Enel Aktie

Good day, ladies and gentlemen, and welcome to Enel Américas Second Quarter and First Half 2026 [Audio Gap].

Good evening to all the people connected. Welcome to the first half '26 results presentation. Enel CEO, Flavio Cattaneo, will open with the key highlights; and our CFO, Stefano De Angelis, will present the economic and financial results of the period. We ask those connected to the webcast to send questions only via email at [email protected].

Before we start, let me remind you that media is listening both to the presentation and the Q&A session. Thank you. And now let me hand over to the CEO.

Thank you, Omar. Welcome, everybody. Over the past months, we have continued to deliver [indiscernible] the execution. Indeed, in the first half, EBITDA and net income increased by 3% year-on-year reaching respectively $11.8 billion and $3.9 billion, in line with our expectations. In fact, due to the contribution of our activities in Spain and Latin America, we have been able to offset the impact of the Italian energy decree as Stefano will detail later on.

The strategic turnaround has improved the quality and the visibility of our earnings, reducing our exposure to market volatility. Growth continues to come from stronger underlying business performance. And at the same time, we are moving forward with both brownfield and greenfield investment while maintaining strict financial discipline. The focus on execution drove a 5% increase in earnings per share so far at EUR 0.40. This result allow us to expect full year EPS at the top end of our guidance range.

Let me now turn to our execution and the progress of our asset turnaround. Our asset portfolio is well balanced. 78% of EBITDA comes from Tier 1 countries, and more than 90% from regulated secured business with a low risk profile. Let me now show our progress in capital allocation across both greenfield and brownfield investments.

Greenfield investment increased by 14%, especially in Tier 1 countries. Networks remain our main focus and the strong expansion of RAB up by EUR 4.4 billion year-on-year, further improves visibility on future growth. In renewables, capital allocation remained disciplined. We continue to select in projects with secure earnings supported by PPAs or solid customer base. New capacity is progressing in line with the expectation with 3 giga currently in execution.

Regarding brownfield opportunities, since the beginning of the year, we have signed agreements to expand our asset base. This transaction will add 1.5 giga of renewable capacity and 350,000 customers. In addition, we are evaluating a 15 gig of [ forte ] opportunities, out of which 15%, 20% in advanced stage of negotiation.

Now let's move to value creation. In this month, we are addressing the new phase of our strategic plan with a clear focus on growth. Our investment plan is well on track. We've continued to increase shareholder moderation with EUR 6.6 billion returned through dividends and share buybacks. At the same time, we maintained a comfortable net debt-to-EBITDA ratio at 2.6x. Due to this, the 6% EPS growth for 2026 is already secured without considering any contribution of further shares buyback or acquisition.

I now hand over to Stefano, who will give you more details on our first half results.

Thank you, Flavio, and good evening to all of you. I will start giving some highlights about our business results. As in the last release, we have segregated the trading and wholesale segments results because this activity that [indiscernible] relevance is now in a completely different shape when compared to the past. As you know, our focus has shifted into an energy management model where commodities contracts, trading positions and related derivatives are no longer the end game, but they are instrumental to our core business that is to build and manage power capacity, generate, distribute and sell energy and adjacent services to our final customers.

2026 is the year when this discontinuity is pivotal in the results, given the aspiration of the last 2022-2023 huge position matching commodities contracts and derivatives with our generation. This means that now we have 100% of the production potentially devoted to our final customers. And the generation supply is now 100% end-to-end integrated value chain. To be consistent, we're moving to the financial results and help our stakeholders to share this evolution.

We will release some additional financial data about the composition of the global generation and trading unit, where the trading and wholesale results is accounted. This will not represent an adjustment of previous year results. And in order to favor the best potential acknowledgment, we have also eliminated any adjustment, for example, as we did in the first quarter. So the number are clear and are the same of last year. We will just segregate this trading and wholesale figures from the unit that is called global generation and trading. And we will publish all the details you may need to better understand the presentation and the business results that we are now commenting into this new landscape.

Before moving ahead in the presentation, I want to underline that in the first half, the EBITDA conversion into net income reached 33%, and net income share on full year target achieved 55% of the full year results. Types of target -- when we refer to the target in this part of the presentation, we refer to the target without any potential movement from the basic figure.

To give more color, more strategic overview of the business dynamics and having clarified the net of trading perimeter, I think it's better to move on Page 8. Here, we can appreciate how the first half delivered improved the quality and the visibility of our organic growth. First block is the distribution business that confirmed a double-digit EBITDA expansion, reaching EUR 4.8 billion and a 10% growth year-on-year, approximately EUR 400 million. This consistent trend boosted by continued expansion of CapEx and RAB further announced the share of our group's margin that stood in the 6 months at 41%, another step-up of 3 percentage points compared to last year.

Second block, the generation supply business shows a very similar trend when excluding the trading wholesale segment -- reshaped international portfolio is the driver of the EUR 600 million EBITDA growth. A very positive performance if we consider the persistent headwinds like the ancillary services in Spain or the curtailment, especially in South America.

Finally, we were to highlight the marginal exposure related to the trading and wholesale segment that accounts for just 3 percentage point of the group's EBITDA, minus 6 percentage points when compared to last year.

Let's now move into the business highlights. I'll start this section with the integrated margin evolution. And with the geographical description of the results that I think is better considering also when we were referring about headwinds [indiscernible] in order to comment the group results.

Starting from the top of the slide. We have LatAm where the growth has been supported by the additional mill capacity and by the improved hydro generation in Colombia. As I said before, we were to highlight that the persistent curtailment in Brazil offset improved price scenario also in the Northeast of the country, where we have a significant portion of our capacity. So it's a pretty good news. Unfortunately, the entertainment is not allowing us to take benefits in this moment of this trend in the market.

In Chile, the [indiscernible] hydro production in the second quarter was compensated in the 6 months, as you already saw in the 3 months -- in the first 3 months by the long-term gas contract optionality. In Iberia, the new integrated value chain that was introduced recently, that -- coupling the [indiscernible] volumes with the renewables and new [indiscernible] production resulted into [indiscernible] more profitable sourcing model based on the best-to-best flexible matching of the generation and supply profiles.

And in the commercial side, the reason we started in March with this action, exiting some well-identified and costly also in effect it push sales channels whose acquisition quality is not aligned with our ambition. On top of that, we have a supportive regulation of the island generation that paved the way also to future higher investment with a fair RAB remuneration. We are talking about real RAB, it's not RAB like somebody saying the best.

Finally, in Italy, the poor hydro resources availability offset the recent spot price upside. On the other hand, the retail business stabilized its trend, thanks to the increasing adoption of fixed price offering, representing a mutually convenient hedging for -- from the spot price spike, but I will comment this trend also in the following slide.

I'm on Page 10 of the presentation. As say before, the new energy model [ paradigm protect ] both side of the value chain from exogenous and unpredictable events that turn into price volatility. In this context, fixed offerings still both customers and suppliers allowing for a secure sourcing cost and for mutually affordable, sustainable and secure price for the final customer.

Looking at the trend of the average fixed price in the last 4 years, you may see that after the spike observed in 2022 and 2023, customers were reposition -- enjoying a 14% average reduction, that means a 40% reduction if we start from 2022, and we land on 2026. So -- and the relevant portion of this reduction was sustained through the sourcing efficiencies with the matching that I'm trying to make clear that is a real concrete structural and fundamental change in the story of the energy management of this group. Thanks to our generation, we can now maintain the price of the customers and change the -- in the [indiscernible] from the present, for example, short-term spike that is happening in Italy in these last 3 months. Why we can maintain this price because the sourcing is made through our generation. So for me, it's important to stabilize the pricing -- having a fair model benefit in terms of pricing, but especially in terms of ability to offset any potential change in the market condition.

Our competitor, for example, if you look at the pricing of the recent of -- also from the more aggressive, they were around EUR 150, just for the energy component. This is not to say that this is exactly the price that they have to pay in order to source the energy that they will sell to the fixed customers they want to acquire. I say this because what is the positive and visible return for the company, not a spike in the margin, but a spike in the average lifetime of the contracts of the customers that increased 2 years from 3 to 5 years, and this was the result of a dramatic reduction in the churn that moved from more than 30% in 2024 to below 20% in 2026, and these months, it's also continuing to improve. But again, this is a specific situation that we have today when we have an additional benefit to when compared to our -- to the other players in the market.

Let's now move to the grids. The EBITDA here reached EUR 4.8 billion, as I said before, increasing 10% versus the same period of last year and accounting for 41% on the total of the group. If we look at the evolution for the geographies, in Italy, it's a clear example of what we consider consistent and resilient. We continue to increase the CapEx. Now we have single-digit change. But what is really important in Italy that we are improving strongly the RAB expansion because as you may remember, I commented before, when you make a mix where you eliminate, for example, the grants that clearly are positive because we have the reimbursement. We have a marginal, let's say, single-digit margin up to 10% but 0 of that amount moving to the RAB.

When I move from grants into normal, let me say, CapEx -- this make a completely different change in terms of RAB, also because I already closed the gap between the [indiscernible]. And talking about [indiscernible] this is exactly what we expect to happen in Spain, where we have, let me say, a [ vegetative ] RAB in the last years. You may see 11.4%, 11.5%, 11.3%. Now a new cycle has already started. So in this quarter, we do not see the benefit, let me say, that we expect moving forward. And in this quarter, we are starting this new [indiscernible] investment, but we have also [indiscernible] you can see the debt, what sometimes we consider one-off. It's not just a one-off because if you look inside the one-off, you see that this one-off is related to a positive change into the regulation. So you have the recovery of some previous year results that is, let me say, a one-off. But you have also to look inside that you see that you have a benefit when compared to the vessel for structural improvement as, for example, the [indiscernible] recent change.

In LatAm, where we see Colombia, we, let me say, are very happy to see how this country can be resilient also in terms of the grids. Brazil has been very positive because of the tariff adjustment related to inflation, we increase the investment by 30% when compared to last year, and this also have a positive benefit to the RAB. Now what is important in Brazil is that these are, let me say, book value that are right for us, this compose [indiscernible] financial assets at the end of the concession. So it's real value. But we have to transform this variance to cash in the next quarters. There, as you may see, reached approximately EUR 50 billion. That, as we know, this increased strongly the resilience and visibility of the EBITDA moving forward. And we are talking about, let me say, as you see, more than 40% of our present EBITDA.

Moving into the next slide. We see that the CapEx that are one of the booster of the RAB at -- of the EBITDA growth have reached EUR 3.5 billion now. EUR 0.6 billion in Brazil, 30% growth. EUR 2.2 billion in Italy, where the story of the investment for the resilience, the quality and the development of the [indiscernible] a full year story. And as you may see in the right side part of the slide, you see how we reach with a consistent growth in the [indiscernible], the EUR 4.5 billion that we expect for this year. And what is important that in the 6 months with EUR 2.2 billion of CapEx into the Italian network we have already realized what was the average investment in the 5 years from 2018 to 2022.

Now I'll quickly show you the earnings per share evolution before diving into the cash flow dynamics. The earnings per share growth is supported by a sound industrial operational business with the strong delivering and also partial execution of the share buyback, both Enel and SpA and at subsidiary level. These remarkable results in the first half represent 54% of the target for the full year and allow us to expect an earnings per share for 2026 landing at EUR 0.74 corresponding to the high end of the guidance range.

Looking at that evolution for 2026, it's important to underline that this result will be based from now to the end of the year, purely on organic growth driven by the consistent delivery of our investment plan and the strategy set to enhance the value of our existing asset base. To summarize in numbers, the 2026 full year net income expectation, we also exceed the 5% growth year-on-year set at the Capital Market Day, positioning us in the high end of the range.

With the already executed share buyback for enhancing the earnings per share accretion by 200 basis points. This is something that you also see today. This will -- this is a translation of the difference of the growth between net income and earnings per share that is -- will be replaced in this year 200 basis points at June, 200 basis points at December because we are now considered a scenario where the share buyback at [indiscernible] is what we have already realized. We are not imagined to change any of the EUR 1.5 billion remaining. But in this moment, we are planning the remaining part of the year with the existing and executed EUR 2.0 billion of the share buyback.

This means that brownfield contribution and this additional share buyback, not only at Enel SpA because also in this I have a residual, as you can see in the annex program [indiscernible] buyback that this part, as we stated, clearly, of the Capital Market Day [indiscernible] of both [indiscernible] and Enel, that can further expand the growth potential ahead of 2026.

And now as promised before, I will move into the cash flow and net debt dynamics. The cash generation continued to be strong with the recurring free cash flow standing at EUR 6.1 billion, implying a cash conversion higher than 50%, that is solid if we consider the seasonal dynamics on CapEx that we observe all the year in the sector and in Enel at the group level. The recurring cash flow generated by the business net of taxes and financial costs, cover the CapEx of the period for EUR 1.1 billion exceeding that serving part of the shareholder remuneration that is compiled by EUR 1.5 billion executed share buyback and EUR 2.9 billion dividends.

What is important in this result is that we have a significant FX impact of EUR 1.2 billion. This is important to remind that we are not adjusting this value as it happens sometimes in other parts of the Europe. And we have to see that this as technically speaking, it's called [indiscernible]. This EUR 1.2 billion, that also includes the leasing, will not exist so means that there are impact -- temporary impacts of especially coverage in terms of FX and variable fixed interest rate that is in our history also when we repay our debt at the maturity, this will completely disappear. So our debt -- our net debt is EUR 60 billion. This is part of the accounting routes of the IFRS. So we have informed the market that including this component, our debt is EUR 61 million.

In this cash flow, we have the impact -- the first impact, let's say, the financial one of the energy degree, and we are prepared in the last page of the presentation, 15, an update because we know that is considered a really important item. So we have put into this slide of the Capital Market Day that we [indiscernible] all the night preparing for the market. And the update regarding the part of the degree that is already clear and active.

So if we start from the ATS offset, as underlined in the energy decrease, this measure is provided for 2027. So the impact on 2026 would have been 0 in any case. As you probably know, currently, there are analysis ongoing at EU and national level to define the measure that will not consist in the -- that the ATS offset but we'll maintain the final goal that is to smooth the energy price in Italy, also for the ATS component.

What is important to keep in mind that in our plan assumption, we have already embedded a severe potential impact of the energy degree. If you remember, it was in the EPS only related to these items. It was the first block of the bridge. The measure related to the early payment of system charges was expected, as you can see in the comparison between the Capital Market Day presentation, the [indiscernible] at EUR 800 million. The effective imbalance, as you may see, is higher at EUR 1.2 billion. This is not because we made a mistake in the cash flow. But because in the transformation, the degree in [indiscernible], there was added the component of the [indiscernible], the so-called [indiscernible] that is the system charges collected to support renewables.

Finally, the RAB as projected and expected impact for EUR 0.1 billion approximately, bottom that and on the reported net income. For next year regarding these items that I referred more to the financial side of the measures, we expect to have a total impact on net debt ranging from EUR 1.6 billion, EUR 1.8 billion because the system charge do not depend just by the number of customers and [indiscernible] depend also by the movement that we have in the component of the price that is not defined by us, but by the regulatory [indiscernible].

So this will be compound by the EUR 800 million that we already projected, the EUR 400 million that are 2 years 2026 and 2027 of the additional 2 percentage points on the RAB, the regional taxes -- the regional tax. And the green block is what we may expect that at the moment is EUR 400 million, we have made, let me say, a range coming from a potential change of the other system charges that are now in June, representing the EUR 1.2 billion impact that I already commented.

What is important is to clarify 2 points. These impacts are on the stock of the debt and our, let me say, a one-off because they are not regarding cash flow impact. This means that our free cash flow in 2027 will not be affected by [ 1.2 ] impact of the system charges advance payment because this happened just one time in the first year of adoption. Next year, we will have a higher debt of EUR 1.2 billion, but the cash flow will be not affected by this movement because we will anticipate the payment in 2026 or 2027. So in 2027, we will have the benefit of not having to pay 2x the charges coming to the final [indiscernible] of the impact.

