and it's reflected in the full year guidance already.

And the next question comes from Emanuele Oggioni from Kepler.

The first one is on the cash flow. We know that usually in Q1, there is a seasonal negative cash flow, but I wonder if this is fully in line with your expectation for the year? And what is your guidance for the net debt at the end of this '26 fiscal year? This is the first question.

And the second question is a question about the expectation of the change in the market design in Europe. The starting point was the move of the Italian government in its energy bill draft law, but also other for example, German Prime Minister or other countries, et cetera, are pushing for stripping out the ETS CO2 allowances to the price of -- in the formulation of the price of the energy. So this means structurally a lower power price in the coming years, even lower than expected and already included in the backwardation of the forward cars. So what is your opinion on that is feasible or not? And what could you remind us the sensitivity of for each EUR 10 per megawatt hour change in the price of the electricity, which is the impact on your P&L, obviously, before -- without considering the hedging?

Thanks for the question, Emanuele. I will start with the cash flow and the net debt question. I maybe repeat myself. So for Q1, it's really traditionally low because of the cooler weather conditions and hence, also the receivable situation mainly in the grid company increases. So that's not something unusual. We expect a cash flow of around EUR 900 million for the full year. And also on the net debt, it's now EUR 1.3 billion and will be stable this year as we have the impact of the sale of our international project business. Other than that, as we discussed also in Frankfurt, after those years, the net debt will increase by roughly up to EUR 200 million per year. So nothing has changed there.

Then your question on the political market, you were referring to mainly CO2 and they're pushing out of the target from 2030 to 2040. I think it will affect in the supply, but also positive in generation due to the higher power prices.

Does that cover your question?

Okay.

And the next question comes from Peter Crampton from Barclays.

Peter Crampton here from Barclays. It was mainly a bit of kind of an update from EVN. We've had a few European utilities talk about this data center kind of optionality and kind of flagging that they sometimes are in talks for kind of utility sites around potential kind of data center projects. And I was just wondering, given some of the land you own and big presence in Lower Austria, whether there have been any such talks and maybe a little bit of a debate around numbers and expectations.

Thanks, Peter. And yes, there are talks around data centers. I think at the moment, the province of Lower Austria is also working on a zoning concept, and we are also in talks of -- we are participating this zoning discussions. We give views on where could be a good location for a data center, which ideally is close to an energy hub like, for example, Theiss, but also [indiscernible]. We have, at the moment, I think, 8 to 10 proactive inquiries for data centers. We treat them of the first come first serve priority and with a down payment for the grid access. And then we -- so we have it fixed in our grid expansion plans. And depending on if the inquirers get the land and the certification and everything, we will proceed with granting the grid access.

Does that answer your question? Or did I miss something?

No, I think that's a good answer and obviously highlights the opportunity.

At the moment, we have no further questions. [Operator Instructions] Thank you very much. And I would like to hand over to Alexandra Wittmann one more time.

Thank you, and thanks for joining today's conference call. We will publish the results for the first half of the current financial year on Wednesday, 28th of May. And please save the date for our Capital Markets Day, which will be held on the 1st of October in London. Hope to see you all. Goodbye, and have a great day.

Thank you very much for participating in the conference call. This concludes the call.

Good morning, ladies and gentlemen, and welcome to EVN's conference call for the results of the 2024, 2025 financial year. [Operator Instructions] The floor will be open for questions following the presentation. Let me now turn the floor over to Alexandra Wittmann.

Good morning, everybody, to EVN's conference call on the results for our '24, '25 financial year. I would like to structure my presentation today into 2 major parts. In the first half, I will, as always, present the key development of our last financial year on both group and segment level. As you will see, the development was very much in line with our report after 3 quarters. Since most of you follow us closely throughout the year, I intend to keep this section a bit shorter than usual.

The second part, however, will include some important new information for the capital markets. Specifically, we are updating our dividend policy until 2030. And I will share our new EBITDA ambition for 2030, including a transparent segment breakdown. But let me first start with the highlights of the '24, '25 financial year. The energy sector environment for power generation has been challenging, especially due to weak wind and water conditions as well as lower market prices. In contrast, temperature-related energy demand improved due to cooler weather, especially in Austria and Bulgaria.

We achieved the intended turnaround in our energy supply business, still, there is upside for further improvement, which we are working on now. EBIT in Southeast Europe, again, came out better than expected and despite the forecasted offset of positive past earnings in accordance with the regulatory methodology. To conclude, financial performance has been solid. While EBIT increased by 21%, group net result was down by 7%, primarily due to lower financial results resulting from Verbund's reduced dividend payout for '24.

With group net results of EUR 436.7 million, we achieved a result in the upper range of our full year guidance. Last year was the first year of EVN's new Executive Board, therefore, CEO, Stefan Szyszkowitz; CTO, Stefan Stallinger, and I decided to work together with the whole management team on reviewing and updating EVN's Strategy 2030. We will continue to fully capitalize on the opportunities created by the energy transition. For EVN, these opportunities offer substantial potential for organic growth. I confirm our ambitious investment program.

We plan to invest around EUR 1 billion per year until 2030. In line with this, during the last financial year, EVN invested more than EUR 900 million for the first time in its history. The key investment areas remain unchanged, with about 80% of our CapEx allocated to Lower Austria in Networks, renewable generation, e-charging, infrastructure and drinking water supplies. In the second section of the call, I will share further details of our strategy update with you, which also includes a refined capital market strategy. In June, we also achieved the next important milestone in our plan to divest the international project business.

