Hera Aktie

Good afternoon, and thank you for joining us. Welcome to the Hera Group's financial results for Q1 2026. And the floor now goes to our Executive Chairman, Mr. Cristian Fabbri.

Good afternoon. This morning, we approved the figures for the quarter, and we are here to share our results with you. As usual, to see are the highlights from the management perspective, which can also be useful to you to understand the company's performance over the quarter and to see what the main drivers are.

We can begin with a look at our structural growth. As you know, over the past 3 years, we have been working to continue to allow for the company to grow organically and structurally, which we've done significantly. You can see the results here besides our temporary opportunities, of course. And you can note that beginning in 2024 and all the way up to 2026, we had a structural growth worth roughly 9% on average.

Now this growth element has allowed us to never go back over the years, which is what we'll be seeing in a while regarding our profit to be in line with what we had defined in our business plan. If we move to the following page, you'll see that we didn't reclassify the net profit. These are the real figures, which also include temporary opportunities in recent years. And you'll see that even for this quarterly report, we have increased our net profit with a 1% growth.

The growth in this result is also the outcome of what we have worked on in recent years with our structural growth, with our investments. And in this regard, between operational investments and M&A transactions, we've invested all in all, EUR 380 million. And as you can see, the net debt-to-EBITDA ratio has remained in line with what we had at year-end 2025 with a comfortable ability to reach further opportunities.

Now let's go into the details to see what led to these results of the quarter. As you can see, the quarter has quite a few more items compared to what we usually show you. So let's begin immediately with the fact that most of the smaller contribution coming from temporary opportunities, which is missing in 2026 compared to 2025 or EUR 33 million is something that we took into account in the first quarter.

This, of course, has a lot to do with the reduction in margins, especially linked to the gas last-resort markets. which, of course, have an impact. To that, we also have to add the lack of 2 one-offs, one is negative, one is positive.

The negative one is one which was positive last year, which is a nonrecurring item linked to all of the tariff recognition we received for electricity and gas distribution for the most part and a small chunk on water, which had given us a positive nonrecurrent contribution because of it related to elements pertaining to previous years, which are recurrent this year.

But then we also have some other positive items, which have almost offset entirely this reduction. And we can see the real structural growth in the businesses. As you can see, energy continues to grow, plus EUR 24 million Networks besides those tariff one-offs continues to contribute with EUR 11 million, which is linked to the structural growth that we are continuing to work on with the growth of the RAB over the years. And waste too, despite the complex moment in time, continues to offer positive results, which are on the rise compared to 2025.

Now in the P&L, let's see what the various dynamics were in the various business lines. We'll be focusing on EBITDA with a business-by-business breakdown. But then after EBITDA, we have an increase in provisions worth roughly EUR 5 million, which is linked to the increase in the investments we've done over the period, an increase which is offset by the reduction in D&A, which is worth roughly EUR 6 million. And this is linked for the most part to temporary opportunities.

As you know, temporary opportunities have a significant impact on EBITDA, but part of that value is consumed by D&A. And therefore, that is also something that we have to remove when we look at the figures since they are no longer needed in the first quarter. EBIT is up by a couple of million euros. And we have a level of financial costs, which is pretty much in line with last year, EUR 1 more million, but it's pretty stable.

In terms of taxes, we are more or less in line. We have already included the increase of the IRAP tax in the Bills Decree. And if we also take away minorities, it leads us to a net profit worth EUR 155 million. As far as provisions are concerned, we are working towards normalization. Also given the effect of the removal of some D&A linked to the last instance markets, when it comes to financial costs, which have given us a fairly large contribution last year.

Taking all of that in mind, we have the results we've seen in net profit, but we also have the EUR 33 million of the [ last instance ] markets, which are negative. The result at the end of the period is slightly above the one we had last year because we had a positive contribution worth EUR 11 million for an insurance reimbursement for a plant that had been damaged in late 2024.