Second, this impact of EUR 1.6 million do not include any about the 2027 measures that are the regarding one [indiscernible] in the intention of the measure will impact the market prices. So we become, let me say, [indiscernible] we will not consider this one-off or not ordinary, et cetera. But at the moment, we talking about -- referring about the 2026 impact that are just financial.

With this long discussion about a very relevant topic, I hope to have -- any doubt in your comprehension of the energy [indiscernible] impact at this moment, so I can now hand over to the CEO for some closing remarks.

Thank you, Stefano. Let's move to the closing remarks. As I said before, our results are solid and supported by strong underlying business performance and high-quality earnings mix, financial flexibility continues to support growth and allow us to capture additional value accretive brownfield opportunities. The quality and visibility of our result allow us to expect a full year '26 CPS at the top end of our guidance range.

Thank you for your attention, and let's now open the Q&A session.

We thank you our CEO. Let's now open the Q&A session. We received a lot of questions. We summarized by topic. Let's start with the more strategic questions that will be answered by our CEO. The first one, let's start with concession. What's the latest news on the concession renewal of hydro and distribution networks?

Well, in Italy, the distribution concession process is clearly defined by the law. The process is moving forward, and we have not gone particularly concerned. Regarding hydro, we simply need to wait for the appropriate time. I'd like to remind you, despite of our hydro concession will be in 2029. And to give you an example, the currently action for the other operators are ongoing on micro concession despite 10 years ago.

Let's move to Brazil. Could you please provide us color on the process for Sao Paulo concession and your view on Brazil in general?

Okay. Well, over the past year, we have significantly improved our service quality indicators, defined by the local authority passing from 31st in December 2023 to 7th ranking in May 6 06 -- or '26, sorry. We've delivered on every commitment defined by the Brazilian government. We have proposed 2 solutions to solve the blackout problem, underground the cables or allow more extensive trimming. In Sao Paulo cables run through the trees and the local rules don't allow us to trim more than 25% of [indiscernible], and that is not enough. At the same time, the issue is political. Brazil has been in a continuous election cycle. Local election last year, presidential election this year and this situation affects the process, of course.

We remain in close dialogue with the Brazilian government. Take in mind the local authority is involved only as adviser of Minister. Moreover, the process refers only to the concession and not to the Sao Paulo company. It's important to underline the 2 concepts. First, our RAB is fully protected. Second, you have to consider the value of the company not included in the RAB. And we are talking about assets such as software, equipment, the backup generators, inventories, spare parts in a big, big numbers.

At the same time, we continue discussion with the local authority. Moreover, as recently highlighted by the government that there is also an issue on Brazilian credibility for international investment. We remain confident, our balanced solution is achievable. Our objective remains the same, a fair outcome for all parties, simple.

Thank you. Let's move now to brownfield opportunities. Can you give us some color on the timeline and the size of the deal you're evaluating?

As I said before, about the 15 giga brownfield assets are currently on the market, we can secure around 15% to 20% of this pipeline. Brownfield in every meeting, also in our Capital Market Day, we said is an important driver for growth. Over the past year, we have delivered on every commitment we made. We intend to do exactly the same on M&A, remaining disciplined.

Thank you. Share buyback. Enel share buyback has been approved for EUR 1.5 billion. Any detail on the timing?

The buyback is well on track. We have already completed part of the program, not all. Remaining portion will be and this portion will be executed based on market condition as previously communicated.

Thank you. Going back to Italy. Given the recent evolution of the discussion on energy price in Italy and the energy decree, could you please share your view?

Well, the public debate often creates a misunderstanding between the wholesale and the retail price. The 2 aren't the same. The final monthly bill for residential customers is broadly in line with the European level as reported by Eurostat for 2025. We are an integrated operator. We generate -- generate electricity and supply directly to our customers. Most of our residential customers are on fixed price contract. They aren't affected by short-term movement in wholesale electricity prices. The fixed offers are [indiscernible] for market volatility and international price shocks while maintaining stable our marginality. This is the deal.

Thank you. Let's now move to question for the CFO, Stefano. Working capital deterioration for -- from first quarter, what's the expected level for year-end?

As always, the change of the working capital in the first 9 months, let's say, the first and second and the third quarter, reflects the typical seasonal trends that we [indiscernible] every year in this part of the release, mainly associated with the dynamics on [ CapEx ] spending and inventories. To make a long story short, we also answered this question. And each of the previous 3 year working capital normalized in Q4 as promised by the company. So not to say that somebody have to trust in [indiscernible] or in the finance department. But this is a usual regarding [indiscernible] has already been observed in the last -- as a minimum 4 years, 3 years. This is the fourth.

Thank you, Stefano. Can you provide us the expected moving parts to get to your net debt for 2026?

Yes, let's make it very simple. I will have EUR 15 billion, so you have the final figure from the EUR 15 million approximately of regarding FFO. This means EUR 9 billion more of the first half. That is more or less in line last year. If you remember, we have 14.8% and at this stage, we have EUR 6 billion. So nothing changing consistent resilient utility. We will have -- this is not so simple because we have, let me say, CapEx, we have already spent EUR 5 billion that we have some changes.

We will expect to spend EUR 7 billion. Then there is a moving part of EUR 1 billion approximately that is represented by the first impact of the growth acceleration of the leverage because if the timing will be confirmed, we will start to have in the last months of the fourth quarter probably the first closing of the brownfield acquisition, and we are talking about $1.5 billion. This will not have an impact on the economic results, let's say, EBITDA nor financial costs because we are talking about just [indiscernible]. But in the stock of the debt, we will probably -- in the CapEx flow, we will have probably $1 billion, $1.5 billion related to the already released side brownfield operation. So EUR 13 billion of that's supposed -- $13.5 billion of CapEx. We will, again, will have EUR 1 billion -- EUR 1.5 billion of positive FFO minus CapEx.

What this is, is that in the second part of the year, we will have the same amount of shareholder remuneration, but with EUR 500 million that moved from one block to another. We will have more dividends and less share buyback. So instead of having EUR 1.5 million of share buyback, we would have one expected share buyback, not regarding [indiscernible] and 2.8% dividend payments. The huge portion of this, it's already been paid by us in the months -- in this month, we're already on the July, sorry.

What we have on top of this? We can say almost nothing. The FX impact may -- we are not -- in this bridge, I'm not consider any change, let's say. So we have the negative impact. If you start from June, you may use the EUR 60 billion or the EUR 61 billion, as you prefer, but the net cash flow will be, I repeat, EUR 15 billion approximately FFO, EUR 13 billion, EUR 14 billion of CapEx, EUR 4.5 billion of dividends, and we have the reversal of the hybrid bonds because we will have -- if you consider -- if you start from June, you have to consider that in June, we have a positive impact on the hybrid of approximately EUR 700 million, EUR 800 million because of the timing difference of the issue of the new bond and the repayment of the previous emission at maturity.

So this accounts for approximately EUR 800 million. I will not make this [indiscernible], so you can enjoy, but we are talking about something that if you look at the FX, including the FX impact is in the range of EUR 64 billion, EUR 65 billion debt more than this. I don't know what to...

Thank you, Stefano. Now let's move...

[indiscernible] ask me about the EBITDA bridge because...

Right. That is the next question. So now let's move to EBITDA. Can you provide the building blocks to bridge your EBITDA target by region?

EBITDA, it's easier because I'm not joking. The utility should have, let me say, more or less the same amount of EBITDA. We have some seasonality effects in the power that the second quarter, for example, [indiscernible]. But if I tell you that we will have the same dynamics in the second part of the year, this is exactly what we expect to happen, especially if you look at the first half in the second half, then if you look at 2025, you had some impact related to marginal, let's say, one-off that I don't consider one-off that are seasonal accounting items that if I have, let me say, an agreement with the [indiscernible] that enter EUR 100 million per year, and I account one year in the third quarter, where in the fourth quarter, you will have a difference in analyzing the by quarter results.

What we see that Italy, it's totally resilient now also in the commercial side. I will answer also the question by the hydro in Italy. We are already accounted in my projection of thought that we will not have the same water condition that we have, for example, 2 years ago, but we expect to have a 2027 that will restart from a normalized position. These are the weather condition that [indiscernible] will probably characterize the results. So some negatives in the renewables in Italy compensated by very positive trends from the commercial side, not because we are increasing prices, but because we are retaining good customers.

In Spain, we will have a very positive second half different from what somebody expect because, as I say, it's not just one-off. Clear in some of the items, for example, the one-off of the previous year agreement for the [indiscernible] cannot be, let me say, double. But if you take the EBITDA of the first half and you multiply to the figure that we expect is not much far from this value because the portion of the one-off may be offset by the growth of the operating business portfolio.

In Lat Am, we expect a recovery for -- from Chile and Brazil in the integrated margin because the performance was not so good due to weather hydro condition. And as I said before, the pricing the market scenario is very supportive in this. Colombia, we will continue to be resilient in the second half. Argentina, who knows, but we have very important discussion about the recognition of some components related to the previous agreement we made on the debt and the receivables that are with the local authority and with the government for what we have not been paid in the last 3 years. So this could be a very important topic in the fourth quarter.

[indiscernible] networks, as I said before, multiplied by 2 and you have a very -- I already tell you the number in the first quarter release, and I confirm that number, maybe some [ 100 ] more it was 9.6%, 9.7% [indiscernible] at EUR 100 million in this range, so let's say, 9.6%, 9.8%. So you have a midpoint that increased [indiscernible] in order to take account also of the partial one-off that we have observed that part of this in the first quarter was not -- so again, as of the FFO, you will now not call the [indiscernible].

That's right. I think also we cover all the questions regarding hydro...

Yes. [indiscernible] consider in hydro that the diversification impact that the rating agencies love -- if you are diversified into countries that are Tier 1 or Tire 2 at [indiscernible]. For example, we have -- in Europe, one of the worst reserve in Italy. We have one -- probably the best year in the last 10 in Spain. So as always, what is good of being [indiscernible] also geographically [indiscernible] that you can compensate some negative temporary effects with the positive ones.

Thank you, Stefano. Now let's move to regulation of this one. What [indiscernible] for Italy is expected by year-end? Which is the level of [indiscernible] expected at the moment?

This question, you know that we are Italian, so we don't have to talk about something that may happen or not depended also on something that do not depend on us. Last year, for example, everybody was already considering a 30 basis point reduction, nothing happened because the inflection that was used -- arrive to a figure that was for 1 basis point in the range. At this moment, [indiscernible] basis points is again the central scenario. But this year, we may have some good news coming from the spread [indiscernible] and the BTP.

So the scenario I have to tell you that is a calculation is 30 basis points more or less. So we are again [indiscernible]. What is important that the figure I already listened more than EUR 100 million, you know that we have always a plan and we never put the figure that the maximum on potential when it's positive, and we consider the maximum [indiscernible] potential [indiscernible] in order to prepare the recovery [indiscernible]. So we have some inflation positive recovery in the OpEx, et cetera. So the impact will not be [indiscernible] number in terms of euro if this happen, we are talking about something that is more or less in a half of what I have [indiscernible] about EUR 120 billion [indiscernible].

So it doesn't change the history of the network at Enel and in Italy because, as you see, the opportunity that we have in terms of RAB expansion and additional CapEx return is something that will not make us change the trajectory for 30 basis points of [indiscernible].

Thank you, Stefan. Now let's talk about retail. Are you concerned about Italian retail business? Could competition erode margins or lead to customer losses? Do you see any risk for regulatory intervention?

But the risk of regular intervention is always there, but let me say, what is important [indiscernible] that it's very easy to check what are the price position of the different players. And in the last -- now is -- from March, April, let's say, April [indiscernible] Enel is the most competitive player in the market because this was also a choice that we made in order to secure and to reduce the [indiscernible] we could make this, let me say, decision without having any negative impact on the margins, as I said before. And when we talk about margin, let's consider that what you need and sometimes is not margin is, I call it, spread because we have a lot of cost. We have a lot of cost. That means that the calendar change, the calendar based. So when we have to source the small business customers that we are not in the condition to source in Italy with our energy. You probably remember my [indiscernible] the business to consumer customers.

We have the profile and the shape of the consumption of the customers that change [indiscernible] based on the project [indiscernible] addition has reduced. I have some gigawatt more to be covered, to be hedged. And if I am not safe, and I don't have my buffer as the hydro that was in the past [indiscernible] without having the -- still the weather projection. In this sense, we do not have any negative impact in this year for buying back the energy that we have already sold at the lower price.

But coming back to the retail, again, the spread is not so high, as you can imagine. And the reason price move of our competitor is really important to understand what is the spread. Then you have to consider that there is a cost to [indiscernible]. But when you are a company like Enel you have a cost to [indiscernible] that is higher than the digital player is higher than the newcomers. But where we compete is not just the price, but is the multi-bundle offer. It's the loyalty programs, it's the customer care that we have is different.

You see that some the basic offer of one of the most famous digital player is that after one year, you move into an indexed offer that today means more than EUR 200. This is the basic one. We do not have this price, the contractual provision in any of our contract because our interest is to maintain the customers into the fixed offer price that we decided based on the industrial cost of our production.

Again, the price will be reduced in the future. Yes, probably, yes, because the marginal price has to be the price of the [indiscernible] of the marginal technology that will not be in the next 3 years, the [indiscernible] more than EUR 150. But we have something that, as I said sometimes before, also in the presentation, that is [indiscernible]. This intermediated the wholesale spot price and we have the opportunity to match the generation and demand profiles that allow a reduction of the cost of sourcing of the customers. And the negative spread that you have when you have to inject in the network energy at launch time, that is in Italy, I remember, the higher [indiscernible] price that we have in the offer of all the competitors because in the past, the pricing was following the consumption.

When you charge a car [indiscernible] at mid time, you pay more than EUR 400 per megawatt because of the cost of the [indiscernible]. That energy is paid into the wholesale market [indiscernible]. This between EUR 310 million, there is all the opportunity to have the fair price for the final customers and an optimization of the generation fleet from the producer. This is called flexibility, and this will be the future that we are already starting to implement at Enel.

Thank you, Stefano, for the analysis. Let me double check if there is some more question and last one. Share buyback at subsidiary level, what's the strategic rationale?

The strategic rationale is that we have a company that have, let me say, a net financial position that -- a financial leverage that is not optimized. And we have the opportunity to make investment -- industrial investment buying back part of our invested capital. Clearly, the price has to be fair. But if I look at what we have already realized, we [indiscernible] at Enel we have [indiscernible] buyback average price. But at [indiscernible], we have EUR 30 so we are more than 30% discount return, as you refer, compared to the price, and we consider that also for Europe is not the fair value of the company because you have a lot of resources there that in the future may be -- no -- used to create more value.

You know that they have some renewables and now more than doubled the energy that we generate in Italy, excluding the [indiscernible]. So they have the network that is in terms of growth regarding a new phase. But again, in Enel Americas, we are confident of the Brazilian concession resolution, we buy back the share with a multiple of 3.5. We consider this very -- and in Americas has just [indiscernible] that we repaid in the forthcoming months that is the $600 million bond. So remember that when we realized the first buyback they have a net financial position that was positive, already paying an extraordinary dividend. So we have also to look at this part of the group that how it is split in the different regions.

Thank you for the clarification. There are no more questions, so the Q&A session is over. We cover all the main topics. If something is missing, the IR team is available for follow-ups after the call. Thanks to everybody.

Thank you, and see you soon. Bye-bye.

Good evening to all the people connected. Welcome to the First Quarter 2026 results presentation. And as CFO, Stéfano De Angelis will present the economic and financial results of the period. We have those connected to the webcast to send questions only via email at [email protected].

Before we start, let me remind you that media is listening to both the presentation and the Q&A session. Thank you. And now let me hand over to the CFO.