Together with STRABAG, we finalized the transaction contracts for the sale of WTE Group and signed the share purchase agreement. This was based on the key terms for the transaction, which were agreed upon already in last December. We are working on the fulfillment of the conditions precedent required for the closing of the transaction. Closing is expected during the first quarter of '26. In view of the sale of international project business, we have also changed EVN's segment structure, starting with the financial year '25, '26, the Environment segment does no longer exist.

Until closing of the sale, the discontinued operations are subject to IFRS 5 disclosure and will be included in all other segments. Our Austrian drinking water supply business has been assigned to the Network segment. It accounts for 1.6% of group EBITDA and is mainly pipeline infrastructure business.

On the next slide, I will take you through the main financial developments in the reporting period. Due to IFRS 5 disclosure of the international project business in the '24, '25 financial year, all P&L items for the previous year have been restated to reflect the IFRS 5 disclosure. Revenue rose by 3.8% year-on-year to EUR 3 billion, the main reasons were positive volume and price effects from all 3 network companies as well as from our supply companies in Bulgaria and North Macedonia.

Colder temperatures during the winter months led to higher revenues at EVN Wärme. In contrast, there was a drop in revenue from renewable generation and natural gas trading, mainly due to lower prices and volumes. The increase in other operating income was due to insurance compensation we received to cover damages, which were caused by the floods in Lower Austria during September '24. The cost of electricity purchases from third parties and primary energy expenses increased due to higher procurement cost in the regulated energy supply business in Southeast Europe.

This increase was contrasted by lower procurement costs and reduced quantities of natural gas. The cost of materials and services were up due to the repair cost for the flood damages, which as already mentioned before, are largely covered by insurance. The rise in personnel expenses reflects the increase in workforce and adjustments according to the collective bargaining agreement. Other operating expenses declined.

In the previous year, we had 2 one-offs being the impairment loss on receivables in the international project business, and the energy crisis contribution for electricity. The share of results from equity accounted investees improved substantially. That resulted, particularly from the normalization of results in the end customer business of EVN KG. A higher contribution from RAG was contrasted by declines at Burgenland Energie as well as the hydro power plant stakes in Verbund Innkraftwerke and Ashta.

In total, group EBITDA rose by 19% year-on-year and amounted to EUR 909 million. Scheduled depreciation and amortization increased by 8%, reflecting our high investment program. In addition, we had impairment losses of EUR 58 million, which were primarily related to flood damages in September 24.

Group's EBIT was up by 21% and totaled EUR 491 million. Financial results fell substantially from EUR 146 million to EUR 84 million. This decline resulted from the lower dividend paid out by Verbund for their '24 financial year. In total, we generated a group net result of EUR 437 million in the reporting period, which represents a decline by 7%.

Now let's move on to the next slide, which provides information regarding the group's balance sheet structure. As of the end of September, EVN's net debt amounted to EUR 1.2 billion and was a moderate EUR 27 million higher than the level as of end of September '24. Bearing in mind the substantial step-up in investments. Correspondingly, gearing ratio stood at 17.3%. Our indebtedness is increasing in line with our higher investment program, but until now, the level of debt has risen at a slower pace than initially forecasted due to our strong cash flow.

Our financial flexibility remains secured and solid. EVN holds contractually committed undrawn credit lines in the amount of EUR 770 million. On the next slide, I will walk you through the development in our segments. As mentioned earlier, I will go through them more quickly than usual since most of the developments reflect the first 9 months, and I will provide an outlook for each segment for the current financial year. The development in the Energy segment mainly reflects 3 factors: the recovery of our equity consolidated supply company, EVN KG, price and volume effects in the marketing of our own electricity generation and a positive one-off effect in the heating business.

Together, these developments led to a significantly better EBITDA of EUR 81 million compared to minus EUR 60 million in the previous year. EBIT came in at EUR 58 million. As for the segment outlook, we expect that the recovery achieved in the supply business will continue in the '25, '26 financial year. Segment EBIT should therefore equal or slightly exceed the previous year.

Let's turn to our Generation segment. electricity generation volumes in this segment declined by 8% year-on-year, mainly due to lower wind and water flows in Austria, combined with declining market prices, this led to lower revenue and earnings from electricity generation. Thermal generation volumes increased due to higher demand by the Austrian network transmission operator for network stabilization. However, the contract for the supply of reserve capacity from the Theiss power plant ended in September '25 and was not renewed by APG.

We will keep the Theiss plant operational for the time being, but it is not producing for the market either. The Generation segment also reflects the impact of flood damage in September '24, on the one hand, we received insurance compensation reported as other operating income. On the other hand, this was contrasted by repair costs and impairment loss. Our equity accounted investees Verbund Innkraftwerke contributed lower earnings compared to the previous year due to weaker water flows and lower market prices. In addition, the absence of a revaluation of the Ashta hydropower had a further negative effect on results from equity accounted investees.

In total, the segment generated EBITDA of EUR 201 million and EBIT of EUR 92 million. As predicted, these results reflect a decline compared to the previous financial year. In our outlook for the Generation segment, we expect a decline in EBITDA, which was positively influenced in '24, '25 by the insurance compensation payment, under normal average market conditions, generation typically accounts for 15% to 20% of our group EBITDA.

Next is the Network segment. The Network segment delivered a strong performance, supported by positive temperature-driven volume effect and higher tariffs. Another positive factor was the increase in RAB driven by ongoing high investments. Operating expenses also rose due to higher upstream network costs for electricity. Overall, EBITDA was up at EUR 351 million, and EBIT totaled EUR 164 million. In our segment outlook, I want to emphasize that earnings development is strongly influenced by the Austrian regulatory methodology.