We have refurbished the plant, and therefore, the insurance company has reimbursed us following the damage we had, and this had an impact on Q1 this year. Then we have a growth in the margin linked to our trading and value-added services worth EUR 24 million. All elements here contributed positively. In the [ trading world ], we have had some positive results given the turbulence on the market. Value-added services are continuing to give us good results. And even on the commodity side of things, we had good results, also linked to a different accounting among quarters compared to last year.

And let me hand it over to the CEO for waste.

Thank you, Christian. Good afternoon. Let me begin by saying that we're doing very well. In recent years, we have always confirmed that the waste business has never stopped growing. And we want to continue in this direction. And even in Q1 this year, the waste business had a positive EBITDA performance compared to last year.

And this is something that we especially appreciate if we consider 2 elements. First of all, the fact that in 2025, we were still benefiting from the contribution of the old hedging contracts. Second, in Q1, we had a temporary stop in the landfill in which we had to conduct some environmental tests. And the landfill is back to its full capacity, and it is fully operational.

This was entirely offset by the growth we had in all of our waste activities, both in the regulated part of the business, including the collection of urban waste and in the liberalized part of the market, which includes treatment, recovery, remediation. And we're also starting to see a small contribution, although it will grow over the year, stemming from the recent acquisitions we concluded in the month of March.

As far as all of our activities are concerned, beginning with collection. As you know, we were reawarded concessions in the Emilia-Romagna. We are working at full capacity in treatment. And that, of course, includes remediation and recovery. In that part of the business, we have to underscore how resilient the business is, also compared to a global scenario, which is having an impact on the treatment capacity of players throughout Europe, as Christian was saying, whereas we, given the significant shortcomings we have in Italy in terms of plans and also thanks to the broad offer we have to treat, recover and remediate, our structural trend is on the rise with a substantial stability in volumes and an increase in margins.

I think that our business capacity, our ability to offset the one-off element I was mentioning earlier and the fact that the old hedging contracts expired, both of which happened in Q1. And also given the market context we operate in, all of that shows how sound we are, how solid we are even compared to our European peers. And let me just focus lastly on M&A. That column refers to the 2 transactions we completed in Q1 this year, the acquisition of Sostelia Group and SEA. These are 2 industrial players which we can add to our industrial portfolio as we did with Aliplast and ACR [indiscernible], both of which continue to be very satisfactory from the economic standpoint.

We want to do the same with these 2 more recent transactions, including by extracting synergies in a very determined way, which is what we did in the past and which is what we intend to do even with the 2 more recent transactions in the months to come.

So even when it comes to M&A, let me just underline the Italian market specificity compared to the European market. The Italian market, as you know, is highly fragmented. And therefore, we can use this lever to grow externally to underpin our results also given the fact that we have major financial flexibility, which means we can finance these operations without worsening our financial profile.

Moving on to networks. Networks continue to be a key business. They are a regulated business with a low risk profile, or hedged from inflation, from interest rates and from the fluctuation in demand. Here, we are pretty much in line with the results we had obtained in Q1 last year, which is something we appreciate very much because as Christian was saying earlier, Q1 2025 benefited from a one-off contribution worth EUR 13 million stemming from the [indiscernible] recognition of some operational costs that had been accounted for in 2025, including settlements pertaining to previous years, 2022, 2023 and 2024.

So even here, you can see that, that extraordinary effect, which was a one-off was entirely offset, thanks to the contribution of all of the network businesses, which grew for the most part, thanks to the development CapEx on the regulated asset base as we've constantly shown in our business plans over the years. Our investments have grown up to almost 20% in line with our business plan on 3 strategic axis.

We want to be ready for the transition, beginning with the energy transition, of course. Secondly, we always focus our attention on efficiency and quality. But this is something we always do with a major focus on innovation and with a major use of artificial intelligence as a way of making sure networks become smarter so that we can better deal with the global challenges we'll be facing over the next few years.

As you can see, the biggest contribution comes from water, which absorbs the largest chunk of our development CapEx. We want our grid to be more resilient to extreme events. We want to improve them. And by doing so, we want to take advantage of all the premium potentials that we typically are able to achieve as we've seen in recent years.