Thank you, Omar, and good evening to everybody. I will start with an overview of our first quarter operational and financial performance, confirming the disciplined execution of our strategic plan. Our CEO defined 3 main pillars in February Capital Markets Day, and I will follow this as today agenda. And starting from productivity, let me explain that we have a wide application that's spent from maximizing returns to the optimization of our existing asset and operating costs to enhance the efficiency of the financial results and support both our current and incremental asset portfolio

Over the past few years, since the first step of the turnaround of the capital allocation, we follow a simple but of an undervalue approach, increase the share of stable, visible and financially sustainable portfolio exposure. The 2022-2025 industrial trend, including the disposal program implied a contribution from net debt to EBITDA of around 32%. Now this quarter, we have consolidated a significant step forward, reaching 42%. This dramatic increase in the contribution from resilient network activities, together with a further evolution of our business model, particularly the reduction in earnings from trading and wholesale has resulted in a solid year-on-year growth, confirming the strength of our integrated model even in a distressed environment.

The positive trend is now supported also by the network business in Spain that is starting a steady growth trajectory. The resiliency of growth operations translated into a 32% net income conversion into EBITDA and an improved cash generation with an FFO on net debt at 26% over the last 12 months, increasing 3 percentage points versus the same period of last year.

Furthermore, earning per share to EUR 0.20 in the period, representing around 27% of the total target of the year. We want to highlight that these results are entirely based on the organic delivery of our existing businesses, providing visibility on the evolution of the following quarters of the year and on the achievement on the 2026 earnings per share guidance.

After this long introduction, we can dive into the results of the quarter. The new business model implemented delivered higher earnings quality thanks to a structural shift from a commodity-driven asset portfolio to a flexible energy management focused on final markets, maximizing the value of Enel Group's generation and retail customer base as core assets. This new approach resulted in a more and more solid EBITDA evolution, which delivered a consistent growth, demonstrating the continued improvement in the other line operation performance.

For 2026, we expect to maintain the same growth trajectory observed in Q1, also in line with the expectation presented during our Capital Markets Day in February. Diving into Q1, wins accounted for 42% of the total EBITDA recording a strong result across all geographies, particularly in Spain, as I will detail later. On the other hand, the results of the trading and wholesale waves now for a mere 3% of our total group's EBITDA. Worth to highlight that historically, Q1 results were inflated by hedge-related FX that we absorbed across the remaining quarters. Two dynamics help to explain the quarter year-on-year comparison. First, in the first Q 2025, we recorded an exceptional approximate EUR 200 million positive mark-to-market results in trading, benefiting from the temporary commodity price spike observed in the period.

Really important, we are not adjusting full year 2025 baseline. This upside was then offset across the subsequent quarters of 2025. Second and more relevant, our revised hedging strategy has been reset to reduce margin volatility, making results less dependent on commodity price fluctuation. This strategy does not mean that we have lost profit from this activity because we are changing the hedge strategy in Italy, as I will detail later.

Now I will dive to our financial discipline. I'm on Page 4. The solid operating delivery across the asset portfolio translated into stronger economic and financial results. EBITDA reached almost EUR 6 billion, accounting for 26% of the results expected for 2026, and increasing 4% year-on-year. As mentioned, the results was achieved thanks to a remarkable increase in grid's EBITDA in Spain. While in generation, we recorded a slight decline in nonemitting technologies. The higher output in Europe was offset by reduced results availability in LATAM and lower tax incentives in the U.S. When we refer to reduced results, we also refer to the curtailment issue in Brazil.

In turn, we benefited from the contribution of the Fusina power plant in Italy and from the optimization of gas sourcing costs for our CCGT fleet. On the other hand, the retail performance was stable year-on-year, supported by the rollout of our revised commercial strategy with offers anchor to a sustainable price level and more rational commercial policies.

Net income came in at almost EUR 2 billion, increasing by 4% on a like-for-like basis, resulting into a 32% EBITDA conversion, as I said before. FFO on net debt ratio improved to 26%, an improvement of 3 percentage points compared to last year's. Finally, the FFO is remarkable, reaching the EUR 4.4 billion quarterly results, again, a solid improvement when compared to last year.

I will detail in the next slide about FFO and net debt evolution. Group's cash generation continued to be strong with an FFO standing at EUR 4.4 billion, implying remarkable 73% cash conversion. The net cash generated by the operations funded a EUR 3.9 billion shareholders' return including both the interim dividend paid in January and the shares buyback executed as well as the investment deployed in the period. This allowed our leverage to remain solid at 2.5x over the last 12 months, well below the sector average, which stands at around 3.5x.

Let's now move to the net income and earnings per share evolution. Our earnings per share growth is supported by an industrial and operational business performance covered in terms of TSR with the execution of our share buyback programs. The growth acceleration related by the brownfield opportunity will become more and more visible and concrete along the second half of this year and in 2027 in terms of economic growth contribution.

Coming back to the net income. The result came in at EUR 1.9 billion, with a solid 4% growth on a like-for-like basis in line with the EBITDA growth trajectory. As underlined in our previous result releases, the managerial actions implemented delivered an organic and structural improvement of the asset base, granting a lower EBITDA dilution at the bottom line.

As a result, D&A recorded a slight increase versus previous year, driven by higher amortization on increased level of CapEx deployed over the year, offset almost in full by the positive bad debt evolution in this quarter, especially in Iberia. Financial expenses and minorities are in line with last year. Income taxes stood at EUR 1 billion, increasing versus last year on higher taxable base. I will now dive into the progress on brownfield and share buyback.

I'm on Page 7. The existing know-how in M&A powered by the new management experience and supported by a dedicated technical team from Energy and Power is full time involved in new opportunities, a huge area, fueled by a well-diversified array of seller and buyers where we play a unique worldwide utility player. In order to have a clear view on this context and better understand the reason of our convinced ambition on brownfield as a concrete growth driver, we can, let's say, spoil some update on the U.S. brownfield pipeline. In this moment, on top of the executed or signed deal, we have 15 gigawatt capacity portfolios.

As sales process under evaluation started out of which approximately 1 gig is in an advanced stage of negotiation, while the remaining part of the portfolio will be subject to nonbinding offer in -- between May and June. We have to respect the deadline of the seller in this case. But this 14 gigawatt portfolio are expected to generate a nonbinding offer again between May and June of this year.

About the share buyback, we have already shared the figures. So I will move now into some business highlights, and I'm on Page 9 of the presentation. In the first quarter of this year, EBITDA reached EUR 2.5 billion, increasing 18% versus the same period of 2025. Look at the evolution by geography. It's important to mention that European network increased by almost EUR 300 million, thanks to the variant activities where we benefited also by the new regulatory framework and some recovery in terms of previous year tariff decision from the authority.

In LatAm, inflation adjustments contributed almost entirely to the increase recorded in the period. The remarkable low allowed risk share on total group EBITDA, as I said before, to grow 6 percentage points and reaching 42%, providing an increase in visibility of the portion of earnings fully secured. The huge amount of investment deployment in [ grid ] in the last years, not only in this quarter, most of the value of our ramp which has now reached almost EUR 49 million at group level, increasing the resiliency and visibility of our EBITDA also for the coming periods.

Let's now have a look at the evolution of the generation and supply in Italy. First of all, it's worth to make an introduction talking about the market environment, starting from the evolution of the pool price. After the spike observed in 2022, 2023, despite the persistent short-term volatility, we have to note that in 2024 and 2025, prices stabilized at around EUR 110, EUR 115 per megawatt. On the other hand, the forward power price allows suppliers in the free market to hedge the volume to be sold in 2026 at around EUR 106. What to underline that this price is locked in and reduce the volatility of the energy price from both sides of the value chain. We reduce the volatility for the supplier and then reduce the volatility for the final customers at a price that is far from the spike that we observe each day in the last quarter, in the last 2 months.

So the customer paid based on a target that is sourced at EUR 106. These tariffs cannot be changed for 1 year. So these customers that represent, let's keep in mind, 75% of our customer base and more or less of the Italian retail market referring to consumer and small business is totally protected from what is happening in the last 2 months and also what happened in some other periods when we had spike. That's why it's important to look at the right part of the first part of the slide. And this is what happened starting from the first of January at 3 different power price.

The red line is the price. This is the price paid by the index offer or by the [indiscernible] and the Mazo Tutela regulated offer. Then we have the 2027-2028 because keep in mind that 2026 has been sold at approximately EUR 106, so now it's stable. These are the prices that are used by the supplier to source and to hedge the new offer. Let's see the 2028. 2028 went dramatically down when there was the ETF issue, the grid, then do not recover at the beginning of the year and are because this was supposed to be a short-term issue.

So look, is open between the blue and the red line, it's open the difference because the short-term power price moves up, the long term continue to be affected by the ETS and the revision of the system issue.

Then when the Iran war was considered to produce, let's say, medium-term impacts, you see that progressively, the price of 2027 and 2028 sources started to recover. But for example, for the 2028, we are still below the beginning of the year. And for the 2027 sourcing, we are less than EUR 10 per megawatt difference from the sourcing that should have been paid at the beginning of the year.

So when we talk about the impact in the retail customer base at fixed price, we have to keep in mind what happened at the different component of the market, acquisition customers, acquire customers and customer base pricing scheme that again fully protected by any spike. This is important because when I move to the next slide, I'm referring to our hedging strategy. You know that we have 18 terawatt of renewables, excluding the hydro buffer and the regulated generation. We hedge 100% of this generation to our consumer, residential, fixed offer, our volumes, 80% of this, more than 80% of this is hedged by existing customers with price offer. So the price is set. Part of this is the second block is a pricing that is under the first year lock-in. When the first year is filed, we are in the condition that the supplier has the option to change the price of these customers, not the obligation, clearly, but has the option.

In our strategy, let me say, the price up is not an option normally because we renew our customer base. You know that we've had from a long period of repricing down the customer because when we are right here, there was, let me say, the still the pricing scheme of the 2022 commodities spike. But now we maintain the rise of the customers independently from the trend of the energy because we have our own energy that at these customers. It's not the case that in this period, our churn rate continued to improve and now is 17% on a full year basis.

In the right part of this slide, I try to explain how does it work consider that the color reflects the hedging strategy. So you see that after 12 months at the end of 2027 also the acquisition that we will perform this year will become Magenta, I think was in English, full Magenta that is the new color of Enel. So having spent this time, let's hope usually for everybody to understand the better the retail market in Italy.

I will move to the investment of the quarter, the CapEx increased 12% on both the grids and the renewable segment. What is important here is not the 12% growth because the amount of coverage we have in our plan. But again, it's important to say that the brownfield will create a spike of investment because we consider the brownfield as an opportunity to be evaluated with the greenfield. So when you build a plant, you have a CapEx spread along the quarters. When you buy the brownfield, you have the CapEx concentrated in the quarter. We saw this with the solar idle assets.

On the other hand, what is important is that the renewable greenfield that we have presented in the Capital Market Day is moving towards, and we have approximately 3 gigawatts next to the final investment decision in our group investment committee.

I will move now to some final closing remarks. Economic and financial results achieved are solid and based on an organic and recurring performance. We stress that the quality of the results is matched with a plan that is built on a growing contribution from regulated activities and less volatile earning mix. And this established the foundation for a predictable and visible business evolution. The solid operating financial delivery recorded in Q1 is consequently set to persist also in the coming quarter, strongly supporting our EPS guidance for 2026 as well as the commitments on growth acceleration on top of the underlying business performance. The last 3 years were focused on a depreciate of the capital allocation strategy, the business priorities and the geographic investment focus and the sustainability of our financial leverage.

Now with a step forward coming from the shift from the commodity centrality towards an integrated energy management focused on final customers. 2026 results will be even more solid. Thanks for your attention, and I now open the Q&A section.

Thank you, Stefano. Let's now open the Q&A session. We received a lot of questions for the call. We have summarized them by topics. The first one, could you please provide us an update in the light of the current commodity price scenario compared to your business plan expectation, any upside or downside?

The brand presented in February that means on a price curve, reflecting both the forward price scenario at the time of the brand, the preparation and the first estimate on the impact of the energy degree in Italy. If we lose the current price curve for the calendar year 2027, 2028, these are still pretty line. Don't forget that we have a war under undefined solution and on the other, and I insist that we have a backwardation in the curve that do not reflect the real market expectation, adjusted financial and balance between demand and offer of long-term deals, especially in Italy, in Spain and in Europe where we have poor volumes of BPA.

At the moment, we should say that we confirm this scenario, keep in mind that we consider this scenario as a scenario that is, let me say, prudent and is covering the most of the risk that we can expect from now to the next couple of quarters where we start to understand better what may happen regarding especially the ATS decision at EU level.

Thank you, Stefano. Any update on the Italian energy decree?

We do not consider the, let me say, the final approval that have some, let me say, minor change we have to stay on what I have already commented. The degree confirmed the expectation to move to an offset of the ETS in the Italian thermal generation. On the other hand, what will be really important is to understand what we have been at EU level, we want to find a solution to have reduction of the weight of the EPS in the Italian oil price. And this is exactly what we have used as driver in order to build our medium to long-term scenario.

What we have understood in February was that the January CO2 prices, price more than EUR 100 will not exist anymore. This price will be reduced with some mechanism that we will see what came from the discussion that we are not part of the discussion at institutional level. But what is clear is that the Italian situation where you have an impact of EPS that stand-alone base may explain EUR 50 per megawatt energy price is not sustainable. We have considered it as a structural change in the Italian market scenario, and we have embedded in our projection.

So let me say we are, as I always remember, covered by and not exposed to the existing ADS price and expectation.

Thank you, Stefano. We have received one question regarding the EPS growth. So you are targeting 6% EPS growth in 2026. How much do you think is from organic and inorganic growth? And how much from share buyback?

We have given, I think, a very detailed bridge to the 2028 EPS growth, where it's -- I'm sure to remind correctly that there is the buyback that did impact. I think it's more important to focus on 2026. So starting from now, and to reach the 6% growth that we expect by year-end or better that you figure the [ EUR 0.73 ] midpoint guidance of the EPS. Starting from now, we will not have any inorganic contribution because as we already stated, 2026 is the year of the brownfield activity in terms of evaluation, banding offers, signing, closing, but we do not expect to have any significant impact that we didn't include any significant impact on the fourth quarter, for example, results of this year.

What we consider in the target is the already executed share buyback programs, meaning the Italian, the Enel America, 1 -- and for Italian buyback, we have considered a EUR 2 billion program executed.

Thank you, Stefano. Any updates on the distribution in Italy?

As you know, let's talk about the -- what is happening on the regulatory side is that I realize you probably have published much resolution where the deadline was postponed, but this do not change, let me say, the most important pillar of the degree and the definition in Tulo that is the extension of the concession. As part of the derisking of our plan, you already know. I have already stated that in the new plan of panel, there is just [ EUR 1 million ] dedicated to source the potential value of the one-off fee for the extension of the concession. Why we have used this figure because in a moment where it's difficult to imagine what may happen because we have the items of the final customer deal production. It's better for us to use a legal amount, [ EUR 1 million ]; and then to work in to invest and create value using the other [ billion ] that, as you know, we have put in the previous plan. So you have to create value and you have to generate an asset portfolio, investing the amount of money that do not -- are not excluded or embedded in the, let me say, EUR 4 billion, EUR 7 billion that was figure that was rounding into the market. If we put EUR 7 billion, then it's EUR 1 billion, we lost EUR 6 billion because then we have to recover. We prefer not to recover anything from this item and to work on investing this money on something that we have control.

Thank you, Stefano, for your comments. So now let's move from Italy to Brazil. Sao Paulo concession, could you please provide us an update on the process?