Based on our continued high investments and the higher tariffs already announced by E-Control, we expect another increase in EBIT.

Finally, let's move on to the Southeast Europe segment. The financial performance of our activities in Bulgaria, North Macedonia and Croatia once again exceeded expectations. Based on our forecast, we anticipated EBIT of around EUR 60 million, which was the lower end of our midterm range. This guidance reflected the regulatory methodology, which offsets positive earnings effect from previous years in Southeast Europe.

Segment EBIT reached EUR 88 million, this was driven by positive volume and price effects. For the '25, '26 financial year, we believe EBITDA and EBIT to reflect the level of the previous year. I will skip the Environment segment, which due to the IFRS disclosure of the international project business was limited to the Austrian drinking water business and a few international activities which are not included in the sale of WTE.

As already mentioned earlier, the Environment segment will no longer exist as of this financial year. So let me now continue with the development of our group cash flows. Gross cash flow was 6.5% lower year-on-year at EUR 919 million. The main reasons were the correction of noncash earnings components and the lower dividend from Verbund. Cash flow from operating activities totaled EUR 935 million, which was influenced by the changed liquidity settlement with EVN KG compared to last year, which resulted in higher liabilities and a reduction in the capital commitment for our supply company, EVN KG. Cash flow from investing activities amounted to minus EUR 779 million and reflected a substantial increase in investments.

In addition, investments were again made in cash funds. The position cash flow from financing activities was minus EUR 100 million and included scheduled repayments the dividend payment for the last financial year and new noncurrent financial liabilities. The net change in cash and cash equivalents amounted to EUR 57 million.

In the second part of today's call, I would like to share more details on our strategy update now, focusing in particular on our revised capital market strategy which includes an updated dividend policy. First, I would like to outline the cornerstones of our revised strategy 2030. On the slide, you can see a split of our investment plan. The major portion of investments will need to be directed towards the lower Austrian electricity networks infrastructure in order to enable the energy transition.

This comes for the benefit of a massive growth in our RAG. As we remain committed to our CapEx program with annual investments of around EUR 1 billion, we confirm our plans to further grow our renewable generation fleet. We are currently working on several new wind and solar projects, which will bring us another step closer to achieving our 2030 expansion targets, 770 megawatts for wind and 300-megawatt peak for photovoltaics. We also made substantial progress during the last financial year, following the commissioning of new wind and photovoltaic parks, our installed renewable capacity has increased to 980 megawatts.

Thereof, wind capacity accounted for 532 megawatts and photovoltaic capacity is also impressive at 120-megawatt peak. By 2030, our installed total renewable capacity is planned to exceed 1,400 megawatts. This will increase our average annual electricity generation by 30%, reaching then 3.8 terawatt hours. As part of our strategy update, we defined large battery storage as an additional investment focus. Our plan is to install a total battery storage capacity of 300 megawatts by 2030.

Roughly 200 megawatts of this will be installed at existing power plant locations in Lower Austria, but we also plan to combine photovoltaic parts with battery storage in Bulgaria and North Macedonia. The rationale for investing in batteries is to change and optimize the marketing of our renewable electricity generation. When too much electricity is produced on sunny or windy days, we store the surplus in the batteries. A few hours later, when demand picks up, we sell the electricity and that allows us to achieve better prices.

By the way, the software which we use for optimizing the energy flows was developed by CyberGrid, an EVN group company. Battery storage also brings valuable benefits for the networks. Flexibility management helps to reduce the overall load on the network infrastructure. Transport peaks are balanced out, bottlenecks are avoided and the entire system becomes much more stable. Flexibility management, the operation of volatile loads and data management in the distribution grid are just a few examples of tasks, which also require the intensified application of digitalization and artificial intelligence.

Therefore, we have defined those as a key priority in our strategy 2030, but we will also work on solutions which will use AI to simplify customer relations and service processes. All this will contribute to making our group more productive and cost efficient. Alongside the strategy update, my goal was also to further develop our capital market strategy.

So now let's move on to that topic next. As you know, up to now, we had a dividend policy with a minimum dividend of EUR 0.82 per share combined with the commitment from the Board to allow shareholders to participate in future earnings growth. After careful consideration of our CapEx program, financial projections and the current risks and uncertainties in our industry alongside our ambition to maintain A category ratings while providing a clear and attractive dividend policy, the Executive Board and Supervisory Board took the following decisions.

We will produce -- propose to the next AGM a dividend of EUR 0.90 per share for the '24, '25 financial year. This represents a 10% increase compared to our previous minimum dividend of EUR 0.82 per share. Furthermore, we are adjusting our dividend policy after only 2 years. Our new policy sets a minimum dividend of EUR 0.90 per share and expresses our intention to increase the dividend to at least EUR 1.10 per share by the '29, '30 financial year, reaching a payout ratio of roughly 40% by then. With this new dividend policy, we are making a strong commitment. Shareholders can expect growing dividends over the next 5 years.

Given the external uncertainties affecting our business, the new policy leaves some flexibility in how this dividend growth will be implemented over time with a clear target level to be reached over 5 years. Another new pillar of our capital market strategy is the updated long-term financial ambition for 2030 which replaces the indications we provided at the Capital Markets Day 2023 and last year's investor webcast. Our new financial ambition is based on the successful implementation of our CapEx program. This will enable us to deliver on our expansion targets in renewable generation, battery storage and RAB growth.

In addition, we expect stable development of our activities in Southeast Europe. Based on our organic growth plans and a stable foreseeable energy market environment, our financial ambition for 2030 assumes will range between EUR 1.1 billion and EUR 1.2 billion. To put this into perspective, compared to the EBITDA of EUR 909 million we are reporting today -- this translates into a compound annual growth rate of roughly 8% over the next 5 years.