The contribution of our energy networks is also positive, specifically gas and electricity. We are investing in this field as well with electronic meters. And thanks to our smart grids, we will be able to intercept and allow for our networks to evolve in line with the evolution of the context, beginning with electrification. And therefore, our regulated network businesses, which had already grown significantly in the past few quarters, have been able to confirm their positive results, which confirms the ability we have had in being efficient in the investments we've been making, which will continue in line with the business plan, which we illustrated at the beginning of the year.

Thank you for your attention, and I'll give the floor to Massimo Vai now.

Good afternoon, everybody. As usual, I'll be illustrating the 2 slides that summarize the first quarter's financial performance. These slides give you an overview of the group's growth, beginning with an operational cash flow generated in the quarter worth EUR 315 million, to which we have to take into account a slight change in net working capital. The use of provisions are slightly lower compared to what we had seen in the same period last year.

Then of course, the lion's share refers to the CapEx component. For both maintenance and development, it's worth almost EUR 240 million compared to the EUR 190 million we had last year, which means that there has been a sharp increase as foreseen by our business plan this year. [indiscernible] more development CapEx. We talked about financial flexibility a number of times already. And compared to last year, as you can see, our financial flexibility hasn't changed despite having absorbed the impact of the outflow generated by the 2 operations, which changed our perimeter this quarter, which absorbed EUR 240 million.

in lieu of the change in debt, thanks to the cash generated over the period was equal to roughly half of those expenses, which means that half of that has already been financed in the first quarter of the year. And we can move on to the right-hand side. As you know, this graph shows our growth opportunities and how good we are defending ourselves. We're still at a very positive level at 2.6x, which is in line with the figures we had at year-end 2025, and it's slightly up compared to the value we had in Q1 last year, although it's quite decent from the threshold we have given ourselves -- feeling we have given ourselves, which is 3x. So cash generation in this first quarter has been very good, and our financial flexibility has been also very good.

Slide 14 gives you our positioning in terms of the rating agencies, which follows -- are concerned, Standard & Poor's and Moody's. Compared to their most recent update, there have been no amendments. Therefore, our rating is stable for both of them. In the central portion of the screen, you can see the interest rates, 90% of our interest rates, 90% of our debt has a fixed interest rate, 10% of variable.

Compared to December, we have slightly increased the variable portion of the debt. We're looking at a number of banking lines with a variable interest rate. As you know, the cost of debt is in line with the growth of the tax rate curve. And therefore, what we have envisaged is that over the business plan years, as we replace expiring bonds with the new bonds, we will have a progressive worsening of the cost of our debt. And therefore, our goal -- our challenge is to slow the increase in interest rates as much as possible without altering our risk profile in terms of the volatility of interest rates.

And in fact, as you can see on the graph on the right-hand side, we have been able to keep the average cost of debt stable at the same levels we had in Q1 last year, slightly up compared to what we had 2 years ago. So even from this point of view, we have a very good result, which is comforting, and it will continue to inspire us as we contain the cost of debt to support the projections of the business plan all the way down to the bottom line. Thank you very much. Back to Christian.

Thank you, Massimo.

Let me just summarize the presentation. We rushed through the presentation as usual, to give you time for some Q&A. These results are very positive as far as we're concerned. Even in Q1 this year, we are able to confirm the results -- the goals we have given ourselves, namely how we want to continue to have positive effects on the bottom line. of our P&L, even in terms of EBITDA, we were slightly positive, in line with last year.

Despite having replaced EUR 33 million in temporary opportunities, we were able to offset those with a good structural growth. So this is the commitment we faced in our business plan, and we are continuing to work with plenty of determination. And I think that the results underpin our commitment. Our results are very good.

In Q1, we covered all organic investments and half M&A. In Q1, we covered 1/4 of the goals we've given ourselves in the business plan, which means we are ahead of schedule compared to the time line we gave ourselves of the business plan, which is good.

And then, of course, our cash flows covered 50% of the expenses linked to the 2 acquisitions. And this, of course, have a positive reverberation on our results. Both myself and the CEO have been confirmed for a further 3 years, which means we have to achieve the goals we set out in the business plan, which we had no doubts on, of course.

And of course, our commitment towards you is even more reliable now.