In the financial release, there is a whole explanation of the single step. What happened on the 7th of April was a decision that comes from Enel, and that is subject to our, let me say, counter deductions that we have until the 13th of May, and we are preparing a very huge amount of arguments in order to avoid any follow-up on this because as you know, we are 100% sure that there is no part of the concession contract that we have bridged in terms of, let's say, covenants, KPIs.

There were extraordinary events where we suffered because they were all the 3 of them, let me say, really the new world record of wind speed in Sao Paulo, et cetera. These are events that normally are deducted from the KPIs, exactly for the extraordinary of the weather condition. Let me say, we are confident that at the end, the investment, the dedication, the people, we have hired thousands of people, billions of investment, additional investment will be recognized at the end of any potential decision, don't -- keep in mind that we have approximately EUR 3 billion of financial assets that defend the value of the group and the value of our net assets in the balance sheet.

This is not to say that we have a minimum intention to look at this as a solution, but this is a very relevant production to keep in mind when we discuss about this topic.

Thank you, Stefano. A couple of questions regarding share buyback. Are you going to announce the remaining EUR 1.5 billion by year-end? And when are you going to cancel the share?

In both cases, to give you some, let me say, bureaucratic answer. You know that the share buyback in Italy have different prospect in 18 months maximum duration. So we will come back to the shareholder meeting to apply let's call it an extension of the duration for the EUR 1.5 billion of the nonexecuted amount dedicated to the Enel SpA share buyback. I will tell you that this is part of our trend. So we will execute this EUR 1 5 billion in the new terms and conditions that will be approved by the general shareholder meeting.

At the same time, we will consult for sure the shareholders because the shareholders decided in this way, and we cannot change this decision. We have no intention to change the decision. And the cancellation is mandatory to happen before November. So from now to November, for sure, the share will be concerned. This is part of the discussion that there are more illegal and reason why. So for sure, we will cancel the shares and for sure, this share will not exist anymore after November 2026.

Thank you, Stefan. Thermal Generation and Trading decreasing in the first quarter and set to decrease for the full year. Could you please detail the dynamics?

But as we -- I hope it was clear in the presentation, we have 2 completely different dynamics because historically, we report the thermal generation with the trading and gas long-term commodity contracts, they would sale activities, et cetera, starting from now because we changed the way of managing, especially the renewable portfolio and let me say, the trading position activities related to the renewable portfolio in Europe.

We are starting to give the separate information about what is happening on the wholesale and trading activity, what is happening on the generation activity. On top of this, and this is why we don't have a particularly affection with this volatile activity that is last year. We also as explained in the presentation, we recorded approximately EUR 200 million spike in the result that was reabsorbed along the year.

So trading, reducing, shifting the results of the trading also. Large part of the trading results of the past year 2025 is not disappearing in the position and trading value created on top of the customer base on top of the generation that we are using to maximize the value of the integrated margin, not to maximize a financial derivative activity that expose us in the past to dramatic and relevant negative impact. So it's not disappearing, and this is also there by the trend that you may observe looking at the integrated margin net of trading. You see that this is unexpected and also in the actual results, a significant growth that we are already regarding if we exclude the trading PVDs.

In the thermal generation, then we have some positive results coming from structural investment like Tucena and also coming from, let's say, long-term rearrangement of gas industrial provision. I referred to the Shell contract in Chile, where we completely changed part of the supply, and we were able to extract value from this renegotiation where Shell will continue to be our provider, but we, let me say, change some specific delivery activity that is part of the long-term relation that we have with Shell.

Thank you, Stefano. Could you please provide the building blocks for the following quarter to get to the EBITDA and net income commitment announced in the Capital Market Day presentation?

We have always the same question. So I will be very serious on this because I think this is really important, and this will move model and the projection on our future performance. So I will -- because talking about the balance 2 is also difficult for the adjustment and the volatility of the results. So I will drive you to the full year results, then you can play the balance to third quarter [indiscernible] on your own.

So starting from the business line split of EBITDA, full year 2026 integrated margin excluding the trading is expected to stay ahead of EUR 13.5 billion, including the trading we have [indiscernible]. Let's consider the trading is not financial trading, it's also trading of commodities. It's a huge contract that we have to manage, and we extract value from this. What we referred in terms of discontinuation is what we trade on the renewable generation and the customer base use as an option.

The year-on-year performance, if you apply the [ EUR 10.5 billion ] you will see that is improving on a year-on basis. This comes from an improvement in Latin America and this is due to the softened seasonality on curtailment expected in 2026. In the weaker resource availability in 2025. Again, Iberia, on both retail and supply business, we expect a positive contribution, also for the more rational approach on sales and the visible improvement of the spot power and gas scenario, giving benefit to the Iberia results.

On the other side, networks will land in our expectation to an EBITDA that will be higher than EUR 9.5 billion, having ambition of 9.6%, 9.7% at midpoint, but you also have to say higher than 9.5% because depending on some regarding one-off mine or regards to one-off, we would have EUR 100 million higher lower results, but we stay on the 9.7% as central guidance for the network.

In terms of rate of growth that is important for the network business, we expect to maintain a high single-digit growth in Europe thanks from 1 side, the normalization of the positive recovery that we have in Edesa that we stay, by the way in a double-digit full year growth. While in Italy, we expect to have, let me say, a solid and consistent double digit -- high to single digit growth year-on-year. Finally, in LatAm, thanks to an improved macro scenario and also the expected tariff indexation to come, we will confirm the double-digit EBITDA growth expectation that we already experienced in the first quarter.

All these changes were to apply to ordinary results with no adjustment and pro forma that reduced the published 2025. I say this because in the past, we are obliged to restate the results, but just for the disposal of our assets, we are not making any adjustment for accounting reason or comparison reason. We start from what we have approved in the 2025 full year results and we will confirm the growth that we have announced in the Capital Market Day based on the pre-closing results that was exactly in line with the final full year results.

When we move to the net income, I think that it's also positive outcome. The significant reduction in 2026 due to the low contribution -- the lower contribution of the trading and commodity EBITDA and subsequently net income. It's better to look at the existing first quarter 2026 net income. And to elaborate on this because decently, we may discuss on the spike that we had in the results of 2025, more than the expectation that we have on 2026.

So if we start from the EUR 1.9 billion of net income of this quarter, we expect in our projection to stay at EUR 1.8 billion per quarter, having this figure at the floor and you can make an easy calculation to reach our 7.3 midpoint guidance. Quarterly results then will depend on seasonality on power and gas consumption. Second quarter, for example, is a low consumption quarter both for power and gas.

While for example, in the other part of the world, Americas, weather would be the most important driver, [indiscernible] Southern India and Colombia. But keep in mind that the recovery measures that as prevention of a secure potential headwinds that we used to include in our projection, as you probably have the opportunity to see in the last 3 years, make us confident that the resilient base that performance of our asset portfolio will deliver the full year guidance shared with the market also facing some headwinds, let's say, the cost in Brazil, the continuous growth of the ancillary services, for example, in Spain, that we have this time budgeted, and we have, as I said before, put a recovery measure, the hypothesis that it will continue and this is continuing affecting our retail performance.

Thanks, Stefano. Let's move to retail. At the current level of share rates both in Italy and Spain and how is affecting your margins?

But if we look at the churn in the retail and especially in the residential customer in Italy and Spain, you see that this is something that is completely crazy in the retail market because where we supposed to have the lower price in Europe, we have 35% of market churn rate. And in Italy, where it's supposed to have the higher price, for example, Enel have below 20% churn rate. So it means that probably price is not the unique reason to change the service provider. In Italy, as I said before, we are continuing to reduce the churn, again, because it's not EUR 5 per megawatt, that means EUR 10 per year that change -- make the decision to change the provider, but it's important the full relationship that you have with your provider, also the bundling of other services like the fiber, like the gas, and we will come with other services in the forthcoming quarters of this year. This is a really important loyalty instead of EUR per year or EUR 10 per year change in the consumption in the price coming from the consumption of power. But let's move to Spain because it's more important. In Spain, we started to change our commercial policy because the 35% churn rate is a clear result of the commercial policies that have something to be changed, and we have identified what we have to change, and we are starting to change from this second quarter.

Probably this may affect in the really short term, the net debt, but for sure, will not affect the results on both revenues, gross margin and especially net income for more than 3 months because the channel that we are restructuring have a churn rate that if you can imagine that is the worst churn rate in the average, we arrived to have 80% of churn in 1 year. So it's not a commercial channel is something that has to be, let me say, dramatically restructured and this is a sign also for the other players in the industry that we cannot make our money destroyed while we have to face a complex industry scenario. We cannot have these guys making money on top of the customers and top of the energy provider.

Thank you, Stefano. Let me double check. Yes, brownfield opportunities. 6 gigawatt of brownfield opportunities in renewables. Do you prefer a particular region or type of assets? Do you see any execution risk?

On the execution risk, I think it was clear that we cannot say that we have no execution risk where we have execution risk on anything that we plan. For sure, we have no more execution risk in brownfield and in greenfield considering the situation of the map. And this is why we strongly drive our investment into the brownfield opportunities.

The brownfield opportunity is not just saying that we have preferred the U.S. and the U.S. that have the opportunity. And the U.S. is the market that show us that there is an opportunity also in terms of future evolution of the price scenario because it's where the demand is really growing. We have some signs in Europe in the last 2 months, Spain and also Italy, but in excess, everybody was that's great for the consumption. Now everybody is saying that the consumption of the data center will explode, but we have not just the data center. We have a lot of reasons why we have a lot of opportunities.

So U.S., for sure, is the first target that we have. But we are making nonbinding offer and more also in Europe, Tier 1 countries, as we say. Then we have to look at where there are the opportunities, the most of the opportunities are in U.S. We have smaller opportunities that we are working on also in -- especially in Europe and in Germany, in other situation opportunities.

Thank you, Stefano. So there are no more questions. So the Q&A session is over. I think we cover all the main topics. But if something is missing, their team is available for follow-up after the call. Thank you, everybody.

Thank you, and see you soon. Bye-bye.

Good morning, and welcome to Enel Capital Market Day 2026. Thank you, everyone here in the room and to people connected online. I'm here today with Enel's CEO, Mr. Flavio Cattaneo; and CFO, Mr. Stefano De Angelis. May I have the agenda, please. Our CEO will drive through the planned strategy, while the CFO will go deeper in financials. After the presentation, we will have a Q&A session.

Now let me hand over to Mr. Cattaneo. Please?

Thank you, Omar, and welcome to our 2026 Capital Market Day. Let me start with the results we have delivered so far. Over the past year, we have executed all strategic actions we committed to delivering on every single target. The turnaround of the asset portfolio has been completed. Financial discipline has restored flexibility and improved. [Audio Gap] selective [Audio Gap] into net income has improved, reaching 30%. EBITDA increased by 5% per year and EPS by 9% per year. So far, we have implemented all the actions needed to improve group performance.

Today, we present the next chapter of our strategy built on a proven track record and on our ability to [indiscernible] [Audio Gap] delivery. Indeed, during this mandate, our market capitalization increased by almost 50% [Audio Gap] of the energy [Audio Gap] external [Audio Gap] grow shareholders through dividend and share buyback as promised. We promised we delivered it. What we're showing today is achievable.

Now we move on the energy context before focusing on the strategic drivers of our plan. Our vision is based on the trend of structural long-term growth in global power demand, mainly driven by data center and AI, electric mobility, robotics, automation and industrial recovery. This is a global trend, but actually growth will be different by geography and timing. Therefore, it's crucial to be fast in anticipating and exploiting local acceleration. This is why we are ready to deploy investment in [indiscernible] at the right time. Some areas [Audio Gap] are already showing [Audio Gap] in U.S., for example, [Audio Gap] after our demand [indiscernible] driven by strong [Audio Gap].

Once electrification starts, the change is sudden and fast. Our industrial vision is to increase investment in renewable generation just before markets accelerate, quickly adapting our move to market cycles. In fact, the growing gap between supply and demand in some markets will generate value creation opportunity for us. Being the first mover will catch 2 remarkable goals at once: improve our marginality and denounce our asset value. Indeed, we'll mostly leverage on brownfield opportunities with a faster time to market as demonstrated by the recent acquisition [indiscernible] megawatts.

But why we think the market is mature? Because as you probably know, some utilities have already communicated the start of a robust asset rotation phase. Additionally, private equity funds are also starting to rebalance their asset portfolios. Given this evolution and considering our financial flexibility, we're in the best position to capture the maximum value.

Now let's deep dive into our plan, please. Today, we'll present our strategy for the next 3 years and a 5-year pathway. We have already taken into account the full potential impact of the energy decree in Italy. On this matter, Stefano will give you more detail later on. So going forward, all the news will be either positive or neutral. Having said that, we'll start.

As you know, our habit is to go ahead and maintain our targets. As I said before, now we are ready to accelerate growth supported by our financial flexibility. We'll optimize productivity by improving capital allocation and generating further efficiencies. In addition, we focus our investment in opportunity with visible returns. This will allow us to improve our EPS profile, while maintaining our strict discipline.

Now we move into capital allocation, Slide10. In our previous plan, the need to reduce debt and achieve a robust balance sheet was the priority. Today, we're moving to the next chapter. Now after the financial flexibility, we are focusing on growth, maintaining a solid level of leverage, for sure below sector average. As you can see from the slide, financial flexibility will be allocated to brownfield to quickly expand the asset base where opportunities arise, reduce the execution risk and accelerating time to EBITDA, selective greenfield asset in renewables and grids and the last but not least shareholder remuneration.

Moving on to our CapEx plan. As you can appreciate, cumulated investment are now EUR 53 billion, increasing EUR 10 billion versus previous plan. In renewables, we'll allocate capital according to returns, always selecting projects with a secured earnings profile through long-term PPA or covered by our customer base. We'll invest also on customers to reduce the churn and increase loyalty. As a consequence of these actions, all the industrial KPIs improved and the predictability of our result is comparable, if not higher, to a pure infrastructure company. Value creation going forward is visible also due to our low risk profile.

In this slide, you can appreciate our capital allocation and strategic choices, ensure over 90% of our cumulative EBITDA remain protected and visible. As I mentioned before, all the impact coming from the decree have been already factored. This is reflected also in our FFO, more than 80% denominated in euro and U.S. dollar, significantly reducing cash generation risk. For sure, we can't overlook efficiencies. The result of our actions are already visible. We have been able to execute the 2023 efficiency plan 1 year in advance. Last year, we raised the bar, and now we're retargeting a 25% decrease compared to the 2022 baseline.

Efficiency are front loaded and will enhance our profitability. On efficiency, we'll leverage also on AI adoption. We had 100% of application cloud based and all core processes digitalized. Another lever of value creation is data centers. As already said, one driver of higher demand will be data center. Being a key integrated player in different countries, we have a remarkable competitive advantage. Indeed, we can offer data centers operator ready to build site and a fast permitting process.

Like other European players, we not only sell infrastructures but we can also offer connection with PPA included. We have already identified a strategic location, some of them are ongoing.

Now let's move to our customer strategy. We are [indiscernible] focusing on [Audio Gap] but also other services [indiscernible] for example. [Audio Gap] to increase value of our [Audio Gap]. We are able to [Audio Gap] user-friendly digital company. As a consequence, this new commercial strategy will boost customers' value and reduce risk.

Now we move to our planned target for the next 3 years. As a result of all these actions, we expect to achieve a further rerating in the group performance. Looking ahead, results will be [indiscernible] continue to grow at sustainable increase at a CAGR of 7% versus 2025 restated. In any case, you can appreciate that even considering the worst-case scenario at the end of the planned horizon, we will reach an EPS in the range of EUR 0.80, EUR 0.82.

Let me now hand over to Stefano for a deeper financial [indiscernible].

[Audio Gap] in order to [Audio Gap] negative amount of [ EUR 200 million ] and [Audio Gap] government [indiscernible] suppose, let's say, subsidy scheme for the operator that was now reintroduced in late 2025.