In a normalized year and assuming average conditions in the energy sector, our EBITDA will be split across segments in 2030 as follows: around 10% from the Energy segment, 15% to 20% from Generation, about 45% from the Austrian Networks segment, 15% to 20% from Southeast Europe, leaving around 10% to all other segments, which are primarily the contributions from RAG and Burgenland Energie. The dividend from Verbund are, as you know, not included in EBITDA but are reported in our financial results only.

We have also prepared a new fact sheet that focuses on these key messages and is designed to help analysts and portfolio managers better understand our equity story and growth drivers. With this, I come to the last slide of my presentation, which includes a summary of the key messages of our strategy and equity story.

In a nutshell, our key message is this: EVN has a clear strategy to capture the opportunities offered by the energy transition. Based on this strategy, we are pursuing an ambitious CapEx program that will drive organic growth. Our promise is to deliver on these investments, supported by secured projects and procurement, combined with our proven track record.

These projects are profitable and will support further growth driven by a group target ROCE that must exceed 6% on average at group level. We remain committed to maintaining strong credit ratings in the A category. This is essential because we need flexible access to debt at attractive terms to finance our projects.

EVN's equity story brings together the following strengths: a clear strategy, embracing the opportunities of the energy transition, strong commitment to CapEx supported by a strong balance sheet, a transparent 5-year financial ambition, reflecting EBITDA growth and an updated dividend policy.

Now I would like to conclude my presentation with our outlook for the current '25, '26 financial year. Please note that we haven't even completed the first quarter. Our forecasts are subject to various uncertainties, such as generation coefficient or temperature-related energy demand to name just 2. Any changes to our planning parameters can lead to fluctuations in our results. However, based on our assumptions, we expect EBITDA and group net results to be roughly at the prior year level. Our guidance for group net result is in the range of approximately EUR 430 million to EUR 480 million.

Before we start today's Q&A, I'd like to inform you that we will again be hosting a Capital Markets Day next year. It will take place on the 1st of October '26 in London. Please save the date. We will share further details with you in the course of next year. Well, that's the end of our presentation, and we look very much forward to answering your questions.

Thank you very much. [Operator Instructions] The first questions are already coming in. So the first question is from Patrick Steiner of ODDO BHF.

Patrick Steiner, ODDO BHF. Congrats on the good results. A few questions from my side. If I may, I'll take them one by one to make it easier. First question, is the '29 ,'30 net result target of EUR 450 million still intact? And if yes, could you provide just a bridge between the '25, '26 net reserve guidance of EUR 430 million to EUR 480 million and the '29 to '30 target of only EUR 450 million despite the strong CapEx deployment over the next 3 to 5 years?

Patrick, just to answer the question to -- your first question was if the guidance for '29, 2030 is still intact? The answer is yes. And the second question was, can you repeat it again?

Yes. The second question was basically, if you could provide us with some kind of bridge between '25, '26 and 29, '30, and why you don't see any significant growth over this kind of 4-year time period?

I think we see the EBITDA growth. We have an EBITDA ambition until 2030, it is a compound annual growth of 8%, and we have various EBITDA margins ambitions until 2030. For example, the Network's ambition is by 45% as an EBITDA margin followed by Southeast Europe and the Generation segment. We are ranging 15% to 20% EBITDA margin. and the energy segment and the -- all other segments around 10%. So if you look at this year of the EUR 900 million -- roughly EUR 900 million EBITDA and the outlook is EUR 1.2 billion EBITDA. I would call that a growth.

Okay. So I should expect basically that this bit for more flattish development over the next few years on the bottom line, is this attributable to basically a higher financial result and higher depreciations due to the increased investments, right?

Correct.

Okay. Second question. You've outlined the new '25, '26 guidance at EUR 430 million to EUR 480 million basically with this year's results as the floor for the next year. Can you please elaborate what are the growth factors in that result this year compared to '24, '25? Is the EVN KG and the higher capacities from investment?

Yes, I think the growth is mainly driven by the Generation segment and our Energy segment, as I said, we had the normalization or the turnaround of the KG in this financial year. So in the current financial year, we foresee further improvements and development and the Generation segment at the moment. And I think I tried to draw this picture. We have not even closed the first quarter yet, but we do hope that the wind and water generation is better than the previous year, plus we also add more capacity for wind and solar also during the year of '25, '26. So the growth is mainly driven by those 2 segments.

Okay. That's very clear. Third question, basically, why was Theiss not renewed by APG? And what does it mean for you earnings-wise?

It was an APG decision. I mean, that I cannot comment on. But earnings wise, it's for us a 0 result.

And the CapEx increase from -- the CapEx target increased from EUR 900 million to EUR 1 billion. What's the main driver? Is this battery storage investments or where does it come from?

That's mainly the Networks investment, right? We still on our, let's say, yearly ambition to invest EUR 1 billion over 50% flow into Networks and then, of course, followed by renewables and also e-mobility.

Okay. Perfect. But I'm not sure if I'm mistaken, but this changed from EUR 900 million to EUR 1 billion, right? Or was there some kind of uptick due to the Networks investment, are you expecting higher Network investments than a few quarters ago?

Yes. We expect higher investment. I think we were around EUR 400 million to EUR 440 million and we will ramp up the Networks investments to EUR 500 million or EUR 550 million.

Okay. It's very clear. Last one from my side. You mentioned EBIT growth in Networks in '25, '26. Could you give us a range of expectations on your side? Where would you arrive on EBIT in Networks?