Wonderful. Let me give you the floor for some Q&A. For any questions you may have, we are available for any doubts you'd like to share with us.

Mr. Fabbri, the first question is by Javier Suarez, Mediobanca.

My first question is more related to the context. In my discussions with clients, there seems to be a stronger concern regarding the supply basis in Italy and also linked to stronger competition in which companies are having a hard time in holding on to their profitability levels. So the question to you is, do you think that the market interprets things correctly? Are you seeing a context on the supply market, which is especially competitive? And if so, how is the company reacting? What will it do to continue to hold on to the current profitability levels and to hold on to customers through various services? How will you convince customers to shift to the liberalized market as soon as possible?

Second question, your leverage at 2.6x is pretty low. And what I'd like to know from company management is an update on realistically what the company could do on bolt-on acquisitions? And what could the identity of that acquisition be? The market may be changing rapidly and there may be new opportunities compared to the past. So conceptually speaking, what does the company feel about a possible virtuous cycle for M&A leverage?

Third question, in the presentation, you referred to a still normalizing level of provision. And from your point of view, what should the normalized level of provision be in 2026 and 2027 to understand when this normalization process should stabilize itself. And then a final question on taxation. You mentioned that you incorporated the impact of IRAP. Where do you think taxation will stand in 2026 and 2027 for the group?

Thank you, Javier, for your questions. Well, the question regarding the competitive context in energy. Well, we've said a number of times that competition is on the rise. It's nothing new because ever since the market opened up, competition has been increasing. The number of players has been increasing. It's nothing new. And the context we're in is one marked by constant growth when it comes to competition and what's something we're seeing.

In recent years, we've seen some new and stronger players who want to have a say in the market. And of course, they're going about their business. Of course, none of the other players want to step back. And therefore, from this point of view, the market is demanding. What we're seeing currently isn't something we're concerned with, especially when it comes to margins. We feel that margins can stay in line with the ones we've always had.

So from this point of view, there's nothing we're especially concerned with. Of course, we have to constantly do more in terms of marketing, in terms of our commercial approach. The fact that we've always had a churn rate, which is lower than the market average is a value as far as we're concerned. It certainly linked to the things we've done in the past. It's linked to how we manage our customers.

But I think it also has a few structural elements. The fact that we are a multi-business, the way we acquire our customers, which we achieved for the most part through physical channels and that leads to a higher customer loyalty, more so than what we would have if we had used virtual channels.

If you use virtual channels, you can conquer clients faster, but you can lose them just as fast. So we're always working on new offers. We are increasing our activities on channels. We'll see what will happen in terms of the new government decree to limit calls coming in from call centers. And we'll see what impact that will have on outbound phone calls from our call center.

As far as the [ SDG ] is concerned, we're in line with our track record. The increase in prices is something which helps somewhat. And it seems to me that customers are less afraid than they used to be during the energy crisis in 2022 and 2023. It is true that prices have gone up significantly in March. But if we look at the quarter's average, the price is lower compared to what it used to be last year over this quarter because we tend to forget that in January and February 2025, we had some high cost of energy, which then decreased over the year.

But when it comes to the quarter's average, they are above the ones we have in this quarter in this year. And if we see things in the future, if you consider today's forwards and prices, we're looking at an average growth between electricity and gas worth roughly 15%. So we're not looking at something which is especially worrisome for the future. So that was related to your first question. You were mentioning the use of the financial lever and some bold acquisition. Well, we're off to a good start this year. The work we carried out in 2025 allowed us to complete 2 acquisitions worth EUR 340 million in the month of March.

They are bold. But given the acquisition level we had, bold needs to be really something. But as we always say, we constantly look over the opportunities out there. Our M&A department always complains because they say we want them to work too much on assessments and evaluations. So we're looking at a number of different files. For the time being, there isn't anything which is extraordinarily big.

You would know if there were some major transactions in the pipeline. But having said that, we will continue with our desire to create value. The challenge we face is to work quickly, but to work well. That's the goal we have. And of course, we never want to ignore the fact that things have to be done well, which means that when we look to acquire a company, there needs to be an industrial fit, and we need to be able to create value.