Then as Pepe Bogas remember very well each day, we have the 2x growth of the ancillary services bill in Spain that -- a fantastic bill of more than EUR 200 million, not just for Endesa but for all the players of similar size. Not being enough, we were also very negative here in terms of hydro performance of hydraulicity. [indiscernible] also in Chile, where they [Audio Gap] radical change [Audio Gap] performance achieved, so that was a growth of 9% [indiscernible] the start, let's say, in this way because I see a lot of adjusted performance here. And let me say a 9% growth, I want to underline because talking to you, sometimes, I understand that it's not probably so clear that we were the [ unique ] of presenting, let me say, high single-digit growth last 3 years in terms of everything, reducing our net debt.

We moved from [Audio Gap]. So this was a result of the several action [indiscernible] here, some of the most probably relevant [indiscernible] during the completion of the disposal plan, we find here that was launched in 2022. We were that -- is that slide [indiscernible] probably. No, no, no, sorry. When we look at the reshape of our portfolio, for example, you may remember the focus that the company had on analytics products and services. Now you may see that we have completely reshaped that portfolio.

We experienced a financial -- a relevant financial dream from debt activities and now the portfolio is completely moved on core business and core geographies. The efficiency plan was, as you remember, front-loaded, and we are now launching a second stage that we are calling not efficiency but productivity. Part of these programs was achieved, we have Mr. [indiscernible], thanks to a strong reduction on ICT cost, more than 30%. And achieved not only cutting cost on CapEx but with the shift to the AI software solutions and cloud native platforms, that will be the base for the next stage of the productivity plan because this is something that is progressing along the [Audio Gap] is that we do not make the results using the saving as part of the EBITDA.

We use this money to increase the size of the investment. So the result was a result made from investment from savings. And you may see that in the Capital Market Day 2022, the company approved the at CapEx plan of EUR 37 billion. Now we are approving a CapEx spend of EUR 53 billion. And this will be the boost of our growth that we are presenting today, and this is the result, and we are in the condition to present this CapEx plan because of this action that was made each day, by also the persons that are here with me was very tough. We want to present a very fantastic plan today than we did [ agree ]. Unfortunately, we have to spend some time again in trouble.

So the growth that you may see in the slide, on Page 22 is a growth based on 3 stages. The one is the growth that was presenting last year, then there is the overperformance that we realized. You remember that in 2025, we have an overperformance in the net income when we look at the guidance. And then there is the trigger of the EUR 15 billion of releverage, and this is distributed, EUR 10 billion in growth acceleration capital expenditures.

Part of this in brownfield, part of this in greenfield, full dedicated to what we expect will be the driver of growth in the future that is renewable capacity. And EUR 3.5 billion today share buyback we are performing, we will start today another step of the share buyback of the holding company Enel SpA. And we are maybe -- is progressing in the Endesa share buyback. And we -- as you may remember, we already performed share buyback in Americas.

Next. So what would be the results we are expecting, looking at our business unit and countries with this new plan. We have split the world into Taiwan regions networks, integrated margin and LatAm networks integrated margin. As you may see, we are in full of our potential in terms of CapEx, both for integrated margin and both for networks in Taiwan. We are full at our speed -- at the potential speed that we made use in LatAm for the networks.

When we move to growth elevation, as you may see, we have full power into the integrated business, namely the renewable capacity, great focus in the U.S. where we see the potential for an anticipation of the growth we see in the market. And also, when you see 3 or 4 in the networks in Europe is also because in Italy, as you know, we are already at full speed in terms of investment while we expect Pepe Bogas to accelerate beyond 2028.

As a result, we will have a balanced growth in terms of EBITDA. We will expect to increase our EBITDA more or less EUR 2 billion in the integrated margin and EUR 1.2 billion in the networks. The investment, as you may see, is well, as Flavio said, [indiscernible] was split between networks and integrated margin.

Next. More than 75% will be invested in Europe, I'm referring to the networks. And here, we have also a focus on Italy as always also because the other company that had listed, we'll better explain the CapEx plan in the company. What happened in Italy? In Italy, you may see that we have a growth of EUR 7 billion in the RAB, the lower part of the slide. This growth was EUR 6 billion in the previous plan. The question that would be how much is the network fee. The network fee is -- the risk in this plan is just EUR 1 billion, but we have included the industrial CapEx that we transform into RAB. As you may see, the industrial CapEx have a very good shape in terms of transforming into RAB. So you have a better performance with the same amount of CapEx.

And let me say, we have the items that we cannot secure that is the amount of the fee. If it would be more happy, it would be this figure. We are completely okay because we look at the total amount of CapEx results in terms of RAB and EBITDA. The reduction in terms of grants is another positive for the RAB because the grants do not transform, we have a marginality on the grants, but the grants will come back as cash as RAB. So in the 3 years of the new plan, we have more than EUR 1 billion of positive effects in terms of RAB transformation for the reduction of the grants.

Next. These are the CapEx for the -- this is where we have, let me say, the re-rate of the CapEx. We have EUR 8 billion more of the CapEx in the generation. I think, here, Flavio has told you many things relevant to what I can tell you is that we continue to have a very strict financial discipline of this. We don't want with this target to move our close metrics of risk balancing approach. So we will continue to look at the basis points, having 200 basis points when we are looking at brownfield because as I probably told many of you, we adjust this result because we take into account the reduction in terms of risk. When you have the plant already built and when you have the PPA already signed, this cost something and will reduce approximately 100 basis points.

We maintained the 300 basis points on the greenfield. And this is a plan where we come back to build, let's say, in this way because now we have the condition in terms of pipeline, we have made a very hard work also on the pipeline to reduce what we're not presenting in the future potentials. Now the pipeline is small, but it's very good. And we now find [indiscernible], for example, project in [indiscernible] that we are near to the final investment decision. As a result, you can see the strong growth in terms of terawatt hours. That is the base of our growth in terms of revenues and EBITDA.

Page 26, this is to say, I read some of you saying, when you have brownfield, you do not have the control of the growth. This is not the first deal we made -- we announced in this last week. And just to remind that, for example, in the last 15 months, we made EUR 3 billion of acquisition, and we were not with the same intention that we have today. So as Flavio may remember to you, when we say something because we are very confident to do it. We participate to a huge number of processes in this month. We continue to be strict, and we are not in a hurry. This is important.

And when we look at the presentation of our friends, I talked about the utilities, I see EUR 14 billion, EUR 10 billion of asset rotation. On the other side, we are a potential buyer. And my figure is small when compared to them. And you do not see the funds. The funds are rotating a lot of capital, especially in the U.S., where we have big size of investment from the equity funds. The approach is the same using this result.

What is important here is the green part of the line when we buy something brownfield in U.S. where we experienced several problems, we buy contracted NPV that is what we call secured. This is what we call secured, not secured because we expect to sell something. It is secured because we have a contract that our friend Francesco Puntillo revised very strongly, I can guarantee you. So when we are ready to sign, it's really secured EBITDA and secured cash flow in our plan.

Next. Here, we start talking about what happened in the last days. You know that when I was introducing the other friend, [ Mr. Ceppatelli ] is the energy manager in the group. We discussed a lot of time about the new, let me say, energy management model when -- now we prefer to sell the energy not through financial derivatives that we continue to use but to our retail customers, Francesco Puntillo. That is where there is the value because it's not the price that changes every day, it's a price that has a fair margin because we have a lot of cost to repay it.

And these customers are in a resilient because they have a churn that tell you that they stay in the average 6 tier in our customer base. And in Italy, for example, in Spain also, well, we don't have PPA market, we don't have PPA market. It's very important to leverage on this customer base. This customer base -- have 70% of them have fixed contract where the price is an option for the seller, they have the option to sell, clearly. So I think it's a fair relation.

When you look at the building block of what will happen in terms of volumes of energy we generate, this generate is matched with the existing customers, and existing customers today start to have 2, 3 years contracts. So it's not just 1 year now. This is something that Enel plays in the market, but also our competitor. And then you have the churn. So you have the new customers. What does it mean? If you look at the graph in the low left, this means that we follow slowly the market. We don't follow the market in this way. We follow the market in this way. You see the gray line means that I have a delay because today I signed a contract with some of you, and I used the pricing today, and you have a 1-year mandatory period of the pricing -- is mandatory for me, especially. Remember that the customer is always the potential exit of the churn.

What happened in these days -- in the last, let me say, 2 weeks. In the last 2 weeks, we have a dramatic change, look at the forward 2027, 2028. And this is important, I have completed, to say when you [Audio Gap]. Today, the market already embedded and this started before the decree exchange in the forward scenario.

Now we have moved into a scenario where we exchange the mind related to the EPS, but not because of us, because of the European community and not just before because of the Italian government. There is now a clear intention to review EPS, probably smoothing the growth in the next year. So when we was referring to an EPS of EUR 120 million, EUR 140 million, now we are referring to a lower level of EPS. And this is what we make in our exercise. Sorry, but this is the most important one to explain.

Next. The impact, you may study, I will not pass through the figures. This is what -- the ERAP is very easy. It's more or less EUR 150 million per year. The other -- at the end of the day, it will be EUR 300 million net income impact in the worst year, that is the 2028 -- sorry, by the 2028, we do not have ERAP. So it's very complicated to make this calculation in terms of some, but remember, in 2028, we have EUR 300 million in terms of net income, but we will not have the ERAP impact because it's expired measure in 2027. What is important, we had EUR 2 billion of cash impact. We already introduced some measure in order to reduce this at EUR 1.8 billion.

Next, please. So this is a plan where we have built each single building blocks. It's not how we will do EUR 10 billion. So in this slide, you may study later and ask Omar. I try to simplify our plan, that is a plan made by the list of actions, each one of these guys and also me and also [ Ralph ] our duty in order to realize this plan.

Here, you may see, for example, impacts like -- I make a description of the greenfield, brownfield target. You see that here we have specific plant like the U.S. [indiscernible] project, we are going to approve in our committee probably in the next couple of months. We have the best that we are building in Chile and so on. So we have a very complex list of action. We have -- this is important. There is our plan taken into our figures, the decree. Because if you look at our plan, one of your question, always what do you think about the potential change in the pricing the retail market in Italy.

Now we have assumed a significant reduction of this because we lost the floor of the ETS. And again, as I said before, we also want to reduce, let me say, the risk, the lack of control we have on the fee -- in the network -- concession renewable renewal in Italy.

Next. The funds allocation, it is always the same slide, approximately EUR 50 billion of generation made through the FFO. EUR 9 billion coming from the -- also, we have asset rotation. We have more partnership because when we buy a portfolio of assets, sometimes we have -- they want to stay with us. So it's a sort of partnership that is embedded into the deal.

The investment and the shareholder remuneration, Flavio will tell you in 2 minutes. I grant you what is the dividend policy we are going to apply the different -- the white box is the increase in debt that is approximately between EUR 15 billion, EUR 20 billion.

Next, please. [indiscernible] when you take the [indiscernible], it's always the same story. We stay into the holding controlled financial plan. We continue to have a very reduced exposure to variable rates and very reduced exposure to currency that is not euro and just a portion that is related to the cash flow of our LatAm asset and our U.S. asset.

I think that with this one, I have completed, and I can move back to Flavio.

Thank you, Stefano, for very clear presentation. Well, we are confident to restart and deliver visible returns. And also, let me say, also completely derisk this plan. For sure, we have today a low risk profile -- a better low-risk profile in comparison with the previous one.

So our dividend policy remains unchanged. The visibility on '25 give us confidence to propose to the next AGM a DPS of EUR 0.49. Furthermore, the remaining EUR 2.5 billion on the share buyback program are an additional lever to further enhance shareholder remuneration and, as you've seen, we have just launched this morning another EUR 1 billion trance. Moreover, as you can see in the slide, in 2028, our EPS will be in the range of EUR 0.80, EUR 0.82, and the DPS will grow accordingly.

Now let me show you our trajectory to 2030. As I said before, we're showing here a snapshot of the 5-year trajectory. Looking ahead to 2030, in generation, our renewable capacity is expected to grow at a CAGR of 5% and our grid regulated asset base will expand a CAGR of 6%. The leverage will remain below peers, and we'll continue to deliver sustainable growth beyond the 3-year horizon with an EPS CAGR of around 6%, all this maintaining our net-zero commitment.

Indeed, we have already reduced our total emission by almost 70% since 2017, and we are already close to the target set for 2040. In 2040, 100% of our power generation will be greenhouse gas-free. Our commitment to net zero, we also preserve the social and economic context due to our just transition plan.

To conclude some closing remarks. Today, we are presenting a challenging plan but credible and achievable. It's a plan built to restart and deliver further growth. We've also always overcome challenges. We revised our assumption and will deliver once again. Going forward, you receive only good news. Once again, we've not disappointed you.

Let's open with the Q&A session.

Thank you. Let's start the Q&A session. Since we are short of time, please keep your question focused on strategic topics, no more than 2 questions each. I will take 3 analysts in a row. Before asking your question, please stand up, state your name and company name. So Alberto, Javier, Emanuele.

Alberto Gandolfi, Goldman Sachs. I'll ask 2 questions, and if it's possible, yes, and no from Stefano, so it's 2 and 0.1. So the first question is you're obviously using your balance sheet, but -- and I can see that most of your CapEx is going towards developed economies. Could you use also a bit more of your emerging market portfolio as a source of funding as a currency to accelerate the current strategic vision you presented very clearly today?

The second question is, could you tell us the gigawatt, please, which is related to the 8 sites that you are negotiating for data centers. We have seen recent transaction at EUR 1 billion per gigawatt around Europe. So I was wondering.

And the yes or no is Slide 29, you have a waterfall. This is for Stefano, EPS going to '28. Am I right in assuming that you're using current forward curves and EUR 300 million, EUR 400 million impact from the decree? Just yes and no, sorry.

Javier Suarez, Mediobanca. Three -- two questions from me as well. The first one is on Slide 27. When you are showing your expectation on evolution for electricity prices, could you be more specific on the assumptions that you are making on electricity prices in Italy, Spain, maybe key jurisdictions when building up your business plan? I'm interesting to see how are you assuming lower ETS prices impacting your electricity forward curve during the next year to come.

This is a question on the numbers. Then the second question is maybe for the CEO, strategical one. What do you think are the likely movement the European Union may take to give Europe with more competitive prices? There has been discussion on possible changes in the marginal pricing system. You think that that is a road that the European Union may take and the implication for any of that change.

And also I'm interesting to see on your proposal to make electricity price in Europe more competitive for industry.

Emanuele Oggioni, Kepler Cheuvreux. My first question is on renewables. You seem you are going against the tide, now increasing the CapEx as compared with other peers. So the question is the -- what are the drivers of this shift compared with the previous plan and we should increase the CapEx in regulated networks. So you are offsetting lower returns compared with the past, lower IRR, et cetera. This is the first question of these changes in strategy in renewables.

And the second question is on the strategy in data center. So you could add more color on what will be your strategy? Previously, you mentioned using the previous plan and asset-ready model. So what is included in terms of CapEx, EBITDA, et cetera? And what is the main drivers of the revenue model of this part of the plan?

Okay. So we can start from Stefano.

So just to answer to the yes or no, it's not easy yes or not, but let me say that we -- as -- the most important thing is what is written there that is we have derisked, let me say, our projections in Italy because it's -- and I'm also answering to the other questions. We do not sell energy in Italy in the bull market. So let me say the scenario for us, it's an indication.

We look at the calendar just because of our activities in terms of pre-hedging, but we sell the energy, we produce, we generate 22 gigawatts of renewable energy in Italy, and we have 22 gigawatts of sale, fixed price to B2C as small, medium enterprises. So we do not sell energy spot price. We use the calendar, we use the spot price to optimize our energy management.

Regarding the LatAm, we have mentioned in the presentation our availability to use the asset rotation. We don't exclude on top of this plan, the shift in some capital from south to north America, even because this is another move to derisk our capital allocation on top of our capital.