I think the EBITDA margin, we expect by 2030 is around 45%.

And okay, and in terms of this year, basically, '25, '26, can you give us any kind of range or not?

The range for '25, '26 in terms of EBITDA is around EUR 450 million.

So the next question is from Richard Alderman of BTIG.

Three questions initially from me, if I may. Can you just talk a little bit about the sensitivity in this year's guidance to the hydro coefficient, which I think in the first quarter has remained quite low, is probably around about 0.84, 0.85. Could you -- I mean, if you assume that, that hydro coefficient didn't normalize, could you give us some sort of guidance on the impact on full year.

Maybe talk to it in terms of every 5% below normalized conditions, what would that do in terms of hit to EBITDA or EBIT. And then could you perhaps comment on the main points of last week's Austrian law has passed. I'm interested to understand given that there will be some cap and change on the feed-in tariff for new renewable projects in Austria going forward. How does that reduce your potential returns compared to what you were thinking about when you put this plan together before last Thursday, Friday?

And also, can you just talk on the bottom line impact of the new social tariff and any costs you might have to adjust existing contracts going forward for this idea of passing through material changes in prices every 6 months? Will you have to restructure contracts? Will there be any cost in that? Or will you just effectively adjust contracts going forward and not have to unbundle 1 year and 2-year plans?

Okay. I will start with the price regulation you mentioned, I think to summarize what is impacting us. I think the social tariff, as you mentioned, the impact of the social tariff is a single million-digit impact for us, yes? The EUR 0.5 per megawatt hour feed-in tariff is included in our calculations and all projects are still profitable, yes. So I think -- and then to the point, will the law will regulate profit margins in the event of a crisis, I think it's very clear we are not in a crisis. Prices are very stable.

I'm giving you an example of our tariff called Garant. It's a 12-month contract. And it is declining year-on-year, if I take January '25 to January '26, by 13%. So overall, it's not shaking the boat. Projects are still profitable, social tariff is included within the guidance. And to your question of the hydro power for the year '24, '25, the hydro coefficient was around 85%. And it should also this year be around 80% to maximum 90% but we expect some strong months to come probably in spring.

So just to clarify, your guidance includes an assumption of 80% to 90% hydro coefficient for the full year to September '26?

No, no. So far, we have 80% to 90%.

Okay. But guidance is 100%, normalized hydro by the end of the year?

Exactly.

Okay. And can you give me some idea of that sensitivity if things -- what the impact of a 10% or 5% reduction in hydro coefficient over the whole year would be?

Well, then that depends on the price.

And the next question is from Emanuele Oggioni of Kepler Cheuvreux.

Good morning. Thank you for the presentation. Basically, almost all my questions have been already answered. I have only one about the hedging policy update on '26 and if possible, also an outlook for Europe, updated outlook for embedded also in the targets for until '29, 2030, about -- in the coming years about the power price outlook.

Okay. I'll start with the hedging policy, Emanuele, we have included a 1-year hedge in advance.

And could you share the price level compared with the previous fiscal year?

We do not share this information.

Okay.

Does that answer your question? Or did I miss the second one?

As regards -- no, okay. The second one was on the mid-term outlook of power prices, embedded in the plan.

That is included in our guidance and in our targets.

Okay. But the outlook is to have a cost and flat power prices or declining or in line with the current forward price, what are the underlying assumption, if you can disclose it?

We always base this on our 100% production coefficient.

No, no, at this stage, sorry, I was referring to the whole sales price on the reference market and then translated in your -- after you're hedging in the coming years, what are the assumption over the -- not over volumes. So not over the coefficient, but about the pricing, and the achieved priced.

They're based on our market forward prices.

At the moment, there are no more questions in the line. [Operator Instructions] So no more questions incoming. With that, I'm handing the floor back over to the host. Thank you very much, ladies and gentlemen.

Yes. Well, thanks, everyone, for joining today's conference call. We will publish the results for the first quarter on the 25th of February. Please also a short reminder to our Capital Markets Day in London on the 1st October of '26, hope you put this in your calendars, and I see you in person. Else, I think I wish you all a very happy and merry festive season, and all the best coming into the new year '26. Goodbye.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to EVN's Conference Call for the First 3 Quarters of 2024-2025 Financial Year. [Operator Instructions]

Let me now turn the floor over to Alexandra Wittmann.

Good morning, everybody, to EVN's conference call on the results for the first 3 quarters of our current financial year. In a nutshell, today's results can be summarized as follows: The energy sector environment for power generation has been challenging, especially due to weak wind and water conditions as well as lower market prices.

The normalization of operational results in our energy supply business is proceeding as planned. Financial performance during the first 9 months of the financial year has been solid. While EBIT increased by 18%, group net result is down by 9%, primarily due to lower financial results resulting from Verbund's reduced dividend payout for '24.

Full year financial performance is on track, and we, therefore, confirm our full year guidance. We expect group net results in a range between EUR 400 million and EUR 440 million, subject to a stable regulatory and energy policy environment. We are also on track in realizing our investment program.

CapEx were up by 22% at EUR 535 million during the reporting period. This is in line with our plan to invest annually about EUR 900 million until 2030. The key investment areas remain unchanged. So about 3/4 of our CapEx will be made in Lower Austria in networks, renewable generation, e-charging infrastructure and drinking water supplies.

I would also like to highlight that our CapEx plan is supported by a solid project pipeline. We are, therefore, very confident that we will successfully deliver on our plan, which will further support organic growth, especially in the areas of renewable generation and regulated networks business. We are currently working on several new wind and solar projects, which will bring us another step closer to achieving our 2030 expansion targets, 770 megawatts for wind and 300 megawatts peak for photovoltaics.