Moving on to the question on the normalization of provisions. Well, of course, with the normalization of [indiscernible] markets, of course, it will depend on the evolution of prices in the future and the evolution of our customer base. We would have significant contributions from the last [ instance ] markets. But as you know, every 2 years, tenders are held for those markets. And therefore, we will have to assess our interest in that market on a case-by-case basis.

We have already covered the impact stemming from the increase of the IRAP tax linked to the Bills Decree. We've already covered some EUR 2 million. We're all working in that direction with some fiscal optimization, and we're trying to obtain a tax rate, which would be similar to the one we had last year. So that's the direction we're working in and looking forward for the rest of the year as well.

So this is an element that we should be able to hold on to even for 2027. That would be logical. So we're working to optimize things, and we're looking to take advantage of any opportunity and optimization opportunities.

The next question is by Emanuele Oggioni, Kepler Cheuvreux.

I have a few questions for you. The first is on the expected growth for the remaining part of the year. If you consider that the context in Q1 was a little bit more challenging year-on-year, more so compared to next quarters because there were some one-off -- positive one-offs in the regulator side of things. And then we had higher prices, which had an impact on waste energy plants, whereas it could be positive for waste in the coming months.

And then in your slides, I noticed that you only had a EUR 2 million contribution from M&A and waste. I didn't see any other M&A transaction in the other businesses. You had mentioned an M&A contribution of some EUR 20 million during the year, which means that the remaining EUR 18 million will come from other transactions in the months to come.

That would lead us to think that the next quarters in the year may have a bigger growth compared to what we saw in your report without going into the adjustments and the temporary opportunities. In the following quarters, there will be an acceleration compared to Q1. So I'd like to know what you think of these remarks. For the second question, also regarding acquisitions without mentioning any names and with the caution you deserve, the press mentioned some possible transactions in the energy supply basis, which would be interesting to some players, including Hera.

The press mentioned a number of companies which have up to 1 million customers or 0.5 million customers. So on the energy supply market, there are some significant opportunities when it comes to the amount of customers available. And of course, I'm sure you're always looking at the possibility to grow externally even when it comes to energy supply.

Also as far as energy supply is concerned, I noticed that in Q4 2025, maybe it was that after the first 6 months of the year, there have been a decrease in customers in electricity. But whereas in Q1 2026, you confirmed your 2.5 million customer number, which means that one of the drivers may be a migration -- a speeding up of the migration of customers from the gradual, safeguarded market to the liberalized market, and that may lead to an overall improvement in profitability per customer.

thank you You, Manuel. Let me begin from your last comment.

As I mentioned, We're working to acquire customers. We want to hold on to the customers we have. customers may come and go. Although in Q1, we were pretty busy to try to offset the customers leaving with new acquisitions.

Then of course, if you compare quarters, there may be some slight differences, although that goes back to what I was saying earlier. As far as the total number of customers is concerned, the switch between STG and liberalized market, we don't really see them because we have included all of those figures. you don't really see them, although, of course, that is something which helps our margins.

And we're continuing to work as expected and in line with our forecasts when we made our bid in the tender. So we are still pleased with the voices, and we'll continue to work on them. And then in March 2027, the period will reach its end, which means that we have pretty much completed the entire journey. We only have 1 year left. We're almost there.

As far as acquisitions are concerned, well, the real question you should ask to the companies you mentioned is if they know they're for sale. The article mentioned us without having interviewed us, which means they probably mentioned players on the market without asking them. These may be mere hypotheses. They may be reasonable. But for the time being, we haven't seen any files. As we've said a number of times, we look at opportunities closely. And then we decide also based on the qualities of the companies being sold, their size and the price.

Because now more than ever, I think it's safe to say the customers aren't all the same. Some portfolios are more interesting than others. If you have a portfolio with a 40% or 50% churn rate, that means they aren't even portfolios. That would mean simply buying a commercial package. That would be an entirely different approach. So we always look at things very carefully. There's nothing there linked to what you were asking, but we're always focused. As I also mentioned when answering Javier's question.