Second question regarding the evolution price, the ETS. I don't think that Spain has particular risk because you have mentioned also Spain. We have Pepe Bogas, but because the component after the breakout is a little bit more the component of thermal production. But the Spain is in a long position, get produced without thermal. The thermal is very minimum. It's only for the security of the system. The impact is by 0 because it's gas-free emission, nuclear, wind, solar, hydro, as the problem is completely different.

And also the morphology of land of Spain give a possibility to expand again in renewable. In my opinion, this country is quite -- very limited the impact on the ETS. Different discussion for Italy, for Germany, but France because there is total gas-free emission, but they need maintenance of the nuclear plant, you can -- it's possible to create some situation.

In any case, we have assumed EUR 85 looking forward. As I said, Stefano, Enel is in a short position. We produce less than we sell in Italy. The question was Italy, Spain. Those are the countries -- we don't have any position in other country in Europe. I think the discussion can start, but our -- today, we want to show to the market a plan with no problem when there's an element. If it would be better you have a good news, only good news because we have included all the negative effect. This is important because -- it is important for our shareholders, but also for the management because today we remain concentrate for our growth.

Obviously, the discussion will start because the element, the ETS is more also in Germany, not only in Italy. But regarding essential some categories of industry, only the industry that pay the full price. The other pay the bill at the end. And for example, in Italy, you pay the component of the grid, is one of the most cheaper in Europe. In any case, I'm not politician. I see the number.

Also, we have data center [indiscernible]

No, there was a question also on the -- it was trying to read that we are not believing more in, let me say, networks, I don't remember, but now we are moving to renewables. This is not -- we have saturated the CapEx potential in Italy. In Spain, we are discussing -- they are discussing in order to increase the cap, and in Latin America, we are also including all the cabins that is sustainable and needed for the quality. And we are investing EUR 26 billion. I remember that some years ago, we had a complete plan, 3 years, that was EUR 37, including all the business segment.

We invest in renewable also because we have to remember that the return on renewables is good. It's 200, 300 basis points in networks. We are around 150, 200 when you have premium remuneration. Don't forget that this industry experience a problem with the return because they was not visible in the renewables. That's why we underline strongly our approach to the -- for example, to the brownfield activities.

For data center, you have 3 potential that does enter -- play in your field. One is the data center that is the booster of the demand, fantastic. I don't need to -- but - with it, I don't need [indiscernible], but we push the demand, and it's positive for the market, okay. The second is the data center that want my connection, that was my side because I give time to market. This is what we like to explore, you have 2 model. That is, one is [ LWE1 ], that is spot sale. This depends on how much money and the net present value of the business plan.

What we prefer is to have a structural relation, but it's not the structural relation that you may have with the role that is the buyer of electrons. This is the worst customer you may have. When I say I will sign in the PPA, I imagine the price because we know that is the boost of the demand, so we make a bid, and we received very good pricing. So I prefer to make contracts with smaller players than the -- I want to partner with him for my value-added component, not for the stupid electrons that made just a bid for price. So it's good. But in this case, we will not pursue this kind of data center partnership.

Our proposition is we have the site. The site, in many cases, is already connected. This is the value because the timing, expectations for the new connection is [indiscernible] in Italy. In addition, we have a good relation with the local authorities for obtaining permits and other things. If you compound this by the price of PPA is, let me say, not significant and significant, but they give us also the -- enjoy more money from the electricity because they obtain the possibility to start more rapidly rather than other solution. This is our business proposition.

So second round, so Francesco, Roberto and Peter.

Francesco Sala, Banca Akros. The first one is if you can give us an update on hydro concessions in Italy. There has been a lot of noise in the last few years. So I wonder whether you can give us an update.

And second, it seems to me that in your plan you have included some outperformance of your electricity sales prices compared to your assumptions for the Italian electricity price. So I wonder whether it's a function of your energy mix or your hedging policies.

Roberto Letizia from Equita SIM. A couple of questions on the perimeter of the strategy plan with regards to the extension of the distribution concession as an example. So how do you treat it within the plan? Is it assumed that you're going to have it? Or is there an optionality that can generate additional investment opportunity when it comes? So just wondering to understand how you treated that?

And also if you can clarify how do you treat the hydro concessions in LatAm, for example, for what we heard in the last weeks?

And then very quickly on this thing also on the assumption. Is the EPS target that you provided, including the whole implementation of the buyback or just a part of it on the assumption as well, you presented the EUR 85 per megawatt hour price in Italy, but last plan that was in the region of 90% to 95%. So basically, you reduced EUR 10 per megawatt hour assumption for Italy. Is that the order of magnitude of the EPS impact that you embedded in the plan?

Peter Bisztyga from Bank of America. Two questions, if I may. First one, you talked a little bit about AI and how you intend to implement that in your business to reduce costs. I'd be grateful for a couple of practical examples of how that might work. And also, do you see any risk from AI in your retail business from the perspective that it could actually make competition harder or make it easier for customers to switch, for example?

My second question is going to the waterfall chart showing the impact of the energy decree on your earnings. You show a EUR 400 million impact from the ETS and gas measures. Could you work us through the math of how you get to that EUR 400 million? What sort of impact on retail power prices are you factoring in?

Okay. So we can start from all the questions regarding assumption with Stefano. The question regarding the assumption.

Again, in our EBITDA regarding the power in Italy, you have to look at the scenario as a reference for the cost of the sourcing that is the base for the pricing of the retail. So differently, we never find the math. So Francesco, price [ has plenty to do ] than the other. What you look. You look at the forward because you have to cover your energy. We have the energy. So we also think about it, but we have to think like our competitors. You look at the calendar as a reference, we know that the calendar is not the future price. It's not the budget. In the slide that I had before, but that was talking a lot as always. You'll see I put the year minus 1 year minus 2 observation. I don't know if you can put the slide of the pricing that is very important.

You see that the calendar have -- now that we have a situation back to normal, let me say, in the last 3 years, you may see that each curve 2028, 2027 and 2026 have the same direction. They grow when they approach to the present day. So what do you mean? That 85 will not be 85, if I'm perfectly okay with the figure, it would be higher as it was higher, you might look at the slide later. So that 85 is for us. The base in order to check the potential price that our customers may have in the market because we are the unique player in Italy that have 100%; more or less, we are a little short of the energy.

But we do not have to make the mistake that I experienced of 20 years of considering the plant and the garbage spent in the best -- as something that is already spent, so I moved to the margin because the margin for us is very low. So we have to consider pricing made by Plenitude, made by Octopus and so on. So when I was referring to the -- look, 78, 86, 91, 97, 106, 110. This is the reality coming in the field. So the calendar in this world are -- when you look at 2 years, it's not like the financial market here.

The generator want to cover the risk of the price. So they ask for the coverage and the market created a backwardation. It's not an expectation, it's a technical difference between demand and offer because we don't have PPA in Italy and in Spain, the PPA that we need. Nobody wants to sign PPA in Italy. You know why? Because the price is higher, they expect that we will blow not because the price is not good because that was not signed in PPA. Also because when the price was at EUR 60, why didn't they sign PPA because they always want to stay on the edge of the pricing curve and work on derivatives.

Also in the other side, [indiscernible] Telecom was responsible for Energia. It was the company that Telecom Italia created to manage the energy. It was doing derivates, the same activity more or less than [indiscernible]. So don't think about the U.S. market, PPA is it's a story of financial -- a finance guy playing the arena of the energy, making price through a financial approach.

Now the market has completely changed because the retail. Now look at the price, they look at the advertising, they try to understand the energy that is very complex. So when you look at 85, you have to keep in mind what I have to reduce the expectation of the retail price because we do not have any more the floor of ETS. the floor of ETS was my compatible, we paid energy approximately EUR 100 because they have to secure the result with spread for repaying their cost to acquire, their cost to serve and they have to cover the risk of the calendar, okay?

So what we have done? We have accepted that the ETS will not stay at that price. It will not be EUR 120. So the energy price will reduce. Either way, that is a proxy for you to understand of the EUR 85, but the price of Francesca, that is the blue line, I will not tell you, but not because of you but because of my competitors.

Regarding the hydro, I answered 2 questions. One regarding hydro concession and the second one, the grid concession, but first of all, let me say, our hydro concession expiring in 2030. There is time. Have you seen our local municipality and Edison had signed an agreement with [indiscernible]. Now I don't know the evolution of this agreement is a green based on new concession and they stabilized a certain price for certain categories of industries.

We wait and see, but we have not particularly worried about it because the evolution -- the timing, if no, the history of the SME sector, also the evolution and the volatility of this sector, government need to low price. Then when the average low price need high investment because it's not sufficient the low price because there is short of energy. And then when you have invest in CapEx, the price going up and they need another version of the cycle. It's -- 20 years is the cycle, you know the country.

Concession for the derisk activity, we have put only EUR 1 billion because in our meeting with our shareholders, the discussion based on how many you have considered as fees for the renew and when we have put EUR 1 billion, we have reduced also this risk because there was another risk on top of that.

Regarding LatAm, remaining only one discussion because in Brazil, all the other Serra, Rio de Janeiro are more or less completed the renew with no expenditure apart the CapEx for maintaining the concession. Remain in Sao Paulo, as you know Sao Paulo, we have had some trouble but all the -- our legal department and our subsidiary give to the authorities our ability because in this last year, we have a recovery of 50% of the quality of service. Of course, there is a particular situation because the infrastructure, the cable in Sao Paulo. Sao Paulo is -- there is not an underground cable, is completely on air and is into the tree, not close, not side. This is impossible because there is a storm, there is a special situation, it is impossible to avoid blackout.

This case, we have, I think, a good discussion for propose to them a definitive solution, final solution for avoid this problem. Because in our opinion, it's not probably in P&L. In this case, if they remain in this kind of trees, it is only one able to manage, but it's not human, it's Jesus Christ because it's not possible, otherwise avoid the blackout. And it is important to understand that when you approve the CapEx, you need time for the implementation and other things and not always this time match with the expectation of the population.

Taking in consideration today, they have the election. And no one of the party want to be involved in the discussion related to the blackout. At the end, we think we have in the right party. As I said in the last 3 years, we have to find a solution for Sao Paulo.

Taking in consideration also that the Brazilian law considered in this case, for the asset, the RAB is about EUR 2.5 billion, the RAB, but the concession regarding only the asset of the company. This is an additional value regarding other share with generate or other. And the people and in this case, the valuation is much higher for a complete revision of the situation. And also in this case, we think we have done a complete risk for this investment in LatAm, I think.

And the AI one [indiscernible] opportunity.

But I don't see particular risk. We have 100% of our service then if one explains surely. But we have opportunity, for example, for the call center. Our digital company, LENE, we have just launched. Taking in consideration they have only one person for the call center. All the rest is completely managed for AI. Call centers, we give the service not with our employees but the external supplier. And for us, it is an opportunity. Of course, at such level, there is a risk, but this I don't think is for Enel, but for the country in general, because many kind of jobs are under risk in terms of number of occupation. If you explain surely, do you have a micro -- is that a microphone? [indiscernible]

As you have seen in the slide, we are moving with 350 applications that we produce in-house. We have a data factory with over 100 data scientists. I also remember we have more than 700 coders that work on the ICT model at a global level. Of course, we are reviewing all the processes of the companies trying to keep more effectiveness in the process and keeping out also more efficiency of course.

If we speak about the market side, we have a level of digitalization of all the industry of Enel that is 100% in cloud, 100% of all the process are digitalized. And on the market side, we renew in the last 2 years more and more processes in terms of customer value chain. And we start also with LENE and other approach, that is reimagine -- process Reimagine the Business. So let me say, I think we are on track to compete with the most and important technology that come in the market.

Another flower for hydro concession, it's important to understand this. The current concession for the local municipality is already expired in 2010, 15 years ago. Now we have discussed how we can do that. This is the timing in Italy for this concession because there is also a complicated and complex relationship between the national government and the local government because there is the [indiscernible] Italian constitution that give totally the regional power about this material. And there is a little bit conflict on that.

We are the unique player in the hydro that do not have any part of our concession space. So we were saying we are not today -- in this moment, we have other also other concession to discuss as we are not, let me say, an active player there. It's not the moment to be honest.

So you also asked about the PS bridge. In the share buyback, you see that there is 3, 4 because 3 is SpA, Enel SpA. 4 is -- there is the one that I do not control, let me say, directly in terms of execution. So let me say, you may consider for, if you consider also the execution of the full share buyback of Endesa, then it will depend on the price. But the price is not dramatic. We will not stop the share buyback because of the price. We are quite happy to have positive performance in the share.

Regarding the -- again, the impact of the different price assumption, I explained another time, I think it's very important. That's why I put also -- there's a calendar. In the past, Enel Energia, it means Francesca Gostinelli sourcing was made at the spot price. I have to source the offer that I will launch tomorrow, and I will source myself at the calendar '28, '27 depending on the duration of the contract with the final customers. So the energy management was made the, let me say, the purchase in the department of Enel Energia.

Now the Energia, Francesca says energy-- Bernabei at Green Power produces, so it's an industrial cost, it is managed by the energy management in order to optimize the portfolio that is very important because we can hedge, we have to manage their famous buffer hydro that in 2022 made disaster here. And when I talked about how we have a negative impact of the poor hydroelectricity in Italy, but we do not have a negative impact, strong negative impact [indiscernible] because as -- a lot of time, we maintain a buffer in the hydro that do not have the risk of being short from the hydro plants, okay?

So what happened in this plan that I have to reduce not the cost that I don't know what will be of the sourcing made in the spot market, meaning calendars of the future time. But I have to reduce the price to the final customers because, as I sometimes tell you, if I have a reduction of EUR 5, it's EUR 10 in the bill of the customers. So imagine 2-megawatt hour of consumption. If I have to suppose a reduction of 25, that is the magic number that everybody have in Excel today, I have to review the pricing policy of Energia.

So for last -- Gonzalo.

Gonzalo Sanchez-Bordona from UBS. I have 3 questions. One is more generic regarding the -- I mean you sound very confident about the whole delivery of the plan, which we, I think, all appreciate. What is really the risk that something was wrong. And would you put a number to it? I mean, what is the maximum downs that you can expect in this plan, thinking about that, obviously, without giving us the details, I guess, of the potential things that could go wrong and I would imagine selling some assets that you are not thinking about today or having some changes in regulation or expectations regarding how things evolve on the regulatory side.

And this brings me to my second question. On the Italian measures proposed last week, well, the key one, the ETS 1 is related subject to approval by the European commission. So what do you expect happens if that doesn't come through? Or I guess what is your expectation regarding that approval? And if it doesn't happen, I would imagine the Italian government would want to do something else in order to reduced prices. So what is your expectation on that?

And then the third one is just a brief one regarding -- I mean, last time, you presented a plan, you talked about nuclear in Italy as a way of reducing prices. We haven't heard for quite a few months, I guess. So my question is, are there any developments there? Has the view changed completely? Is that something that the company is working?

I leave the floor to Stefano because what happened is a big question for the life, not only for [indiscernible]. Regarding our assumption and the possibility to EU don't approve would be a good news because instead of 80, 82 would be another number. We have taken into account the existing situation because otherwise it was impossible to have a discussion with you about hypothesis or other situation. Now we present a plan as if the decree was approved -- has been approved from the EU. In case there is modification of not approved, will be better. It's simple.

Regarding nuke, we have just launched the company for studying the solution but now need time even because the technology SMR at the moment, the Chinese example and other under construction in Canada, I think, but there is not the decision -- the decision did not take place because need law for starting, for there is -- after the law to create the new agency, need to choice the site. It's not easy and need time because I know also the government because under incredible pressure, all the people said to them, you don't know nothing about the price, about the company, about anything. They have to take this action because otherwise, it was impossible because the pressure it has been strong about them.