In June, we also achieved the next important milestone in our plan to divest the international project business. Together with STRABAG, we finalized the transaction contracts for the sale of WTE Group and signed the share purchase agreement. This was based on the key terms for the transaction, which were agreed upon already in last December. We are now working on the fulfillment of the conditions precedent required for the closing of the transaction. Closing is expected within the next 6 months.

On the next slide, I will take you through the main financial developments in the reporting period. Before I begin, I'd like to remind you that we are reporting the international project business, which we plan to sell to STRABAG in accordance with IFRS 5. Therefore, all P&L items for the previous half year has been restated to reflect the IFRS 5 disclosure.

Revenue rose by 5% year-on-year to EUR 2.4 billion. The main reasons were positive volume and price effects from all 3 network companies as well as from our supply companies in Bulgaria and North Macedonia. Colder temperatures during the winter months led to higher revenue at EVN Wärme.

In contrast, there was a drop in revenue from renewable generation and natural gas trading, mainly due to lower prices and volumes. On top of that, there were also negative impacts year-on-year from the valuation of hedges due to positive effects in the previous year.

The increase in other operating income was due to insurance compensation we received to cover damages, which were caused by the floods in Lower Austria during September 2024. The cost of electricity purchases from third-parties and primary energy expenses increased due to higher procurement costs in the regulated energy supply business in Southeast Europe. This increase was contrasted by lower procurement costs and reduced quantities of natural gas.

The cost of materials and services were up due to the repair cost for the flood damages, which, as already mentioned, are largely covered by insurance. The rising personnel expenses reflects the increase in workforce and adjustments according to the collective bargaining agreements as well.

Other operating expenses declined. In the previous year, we had 2 one-offs being the impairment loss on receivables in the international project business and the energy crisis contribution for electricity. The share of results from equity accounted investees improved substantially. This resulted particularly from the normalization of results at EVN KG. In addition, the contributions from RAG and Burgenland Energie were up 2, however, contrasted by a slight decline at the Verbund Innkraftwerke power plant.

In total, group EBITDA rose by 14% year-on-year and amounted to EUR 714 million. Scheduled depreciation and amortization increased by 7%, reflecting our high investment program. Hence, group's EBIT was up by 18% and totaled EUR 447 million. Financial results fell substantially from EUR 165 million to EUR 94 million. This decline resulted from the lower dividend paid out by Verbund for their 2024 financial year. In total, we generated a group net result of EUR 435 million in the reporting period, which represents a decline by 9%.

Now let's move on to the next slide, which provides information regarding the group's balance sheet structure. As of the end of June, EVN's net debt amounted to EUR 1.1 billion and was slightly below the level as of end of September '24. Correspondingly, gearing ratio stood at 16.6%. Our indebtedness is increasing in line with our higher investment program. Our financial flexibility remains secured and solid. EVN holds contractually committed undrawn credit lines in the amount of EUR 770 million.

On the next slide, I will present the developments of our segments in more detail. I will start with the Energy segment. Energy demand for natural gas and heat increased due to colder temperatures, whereas electricity sales volumes declined year-on-year. Such decline was due to ongoing strong competition and the trend towards growing own photovoltaic generation.

Our equity consolidated supply company, EVN KG, is in charge of the electricity and natural gas sales, whereas the heating business is fully consolidated. Therefore, heating is one of the main drivers for the revenue of the Energy segment. The other main factor for the development of revenue is the marketing of the electricity generated in our renewable power plants.

In the first 9 months, revenue fell year-on-year to EUR 512 million due to volume and price effects in the marketing of our own generation and in natural gas trading as well as reduced earnings effect from the valuation of hedges. In contrast, our heating business benefited from the colder temperatures.

In line with the declining market prices, operating expenses also decreased. For our equity accounted supply company, EVN KG, the expected operational turnaround continued as planned, and it contributed with a slight positive number of EUR 1.5 million. In total, segment EBITDA amounted to EUR 84 million, and EBIT totaled EUR 63 million.

Let us now turn to our Generation segment. Electricity generation volumes in the segment declined by 10% year-on-year due to lower wind and water flows in Austria. Thermal generation volumes increased due to higher demand by the Austrian network transmission operator for network stabilization.

Revenue decreased due to declining market prices and lower generation volumes. The generation segment also contains the effects from lost revenue and repair costs at our thermal waste incineration plant due to the floodings in September '24. Our equity accounted investee, Verbund Innkraftwerke, delivered a lower earnings contribution as compared to the previous year due to weaker water flows. All in all, EBITDA amounted to EUR 113 million. Based on higher scheduled depreciation and amortization because of our investment program, segment EBIT stood at EUR 90 million.

Today, we would also like to further increase our transparency for the generation segment by starting to disclose the hedging ratios for our own generation. According to our hedging policy, we apply a 12- to 18-month rolling forward hedging strategy for our own electricity generation. At the moment, about 2/3 of the electricity generation volumes for the next financial year '25-'26 are hedged.

Let's continue with the Network segment. The colder weather and higher consumption for heat pumps and e-mobility as well as the increased use of thermal power plants for network stabilization led to higher network distribution volumes for electricity and natural gas. In view of the positive volume effects and higher network tariffs for electricity revenue in the segment increased.

Operating expenses also increased due to rising upstream network costs for electricity. In total, EBITDA was up at EUR 277 million. Taking into account higher depreciation and amortization due to the high investment level, EBIT totaled EUR 145 million.