Now your question on moving parts. Well, this year, there are plenty of moving parts. You were mentioning M&A. Looking at the numbers you mentioned more or less with the targets we acquired in March. And we're working to offset and to things and to stay committed. We want to continue growing during the year. We were successful in achieving good results in Q1. We'll continue working over the next few quarters so that by the end of the year, we can fulfill the commitments that we described when presenting business plans. And I think that covers all of your questions.

The next question is by Francesco Sala, Banca Akros.

I have a few questions, especially in the waste sector. I saw a negative contribution of the waste-to-energy plant in Q1. Is it mainly linked to prices? Or are there some moving parts? Second question is, given the increase in the price of raw materials, especially chemicals in recent weeks, what is the outlook for treatment? Will you be seeing some benefits? Have you seen some benefits already? Or do you think that you'll be seeing some benefits in the remaining part of the year?

And the final question on waste also. Can you give us an update, some details on your geothermal project in Ferrara? Will you continue to focus on this technology? And also on the supply business, a focus on the gas supply. There seems to be more competition. Are there any differences compared to the electricity supply business? And what should we expect in the medium term?

I'll begin from your last questions before I hand it over to Orazio for the waste questions. When it comes to competition, well, competition in gas has always been less compared to electricity, whereas now the 2 markets are more aligned. So what you're seeing is a realignment of something which was very different in the past with lower competition. So we're moving towards a more standard or normalized competitive pressure in the 2 services.

As far as your question on the geothermal project in Ferrara, yes, we do have a project there. We took advantage of the national recovery resilience plan financing in the sector. In district heating, we are the players who obtained the biggest chunk of financing in Ferrara, our district heating network covers roughly 1/3 of the city's needs. It is already fed by geothermal services and by the waste energy plant that accounts for some 85% currently.

So we took advantage of the recovery resilience plant funds to dig 2 new wells for hot water in Ferrara. In Ferrara, the temperature of that water is almost equal to 90 degrees Celsius at [ 2,000 kilometer ] depth. So it's very favorable compared to other territories. So we've already tapped into that source. So we're enhancing it. So all of the district heating in Ferrara is fed by nonfossil fuels.

So it's geothermal and from the waste energy plants, and that allows us to enhance the distribution network by further developing the market. This gives us an advantage, economically speaking. It's also an advantage in terms of how we are accepted environmentally. And then in Brunei, we have waste-to-energy plants, which had only been partially used in terms of the heat they generated for district heating.

But we already have some other district heating networks in the city, which means we don't have to latch new customers into the network. So we're using the national recovery resilience funds to cover a large chunk of the investments that we'll be making to connect these customers. These were projects that we already assessed in the past before the national recovery resilience funding was made available.

And since these funds are available, and therefore, these products now have a better marginal profitability. Orazio, over to you for waste.

Thank you, Christian. Francesco, as far as the energy delta on the waste-energy plant is concerned, which is minus 4%. And over the next few months, the impact will be reduced on the results, meaning that it will be diluted compared to the results. So those numbers will decrease linked to the fact that there will be an increase in the [indiscernible].

Now as per company policy, I'm sure we'll be seeing an improvement in the energy prices that we're seeing today. These are, of course, linked to technical issues that you're familiar with. And as you know, whenever we set every year, we always set 80% to 90%. We always have a 10% to 15% flexibility for our plants and that will allow us to have an even more diluted effect during the year. So things are looking quite good. There will be a lower impact in the next few months due to that reason.

As far as chemical products are concerned, as Christian was saying earlier we are seeing some slight increases, although we have a leadership position plus we are able to use the lack of plants in Italy.

And with our market position, we are able to deal with these slight increases in prices to transferring them to our customers.

Yes. From a broader point of view, along with the increase in the prices of chemicals, we'll also be seeing an increase in the price of plastic, which is good for us. is, of course, if we look at the more general picture, given the current scenario, we do have an advantage linked to our plastic recovery business.

The virgin plastic coming from Asia and Africa is being delayed. And therefore, the request for recycled plastic products is on the rise. There's a growing demand given the context we've been seeing since February 28. And that's something that we are taking advantage of both in terms of volumes and in terms of prices.