The evolution, I don't know, the evolution, in any case, not negative, more negative than we have presented. Stefano, regarding the risk.

Yes. Let me say the analysis is that we made -- we present to the Board of the company and analysis that make also not just the market, the financial stress, what may happen, the competition, the regulatory one. This year, we were ready to present also that in the last year, and we've not presented the, let me say, the risk analysis in our figure, we have prepared. Unfortunately, we have to manage the risk that was happening in our business plan. So in the last week, I'm sorry, but we have to work on the emergency of what may happen if. So we were not ready.

So the big question there is, how much is the risk today of negative change in the price scenario in Italy, it's strongly reduced consider that the ETS have a lot of implications. We have a floor of between EUR 20 to EUR 30 that is represented by, if we eliminate the ETS, we will have the call that become the competitive generation in Europe. So we will have a dramatic change in the coal generation because it will become the most competitive source of energy in Europe, and we have Poland, Germany, we have freezed the carbon, but we have to -- we would to ask to the government, so can we move back to generate energy with the coal. Again, the risk is now reduced.

Net-net, what -- summing up the analysis probably it works. If you sum all the impacts, you have some relief because it's impossible to have all the negatives, sometimes I think that is possible here. But okay. You have another, let me say, impact that is the same that we have today. So approximately EUR 300 million, let me say, that comes from other source, another EUR 300 million. But again, it's the sum of impacts affecting the financial cost, competition that is strongly reduced, price scenario.

In the Americas, we have PPA signed, so honestly, the renewal of the PPA is not an issue today in the net income. In Spain, between the market scenario and the ancillary cost, the margin was strongly reduced. So let me say, we have a negative impact of that size, but impossible because probably a lot of players will die before us before -- it's how much you are great to resist to a negative impact on margins of some measure. So let me say another EUR 300 million if you want to consider what may happen in terms of negative regulatory implication also in the remuneration of the network in LatAm, in Spain. In Italy, it is quite defined.

So we have run off time, but obviously Investor Relations is available for any follow-up. Thank you very much.

Good day.

Thank you. Bye-bye.

Good evening to all the people connected. Welcome to the 9-month 2025 results presentation. Enel's CEO, Flavio Cattaneo, will open with the key highlights; and our CFO, Stefano De Angelis will present the economic and financial results of the period. We ask those connected to the webcast to send questions only via e-mail at [email protected].

Before we start, let me remind you, media is listening both the presentation and the Q&A session. Thank you. And now let me hand over to the CEO.

Thank you, Omar. Welcome, everybody. Over the past months, we continue to implement our strategy and our results prove its effectiveness. First of all, EBITDA [indiscernible] reaching EUR 17.3 billion and EUR 5.7 billion, respectively. We're improving asset quality and profitability, leveraging on stable geographies with high visibility of returns and a balanced risk profile. Our focus on European countries now representing 75% of group EBITDA and 90% of net income, led to an improvement of the EBITDA conversion into net income.

We expect this ratio will achieve 30% at the end of this year, 5 percentage points above the 2020 -2022 average, also due to our share buyback program, a double benefit of investing in our industrial asset while giving an additional return to our shareholders. This continuous improvement leads to stable growth in EPS and confirming our focus on shareholder remuneration.

Furthermore, as usual, we are going to distribute an interim dividend in January equal to the 50% of the guidance floor, even though the final payout in July is confirmed up to 70% of the net ordinary income. As you know, environmental sustainability remains central to our strategy with emission-free production reaching 84% of total generation.

Now a brief overview of our 9-month performance across geographies. The results were driven by strong operating delivery in Spain, mainly driven by the integrated position management in Colombia, mainly due to good water reserves availability. A clear example of our attention to process and portfolio optimization is the U.S., where our commitment has led to a positive cash flow for the first time since the beginning of our operation.

In addition, the renewables in other countries have been restructured and reshaped in a growth platform. In LatAm, the resilient operation offset currency dynamics. While Italy continues to face challenges, lower water reserves affected the result of our hydrolytic plant. In light of the results presented, we confirm our expectation to close the year with ordinary EBITDA aligned to the guidance and the net income slightly above the top of the guidance range. This is a clear indicator of execution and value creation.

Now I leave the floor to our CFO for further details.

Thank you, Flavio, and good evening to everybody.

In the third quarter, the group confirmed positive and consistent economic and financial results. The limited risk exposure and the quality of our earnings are evidenced by the linear trend throughout the quarters with a net income expansion funded on structural improvements of our asset portfolio profitability.

Focusing on the delivery of our strategic pillars, the group profitability continues to be strong with net income up by 5% year-on-year, expanding the 3% growth reported in June, thanks to an improved conversion of the EBITDA, which now stands at 33%. Efficiencies continue to be front-loaded with 80% of the 2027 target already reached.

Our efficiency program is part and share the same approach of the capital allocation process, representing our best and cost-free source of funds. Last but not least, on financial sustainability, net debt on EBITDA remained flat at 2.5x despite the EUR 1 billion execution of the share buybacks, which were not included in our guidance for the year.

In conclusion, these remarkable results confirm once again the solidness of our business model and our balance sheet flexibility. Before diving into the results, let me show you the delivery on capital allocation. The execution of the industrial plan, I'm on Page 6, presented in November last year is progressively reshaping the asset portfolio of the group, allowing for a substantial improvement of the business performance. This is translating into a better asset quality with reduced volatility exposure and a more balanced risk return profile and an improved asset profitability, which resulted into higher EBITDA conversion into both net income and FFO.

Thanks to this growing level of investment deployed in Europe, 75% of EBITDA contribution is now coming from this area. A minority dilution is limited to 9% on the European operations. At the bottom line, this translates into 90% of net income contribution coming from both Italy and Spain. This improvement is driven by coupling new investment guidance and the maximization of the value to be extracted by our asset base. I move to Page 7. Here, I show how the previous investment cycle was focused on growth in renewables capacity in Latin America and U.S.

However, lower market visibility and greater market volatility and generate a lower-than-expected EBITDA, while the net income conversion was also affected by the higher financial cost and depreciation related to the incremental capital expenditures. On the opposite, the new investment cycle started in 2023 is focused on countries and businesses with secure and visible returns. It is proving to be more efficient and effective, delivering an improved EBITDA contribution, thanks to a more effective and efficient capital allocation and the reinvestment of efficiencies, as I said before, at 0 cost source of funding.

This is clearly visible in the stronger results along all the P&L lines, implying an improved conversion of the EBITDA that is set to exceed 30% for the full year when we compare with 25% on the average 2020-'22 period. The first execution of the efficiency plan, the improved conversion efficiencies achieved in the headroom created on the balance sheet that keep us with a significant firepower to implement the share buyback programs already announced that we have on Page 8.

The full actionable buyback plan at group level stands at around EUR 6 billion and includes the total amount of the 3 different programs approved both at Enel S.A. and its subsidiaries level by the corresponding AGM. About Enel program approved by the AGM for EUR 3.5 billion, we are on track to complete the EUR 1 billion tranche launched in August. And as of today, we have purchased 63% of this amount. Endesa, where the program approved by the AGM amount to EUR 2 billion has already announced EUR 1 billion in 2 different EUR 500 million tranches with the second one already ongoing and having a final date February 26. As of today, Endesa have purchased EUR 0.5 billion spent EUR 0.5 billion and with an average per share acquisition cost of EUR 26.6 per share that represent 1.9 approximately of the total share capital.

Lastly, [indiscernible] érica share buyback was completed and oversubscribed with a total amount of USD 470 million. The partial was financed by the available liquidity. This liquidity is still arising from the sale of Peru from the disposal plan that we executed starting from 2022 until 2024. The operation now that is concluded and will be financially executed -- has been financially executed on the 1st of October, will increment the shareholder into the company into the holding Enel Americas from 82.3% to 85.7%.

This brings me to say that it's worth to highlight that also the share buyback program at subsidiary level increased the Enel SPA earnings per share, thanks to the higher portion of the consolidated net income post minorities. Then the Investor Relations may make this exercise with you of calculating the percentage point of the increase. Now we are around 1% of net income post minority increase with the execution of this portion of the buybacks. On Page 9, we finally move into the economic and financial results of the quarter. As I said before, the group delivered a solid performance, improving previous quarter's bottom line performance and the trend expectations. It is worth reminding that this year, we face relevant exogenous negative effects, a stronger euro exchange rate compared to our Capital Market Day guidance, the breakout driven increase in network ancillaries cost in Spain.

And then the program, let me say, good payment in Brazil that is defined by the regulator without any refund for the generators. Including the impacts of these, let me say, headwinds as we call them, we would have stayed exactly in the expected growth of the budget and the plan that is plus 3%. But the reduced exposure to countries and business where we have this kind of higher volatility and sometimes unnecessary risk profile represented also by the limited contribution to the bottom line, allow us to mitigate these headwinds at net income group level, where the limited conversion of the EBITDA exposed to these negative impacts smooth this impact that is more than compensated by the better execution, for example, in terms of bad debt and financial expenses.

Finally, net income came in at EUR 5.7 billion, up by 5% year-on-year. It is important to remind that as already represented in the previous quarter, at net income level, the adjustment related to different perimeters across 2024 and 2025 includes also the sale of Slo that resulted in a negative noncash impact in the reported numbers of 2025 for the release of network reserves that was booked in the past related to derivatives. Remember that we have the important cash impact of taking back to Italy more than EUR 1 billion of shareholder loan and all the interest that was capitalized in the previous years.

Finally, our improved organic results translated also into enhanced cash conversion, enabling us to reduce our net debt by EUR 0.6 billion year-on-year despite an additional EUR 1 billion not included in our business plan allocated to shareholder remuneration through the buyback execution and this maintaining the net debt on EBITDA ratio stable at 2.5x. I will now dive into the key highlights of the business moving to Page 10.

We are talking about the grid's delivery, and it's important to highlight as always, that we deployed a very huge amount of investment in this segment that amount to EUR 4.7 billion with an increase of 14% when we compare the same perimeter of 2025. Italy, that is the unique, I would say, regulatory framework that evolved versus the new needs in terms of network evolution in order to grant the resiliency and the support -- the adequate support to the system network security and contribution to the entire economic environment growth.

This is the unique country where we already achieved the most important goal that is having a fair regulatory framework to allow us to invest, and we are ready to invest significant resources if we found other framework like this one. I'm anticipating probably some question about Spain. So it's clear that Italy gained the lion's share. So when we say Europe gained 80% of these shares, we have to also say that 70% of this amount is dedicated to Italy. The huge amount of investment boosted the value of our RAB, which has now reached almost EUR 46 billion, increasing the resiliency also and the visibility of our EBITDA for the coming periods.

Finally, it's worth to highlight that as I have been questioned several times, and I don't know if this was part of the communication that you received from the analyst or from the financial market, the [indiscernible] in Italy was confirmed at 5.6%. Let's now look at the generation and supply business. In terms of capacity, our renewable asset base grew 3 gigawatts in the last 12 months, supporting the share of the renewables production on total, which remains stable at 72% as of September for the lack of resources in Italy for hydro, approximately in the year-on-year comparison, we have 1.5 terawatt hour less this year.

And in Spain for both wind and solar resources and also for the relevant impact in terms of curtailment in Brazil because it's important to highlight that terawatt is not considered also in the production KPIs. We continue to deploy greenfield BES capacity, reinforcing our leading position in storage, and we had 1 gigawatt in the last 12 months. And if we include our pumping capacity, now the full storage capacity of the group reached almost 12 gigawatts. Continuing on BES in the [indiscernible] auction in Italy, we achieved a remarkable result awarding almost 70% of the total battery storage capacity auctioned with 6.7 gigawatt hour out of a total of 10.

Moving to the retail segment. In our domestic market, volumes remain pretty stable at around 52-terawatt hour. Other important point, we also underline this, starting from the second part of last year, we complete the reshape of the offer portfolio and now our customer base is more resilient, demonstrated by the strong reduction in churn rate. Furthermore, our offers are now based on a sustainable price level in line with the current market price. I will now move into Page 12, and I will talk about the earnings evolution. As I said at the beginning of my presentation, ordinary net income came in at EUR 5.7 billion with a solid 5% growth that was supported by the mentioned EUR 8 billion CapEx. And this is the result of a strict but simple financial discipline and the value-driven approach that we have bring into the integrated margin management.

I will now focus just in some specific topics. D&A increased EUR 100 million versus last year, but this is mainly driven by higher amortization resulting from the increased level of CapEx deployed over the year, but this was fully offset by a very positive result that was the bad debt evolution, especially in Italy that was also connected to the improvement of the -- sorry, on the churn rate, confirming a structural trend that we have observed along all the year.

And already in the first half, we have a very positive impact. So the CapEx is doing its job adding EBITDA, adding D&A. You do not see the impact at EBIT level of this additional D&A because we have the bad debt that is performing very well and reducing EUR 300 million sorry, EUR 300 million in Italy and EUR 100 million additionally in Spain, so EUR 400 million in the 9 months that compensate the D&A effects. Another very positive impact is financial expenses that are down by around EUR 300 million, and this is thanks to the reduction in charges on debt driven by the EUR 4.3 billion reduction in gross debt and the lower cost of debt compared to last year.

Let's now move to the slide related to the FFO and net debt. I'm on Page 13. The EUR 1.1 billion FFO delivered in the 9 months implies a remarkable 64% cash conversion, which will be confirmed as share for the full year results. The FFO generated in the 9 months more than covered the deployment of organic CapEx as well as the acquisition of assets, brownfield in Spain with FFO minus CapEx being positive for EUR 2.4 billion. This net cash flow from operation, the net cash related to nonrecurring or accounting adjustment funded a EUR 7 billion shareholders' remuneration that have approximately EUR 6 billion of dividends and the EUR 1 billion approximately related to the buyback.

Finally, net debt came in at around EUR 57.5 billion with a remarkable and confirmed ratio of FFO net debt at 25% that is up by 2 percentage points versus previous year. Another sound results proving the quality of our asset and very important for our rating.

With this, I end my presentation. Thank you for your attention, and let's open the Q&A session.

We thank our CFO. Let's now open the Q&A session. We received a lot of questions for the call that we have summarized by topic and will be answered by the CFO. The first one, share buyback program for Annual SPA. Now you are on track to complete the first EUR 1 billion. What's next?

First of all, it's clear that we have today the balance sheet to execute the entire program, meaning EUR 3.5 billion approved by the AGM. Important to remind that the 18 months that is the difference, for example, from Endesa program, that is the duration of the program is the mandatory maximum duration for the Italian law.

So it's not a specific decision underlying the 18 months. Clearly, the buyback is one of the options that we have to use part of the available financial flexibility. But we have to keep in mind that we have other relevant opportunity to expand the industrial asset base in order that is our fundamental goal to ensure stable and long-term earnings accretion.

Thank you, Stefan. Let's move to Italy concession extension. In Italy, we are waiting for the final document on concession extension. Any news?

Not depending where you are, but the last relevant event is the [indiscernible] resolution in August. So we are currently waiting the decree of the Ministry of Economy. But as of now, in terms of -- you asked about the assumption being a decision that is not in our hands. Our unique assumption for a unique assumption, let's call it this way, about the amount of the lump sum is what we have included in our Capital Market Day in November.

And probably some of you remember that we included this amount not having still the opportunity to disclose the ongoing discussion about the scheme of the extension of the concession. Regarding the timing for the cash out, this is based on a step-by-step process whose timing is set by the government bodies because we have different actors that participate into this process that are involved.

And this should target as we always stated the last quarter of 2026. But let me say about this topic that the value of this concession extension and the related extraordinary CapEx plan has to be considered independently from whenever and whatever will be the lump sum, even if it is a relevant element of the framework because the extension and the new and increased CapEx cap, this is really important as I had the opportunity to share with some of you, will allow us to invest more than EUR 15 billion in the next 3 years in Italy with a dramatic increase in the RAB compared to the past.