Let's move on to the South East Europe segment. In Bulgaria and North Macedonia, we are reporting today higher electricity network and energy sales volumes. The volume growth was, among others, driven by low temperatures in Bulgaria. Revenue increased to EUR 1.2 billion due to positive volume and price effects. This was contrasted by the offset of positive earnings effects from recent years in Southeast Europe in accordance with the regulatory methodology.

Operating expenses increased in line with higher procurement costs in the regulated energy supply business in Southeast Europe. All in all, EBITDA amounted to EUR 129 million, and segment EBIT totaled EUR 61 million.

And finally, the Environment segment. As already mentioned in the beginning of today's call, we signed the share purchase agreement with STRABAG in June. Right now, we are working on the fulfillment of the various conditions precedent. The closing is expected within the next 6 months. Due to the IFRS 5 disclosure of the discounted -- discontinued operations representing those parts of the international project business, which we will sell to STRABAG, the financials of the Environment segment look different.

In other words, the P&L of the segment only covers the following activities, which are excluded from the planned sales such as our drinking water business in Lower Austria, the equity accounted companies for the projects in Zagreb and Prague, the deconsolidated company for the wastewater treatment plant project in Budva, Montenegro. And finally, the deconsolidation effects from the sludge-fired combined heat and power plants in Moscow, whose sale was closed on 31st October 2024. For the activities to be sold, IFRS 5 disclosure requires us to report results from discontinued operations, which amounted to minus EUR 10 million in the first 3 quarters.

The next slide shows the development of our group cash flows. Gross cash flow was lower year-on-year at EUR 762 million. The main reason was the correction of noncash earnings component. Cash flow from operating activities totaled EUR 627 million. Year-on-year, it was negatively influenced by an increase in trade receivables and a parallel decline in trade payables at balance sheet date, which was reduced by a lower capital commitment for our supply company, EVN KG.

Cash flow from investing activities amounted to minus EUR 499 million and reflected a substantial increase in investments. In addition, investments were again made in cash funds. The positive cash flow from financing activities amounted to minus EUR 110 million and included scheduled repayments, the dividend payment for the last financial year and new noncurrent financial liabilities. The net change in cash and cash equivalents amounted to EUR 18.2 million.

Now let's come to the outlook for this current financial year. I confirm our guidance for this financial year. We expect group net results to be within a range of EUR 400 million to EUR 440 million. This is under the assumption of a stable regulatory and energy policy environment.

When looking at today's results and our full year guidance, it's important to bear in mind that energy demand isn't evenly distributed throughout the year. In other words, there is a clear seasonal bias with significantly higher energy demand during our winter half year. Consequently, especially our fourth quarter results always differ from those of the rest of the year.

Our dividend policy remains unchanged. The dividend will equal at least EUR 0.82 per share. As demonstrated in the past, we want our shareholders to appropriately participate in any additional earnings growth. In the medium term, a payout ratio equaling 40% of group net results adjusted for extraordinary effects is targeted. Our annual investments will amount to EUR 900 million until 2030. The core areas are investments in network infrastructure, renewable generation, e-charging infrastructure and drinking water supplies.

Ladies and gentlemen, that's the end of our presentation, and we look forward to answering your questions.

[Operator Instructions] The first question is from Patrick Steiner of ODDO BHF.

It's Patrick Steiner speaking, ODDO BHF. Three from my side, if I may, I'll take them one by one. First of all, I would be very interested in what were the main drivers of the weaker EBITDA in the Renewable Generation segment in the third quarter compared to last year's period. I mean how big were the effects of pricing versus volume generation of the existing asset base and how large was the effect of new generation assets put into operations?

Okay. I think the questions to that is, the segment E was a drop from EUR 35 million to EUR 21 million due to lower trading results, especially the gas trading. If I may point to segment G Generation, the drop from EUR 47 million to EUR 34 million was due to lower volumes and electricity market prices. In the segment network, the increase from EUR 49 million to EUR 69 million was due to higher network volumes, especially gas and also grid tariff increases.

If I look at segment O, so there is a slight increase from EUR 47 million to EUR 50 million, mainly volume effect, I would say. And last but not least, our segment for the international project business that's almost stable at EUR 4 million. Previous year was EUR 5 million, and this is according to realization of our project.

Okay. That's actually very helpful. Second question would be, given your forward hedging strategy that when it comes to renewable electricity sales, how should we think about the prices, which you have locked in already basically, but materializing in the P&L over the next few quarters, should we expect prices to come down further over the next quarters?

Okay. I think I want to emphasize that our hedging policy is to achieve a hedging ratio of about 80%. And I outlined that at the moment, we have already hedged approximately 2/3 of the plant generation in the next financial year. The reason for not hedging up to 100% is that renewable production, especially wind is very volatile. Therefore, actual production on a particular day could even be 0 in case of no wind. So with stable energy power prices, we expect also revenues to stay stable.

The next question is from Thibault Dujardin of Bernstein Societe Generale.

My first question will be regarding the potential of the windfall tax in Austria. Do you have more visibility on the potential impact? And two, do you have more insight on the potential reduction if you invest in new renewables and what could be the impact? That would be my first question.

Okay. The Federal Act on the energy crisis contribution for electricity was initially put in force for the period from December 1, 2022, to December 31, 2023, and was then extended for 2024. This is just as a reminder for all of us. Now in March 2025, the new Austrian government reenacted the law for the period from April 1, 2025, to March 31, 2030. The new parameters for the calculation of levy on earnings from electricity generation has been tightened as follows. Also as a reminder for us previously, there were EUR 120 per megawatt hour.