Don't forget that we will have just in 2026, EUR 1 billion of grant still in our CapEx. But starting from 2027 and 2028, will not reduce the CapEx the gross CapEx for EUR 1 billion, as you see in my number. So you know that the grants do not translate into [indiscernible]. So if this is EUR 3 billion of this is EUR 4 billion, we have 3 years and a new framework that allow us to make an extraordinary level of CapEx, and we have the full firepower to realize a very significant upside in the CapEx that we will transform into REB.

Thank you, Stefano. Let's move to Spain. Can you please update us on the latest news on regulation in Spain? And what's your view?

We do not expect further updates earlier than the end of November. After that, the regulation will be finalized before year-end. Endesa has already got the access to the they are still all other operators submit comments as always. We think that the changes proposed by the CMC in the latest documents do not solve the issue of effectively incentivizing the level of investments needed to accelerate the country's electrification and support the energy transition.

This means that failing to establish a more predictable and adequate remuneration framework to meet this demand will mean seek and historic opportunity to enhance competitiveness, create jobs and drive economic growth. These are all topics that were part of the program of the government when we start to discuss about this topic. It's not my personal idea of Spain. But to be pragmatic, once the final remuneration framework is approved by year-end, we will be in a position to reassess if there are the condition and we will assess also the sides for a potential upside in the CapEx plan. So we are talking about an upside. And this will happen ahead of the upcoming Capital Market Day that is scheduled for February 2026.

Thank you. Next question, if you -- could you please update on hydro concession extension?

There are several concessions in Italy that have already expired by several years. And it's worth to remind that our concession will expire after the end of the next 3 years industrial plan. So I can say that we expect the process will take longer time to start. This has to involve regional, national and European authorities. So it should be different from the one of the distribution. This does not mean that this is not a negative consideration. Because at the same time, it's a common understanding that in the present macro and geopolitical scenario, the condition that shaped the present regulatory framework need to be currently updated.

Finally, what I want to say that we are not in a hurry, and I think it's not the proper time to speed up the process from our side, having the regulatory agenda already full -- we were talking about the extension of the grid concession some years before of relevant topics, not just for our company, but the whole industry.

One more on concession, but Brazilian one. Could you please update us on the process for the concession renewal in Brazil?

But the process -- there are 3 processes that have different timing. So I will -- about the specific administrative debate about the 3 processes that you can share with the -- also with the IR department. The relevant underlying discussion and evidence from our point of view, that is our point of discussion with the authorities are all pointing to the full extension of concession.

This is because we -- it's worth to remind that our effort in the country translates into a complete turnaround of the operation, targeting a dramatic improvement of the quality and the effectiveness of our operational processes that is joint with a gain in terms of productivity and efficiency in terms of spending. As an example, we are in-sourcing mission-critical field activities in order to improve the end-to-end management and monitoring of the network, but this is just one of the example.

We are strongly already increasing the capital expenditure and the dedicated to this turnaround plan. So despite a complex unfortunate starting point, with this approach, the present scenario drive to a full concession renewal as, I would say, also the unique scenario that we are considering today.

Apart the concession topic, let me also update you on the liberalization of the retail market in the country. The government has defined the full liberalization of the retail market with a final deadline within 3 years. This means that our strong leading presence in the country should create a growth platform able to capture an incremental value creation that implying a potential but significant rerating of our Brazilian operations.

Thank you, Stefano. One question on [ MAX ] auction. Could you please elaborate on investments and expected return?

This is the auction that it's in Italy, the counterparty [indiscernible]. We were awarded with around 70% market share of the total capacity in the auction. And as already said in the presentation, 6.7 gigawatt hour that is the other way of, let me say, measuring the auction level of capacity and megawatt gigawatt hour as you prefer. The auction was based on a pay-as-bid mechanism.

So you see that we have different pricing. So it's very difficult to understand an average point because you have different price for different players for different plants. What is important is that this auction generated 15 years, 95% regulated revenues that give us full also to our shareholders full visibility of the earnings stream with, let me say, I would say, a very risk profile because we have the construction, but we are the leading, I think, company. I don't know because nobody was helping me to understand this, but I think that we could be also the leader for sure in Europe and maybe also in some other continent.

But I'm not joking that the execution of the construction of the BES, we already realized approximately 2 gigawatts in Italy. So for us, this is not an element to consider a risky point. So the of this capacity and the EBITDA will be 2028 as based in the auction. So you will have full visibility in our next business plan and also positive impact of this CapEx and this auction.

One more on auction -- FedEx auction. deadline for competitive process is at year-end. What's your expectation on the outcome?

If you look at the press releases that we have from the -- let me say, the administrative bodies, it's already, let me say, quite clear that we are -- first of all, we have 2 different auctions. The big one baseline, let me say, auction and then we have another smaller that was dedicated to non-Chinese, let me say, components. The first one, we already understand, let me say, by the statement, the official statement from the GSE that have been awarded around EUR 60 per megawatt hour, something -- some capacity less, some capacity higher.

But you have to consider that this price is adjusted for inflation. There is a full curtailment coverage and this has generated so, let me say, a solar scenario. Solar was the big portion of this auction. And then there is an additional component in the price that is that depends from the geography. You have EUR 4, if I'm not wrong, plus in the center of Italy and EUR-10-plus in the north of Italy. This is not adjusted by inflation. So at the end, you have something that is in the range of EUR 65.

In some cases, you have more than EUR 70. Again, that for the EUR 60 average of the base auction will be adjusted for inflation. In the other auction, we do not have any statement, we have to expect a price that reflects the spread of the market price against the Chinese prices, something that could be in the range of EUR 5, depending if you have the Indian one or something more. But in the second auction, we do not have the official statements that we have for the first one.

Thank you, Stefano. Let's move to CapEx evolution. Do you see opportunity to invest more in renewables? In U.S., in particular, how many megawatts you already lock in?

Maybe also kilowatt. But again, I think that the market now should start to understand our behavior. It's not just U.S., it's not just Italy, it's not just Germany. It's a question of investing where you have a scenario that have, let me say, a balanced risk rewarding profile. This means that in Italy, we have a different approach than in Spain, for example, it's not just Europe because in Spain, now we are very long in terms of generation.

In Italy, we are dramatically short as a country and as Enel. So the approach is different. But at the end of the game, it's the same because in Italy, we could be more aggressive in terms of pricing, let me say, expectation. In Spain, clearly, we have very low expectation because when we look at the market of the BBA with solar, it's not a country where you can imagine today to have a merchant photovoltaic plant to be built in the next months and the next couple of years.

Moving to the U.S., it's really an interesting country because it's, first of all, one of the country that is in our scope, and you know that in our scope, you have a country when the -- also the market scenario, the geopolitical scenario and the regulatory scenario is, let me say, visible and let me say, less volatile. The safe harbor discussion, it's important. But at the same time, it's also important to consider that U.S. is a market that is growing. And this growth is visible today is already visible in the price of the PPAs.

It's already visible in the price also of the market, the different markets. And when we say different market, it's more visible in the PJM that in the SPP or something like this. So the approach remains the same. In U.S., we have a pipeline that should present some interesting safe harbor greenfield opportunity to transform this opportunity into a positive final investment decision, we are already having discussion about PPAs because it's clear for us that if we are going to build a greenfield plant in the U.S., we will have a signed PPA at the day of the final investment decision. And this is part of the evolution that we are carry on in these months.

Thank you, Stefano. Now let's move to guidance. First question regarding EBITDA guidance. Could you please run us through the trend of the last quarter of the year?

As also last year, I insist, let me say that utilities should have also, let me say, an annoying trend. And so my annoying answer is that the trend will be the same that we have observed along this quarter. So Europe will have an Italian pro forma that will be, let me say, almost flat year-on-year. And Spain will have a performance that will be more or less 5% growth year-on-year. That is exactly the figure that we have in September. It's clear that in South America, we have, let me say, a more, let me say, volatile trend, also considering the FX.

So we expect a different -- a recovery, let me say, in LatAm that will be driven by the confirmed positive performance of Colombia, where we have -- is the unique relevant country in the region that do not have a negative FX and the positive rebound in Brazil, the rebound that will be in the integrated margin will depend on 2 specific points. The first is that the FX impact should reduce because last year, 2024, the euro start to strongly appreciate against real in this period, let me say, in the fourth quarter of the year. So let me say the year-on-year comparison will benefit from a worse 2024 in the last quarter of 2024.

But the most important topic because it's a very important industrial change that we will book probably if nothing changed in terms of process in respect to the positive impact of the curtailment refund in line with the decree that was approved recently by the Brazilian government. as you know because I read a lot of daily news from the investors, from the analysts, this is not what -- I would say you were expecting because we were expecting this, it's very difficult to expect that the excess of capacity, it's refunded.

When the network operator cut for -- with the program cut for security reason. So it's a program cut not for temporary excess of generation, but it's in order to secure the transmission and the network system. In this case, we were expecting strongly to be refunded and the decision is, let me say, positive as again, I wrote this is also our position, the generated distribution should be, let me say, impacted by the definition because it's the reason why we have that kind of congestion in Brazil.

So -- but this is something that could be introduced also in the final word of the law when transformed into law. So the impact is not hundreds of millions. It's something that, let me say, bring our performance in line with our expectation because the amount more or less will cover the full impact of the curtailment that is the one generated by the -- let me say, by the programmed cut from the TSO and the other is the real congestion that, in our opinion, is something that is, let me say, a long-term strategy from the -- of this energy system because that kind of evolution in the distributed generation was -- should have been managed some years ago probably.

But again, don't move from the positive reaction that we had. So Brazil will driven by this specific effects that will not change, let me say, the trend of the LatAm business dramatically, but we will move from a flat to a low -- no, let me say, to a single-digit growth in the specific fourth quarter results. This is our expectation.

Stefano, one more on guidance, net income guidance. On net income, you guided slightly above the guidance range. To which extent do you expect to exceed the guidance?

Let me say, I think that I gave all the elements to have the translation of the EBITDA into the net income. So I will just, let me say, refer to something that is not related to the EBITDA because the mix of the EBITDA will have a negative, let me say, a slightly negative impact on the minorities.

In terms of seasonality, also last year, we had, let me say, a different quarter in terms of economics last year, but you have to consider that there is also a concentration as always, of the CapEx that you probably remember also impact. So I probably answered the question of the working capital in this moment that how you expect to recover the working capital because the CapEx concentration, it's historical that nobody will be able to remove from also all the industries that have this intensity of CapEx.

So this will be, let me say, again, we are a very utility. So the linear trend will continue, excluding this change that we have a higher, let me say, share of depreciation, a slight increase in minorities because due to the positive improvement of the LatAm operations.

Let's move to hydro. The hydro production in Italy is down 1.5 terawatt hour year-on-year. What's your expectation for the last quarter? And any visibility on 2026?

But first of all, I think it's very important to keep in mind that 2024 was -- if I'm not here by 20 years, but probably the best year in terms of eicity in the story of the hydro in Italy. So when you see year-on-year comparison, you not to worry about also our plan because we never make a plan with the historical high.

We are always in an average. So we were expecting this trend. In this moment, the is not improving. So we will not recover. I will tell you that we will recover the 2024 condition. And to have full visibility, we have to wait still some weeks in order to have, let me say, a first visibility on the first part of 2026. But it's important also the 2026 in the Capital Market Day industrial plan was defined based on an average hydro resource in Italy as in the other countries.

Thank you, Stefano. Let's move to retail. It looks like you recorded a drop into retail clients in Italy and Spain. What is the churn? And what are the main drivers?

But unfortunately, it's in this quarter, something very strange happened because we talk about churn reduction and you see the drop of the customer base. The churn is confirmed at the significant lower level compared to last year. And this is what we were expecting because all the -- also repricing that we performed in the last -- until the first part of 2024, this process was completed by the end of first half 2024.

And this started to give us improvement of the churn that now is very solid and clear. But another important thing happened in one day that was that in the 1st of July, we have millions of customers moving from one side to another because we lost millions of customers from the regulated base, and we gained in day approximately 1 million customers. So now we are like-for-like this is a change that is real, let me say.

The other one also was real because that customer was not in the free portion of our customer base. And this is also important to look at the volumes, let me say, in the reported figures because starting from this quarter, in one day, we lost also the terawatt hour of the -- when you look at the total figure of the terawatt hours sold in Italy. In one day, we lost millions of customers, so some terawatts generated from the so-called customer base that was in a specific company, and you probably know the story that is not so fantastic to...

Okay. Thank you for your answer. D&A were almost flat year-on-year despite the new investments, which are the drivers?

That we gave the trend -- the industrial trend of the asset is that we have an increase in the D&A because of the increase in the investment plan. Keep in mind that in the past, you have the figure that was also reporting the disposal plan. So when you see the asset base and the depreciation, when you sell an asset, you sell also the depreciation with the asset base. So now that we are trying to be more stable and comparable now the pro forma is limited to Peru and Lombardi when we look at the industrial part of the comparison, you will start to see the increase in the depreciation that is, let me say, organic. But [indiscernible], as I said before, we have the strong reduction in the bad debt that you will see in the same line, if we don't move into a scheme that have, let me say, an open description of the D&A figures in the simplified P&L.

One question on data centers. It's a business opportunity for you.

Yes. As presented 1 year ago, this is part of our additional growth opportunity. As of today, we are working on a specific pipeline of industrial sites through a dedicated full-time organization set at the beginning of last year. The specific business opportunity is represented by the sale of time to market. What does it mean? A value that is embedded in the industrial side where we can offer real estate permitted and ready-to-use energy network connections and facility services on top of a power PPA with a premium -- about this business model that is different from a spot sale model, we are finalizing the first preliminary agreement in Italy, where we have several potential sites in our pipeline.

Thank you, Stefano. Let's move to financial expenses. What is driving the improvement in financial expenses versus plan expectation?

Because none of -- I was thinking there is a different -- because already -- I think I answered through the presentation and we have also included this EUR 4.3 billion reduction in volume effect. And then we have, let me say, we have to consider the short-term and long-term part of the debt. But let me say, generally speaking, we have also an important reduction in the cost of debt, also thanks to the new emission of the last, let me say, 24 months.

Okay. Thanks for the clarification.

[indiscernible] somebody that was analyzed that I didn't respond about -- I didn't answer about Spain. I just talked about Italy, Spain is a completely different market. I'm referring to the retail churn. In Spain, we have a dramatic churn. What is important that we started to have, let me say, a different approach to different segment of the market on the sales channel. So when you see the positive results that we have in Spain because we don't want to do fight for customers just for an absolute figures of invoices. And the result is negative when you look at customer base, but if you see the trend also comparing us to other peers, in the generation supply, let me say that we have a quite slight better trend comparing year-on-year.

So we expect this to be also something that is an example because the churn in Spain is structurally average churn at 25% that I never seen in my life also in telecommunication sector. For example, that the churn has destroyed also entire groups of companies, but 25% in Spain that the lower price wholesale in Europe is something that depends on specific behavior on some specific player that it's important not to follow because they are not creating value in that market. This is important to state.

Thank you, Stefano. Let's move to working capital.

I said before that I already answered working capital. It's again, the seasonality is always -- last year, I said that we will recover and we recover. So you have to start to trust in me about working capital, but also because I remember perfectly last year that I said I have the invoice, the visibility, the short-term visibility of our business is very high, very, very high. So the working capital is something that is -- if you have some change because you decide to have some change from the forecasted amounts. So don't worry about the working.

Okay. Thanks, Stefano. There are no more questions. So the Q&A session is over. We cover all the main topics. But if something is missing, the IR team is available for follow-ups after the call. Thanks to everybody.

Thank you, and see you maybe somewhere before Christmas, different happy Christmas because this time, we will see for the Capital Market Day, not in 2 weeks, but in 3 months.

Bye-bye.

Thank you.