Now they are EUR 90 per megawatt hours for existing plants and EUR 100 per megawatt hour for new plants. Any excess earnings are taxed at 95%. Also for us to remember, previously, it was 90%. Deductible for renewable investments, 75% of CapEx with a maximum cap of EUR 72 per megawatt hour. Now the conclusion for us, given the parameters is that the potential effects on EVN for the full year 2024 to 2025 are not clear yet, but our estimate is a low single-digit amount.

So it's already included in the guidance?

Yes.

And just to go back regarding the new renewables, considering the addition of new capacity, what is your expectation in terms of EBITDA generation for next financial year due to the addition of new renewable capacity?

I think the guidance is for the next financial year is a stable EBIT. And it depends on the prices.

[Operator Instructions] The next question is from Emanuele Oggioni of Kepler Cheuvreux.

The first one is on the energy business unit. I wonder if you can disclose the share of fixed price contracts versus floating price contracts? And also the duration of your commercial offer on average for fixed price. In the past, it declined from 1 year to 6 months, if I remember well. And also the outlook for the energy profitability next year after the strong recovery expected for this year?

And the second question is on Southern Eastern Europe. Also in this case, what is the outlook for 2026 considering the ongoing regulatory framework?

Okay. Thanks for the question, Emanuele. To tackle your first one, it's 5% to 60% fixed contract. It's called our Garant, okay?

And in terms of the midterm expectation for the supply business, let me start and let me confirm again that we plan to achieve the turnaround for EVN KG in the current financial year. I can confirm that from an operational point of view, EVN KG is well on track after 9 months. We, therefore, expect that EVN KG will again generate positive operating results in the current '24-'25 financial year. We expect a black 0, so similar than after Q3.

In the midterm, our ambition is that the Austrian supply business should return to generating EBIT margins of 3% to 5%. At last year's investor webcast, we communicated a midterm EBIT range for the Energy segment of EUR 50 million to EUR 60 million. The Energy segment includes the equity consolidated EVN KG, the heating business and the marketing of own generation.

Now I tackle your questions to the outlook of Southeast Europe. The EBIT range is between EUR 60 million to EUR 90 million. And according to the Capital Markets Day info from October, this is still valid.

If I may, as a follow-up, the current year was particularly strong and even better than expected compared with the midterm guidance. So what are the moving parts in next year for this year-on-year decline compared to '24-'25?

Are you now referring to Southeastern Europe or to EVN overall?

Yes, yes, still Southeastern Europe.

I think we have, as outlined, the guidance for Southeastern Europe is between EUR 60 million and EUR 90 million. And the EBIT is at EUR 61 million for the first 3 quarters. Does that answer your question?

Yes, yes.

Next question is from Richard Alderman of BTIG.

Can I just follow up on the process of the windfall tax or the generation price cap offset, you kindly said that you expect the full year contribution to that to be low single digit. Given your CapEx outlook for next year, would you -- assuming all things being equal in the policy continuing as it is, would you assume therefore that next year, you're only paying a modest contribution to that tax?

Yes, same expectation for next year. It's very modest and it's in the area of a low single-digit amount.

Right. Okay. And then just looking at the comments you made around the changes in operating cash flow. Could you just go through the mechanics of that again? You spoke about it quite quickly on the call. I just wanted to understand the moving parts of what was happening. You talked about the increase in trade receivables was contrasted by the lower working capital needs of EVN. I just wonder if you could just put some color on that.

Yes. I think just to recap a little bit, so the gross cash flow was lower year-on-year with EUR 762 million, and the main reason was the correction of noncash earnings component, right? So now to understand the noncash earnings components, which are the correction to the gross cash flow is that we need to correct for the earnings contribution of equity accounted investees and need to add back the dividend payments. Other adjustments referred to, for example, the correction of noncash versus cash items such as interest expenses versus interest payments or interest income versus interest received. And at the same time, we also have working capital changes, which we recognized. We have inflows from international projects, and we have the improved supply business. I think that is -- these are the main colors to the cash flow.

Okay. And then can I just -- obviously, without wishing to draw you down the line of guiding exactly for the full year net result, you're clearly towards the top end of that range at the 9-month level. So I'm just trying to understand how that equates to your messaging around at least EUR 0.82 a share of dividends based on a 40% payout ratio. If I look at the moving parts, you've identified the final windfall tax numbers being very low. Q4 obviously is a summer month. So it will probably, I guess, only contribute a low single-digit number, 0 to sort of low single-digit number to the final outturn.

We know the quantity of the Verbund dividend in this current year for you. So what else is the driving sort of difference between where we are now and where we might outturn in terms of any one-offs? Are you expecting any one-offs that are not yet visible to us, because, obviously, the current consensus has a dividend, which is above the EUR 0.82, I think it's around EUR 0.865, EUR 0.87. And if you come towards the top end of the range, clearly, your EPS would imply a dividend higher than that. So I'm just trying to understand in my mind what are the moving parts that we are yet to receive with about a month to go?

Thanks for the question, Richard. Well, look, it's too early to say. We are in the middle of Q4 and you described our seasonal or traditional Q4 very well. There might be impacts of derivative accruals and what not, nothing unusual to our regular Q4 actions. And in that sense, I confirm that the minimum dividend according to our dividend policy is EUR 0.82.

At the moment, there are no more questions in the queue. [Operator Instructions] There seem no questions to be incoming, so with that I'm closing the Q&A session and handing the floor back over to the host.

Ladies and gentlemen, thanks for joining today's conference call. We will publish the results for the '24-'25 financial year on the 18th of December. Hope you having all some good late summer days, and I wish you a nice day. Goodbye.