Plus, since we are talking about waste, if you consider the context we're experiencing, as far as prices are concerned, of course, we're Italian. We operate in the Italian market. But as we know, Italy exports plenty of waste abroad. We are present on that market with our trading unit. And even there, prices are on the rise due to the fact that transportation costs are on the rise as well. And therefore, treatment prices are stably high. And as I was saying during the presentation, the waste business, this is also leading to an increase in margins, which we're taking advantage of.

The following question is by Davide Candela, Banca Intesa Sanpaolo.

I have 2 to 3 questions for you. The first one refers to temporary opportunities. If we look at the business plan, you have some EUR 180 million, which have to be offset to 2029. And if we look at the performances in 2024 or 2025, we're basically at 80% of that process. Will this process be concluded in Q2 and Q3? Or will you be expecting some tails further ahead to the end of 2026 and even early 2027?

My second question is just a request for further clarification of the numbers in the quarter. Power generation, you posted EUR 12 million, which is much higher compared to the trend we've seen over the past 2 or 3 years. Where does that stem from? Is it linked to what you're referring to earlier? Commodities activities, is there a more structural element that we should look to?

And then my final question, which is linked to power generation, but in a broader sense, over the past 2 years, you took a first step into renewables with the 370-megawatt plan to 2029. These new disruptions on the energy market and the financial flexibility you have, may that lead you to speeding things up in that business segment on a stand-alone basis or just as a way of reducing risks as a way of hedging yourselves on energy supply?

Let me begin with your first question on temporary opportunities. Well, the math you did is right. It's correct in Q1. We covered half of what we'll be doing over the entire year, most of it will be for the first part of the year. We'll also be seeing something at the end of the year. We already covered 50%. And then -- in 2027, we haven't expected anything else.

So 2026 is the last year in which we will be offsetting that decline with structural growth. It was a great opportunity, which we took advantage of. We sped up the company's growth. We sped up profitability creation. We generated cash, which we're investing in structural businesses. So and as we were taking advantage of those opportunities, we committed to never going back, which is a commitment that we are still working to uphold.

And then let me answer your second and third questions together. On power generation, we're doing something extra. But the big spike compared to last year is the contribution from the insurance reimbursement we got. One of our plants had suffered due to a fire was a cogeneration plant, which falls in the power gen field. We're doing something better, all in all. So we're doing well, and we hope to improve by the end of the year.

11 million [indiscernible] isn't the number we'll be seeing. On renewables, we are continuing to work. As you know, we put on 2 axes. On the one hand, we want to increase customer loyalty by helping them produce energy. We help them to set up their plants and to manage them even. And we are also working for ourselves. We are building plants to feed our sites.

We're also building some plants on the market. The accelerator that we all hope for is being delayed. For the most part, we're working on greenfield projects, which we start building from scratch.

but whenever you buy initiatives or projects from others, of course, you have to give away part of the profit. Therefore, we want to continue in the direction we've already defined, and we want to continue to develop our activities in this context. But we want to make sure that we have a limited number of plants exposed to the market.

So we're looking to provide energy locally so we can securitize marginalities and share those margins with customers in terms of the reduction of transportation costs and the system costs, so we can have some good results. So this is a project we have in mind. Of course, we weren't expecting to accelerate very much over just a 3-month period. But there's plenty on the market. We're looking at a number of things without any anxiety though. We want to create value. And we want to make sure that we continue to work on a daily basis on bidding and execution for these initiatives. And we'll be seeing some things this year as well.

The next question is by Roberto Letizia, Equita SIM.

I have one quick question for you and a request for clarification on the production of electricity from waste energy plants, 90% of which is hedged. That's understood. But is that hedging towards third parties? Or is the hedging an internal transfer, which means that, that energy would be available for the retail activities with a higher margin. Is there a value buffer anywhere? Is that energy for third parties? Or is that energy that Hera uses and directed towards the retail market?

Well, there's no real difference. It really depends on the moment in time. Hedging is done at market conditions. If you want to have a based on megawatts of produced energy and the market is 100, they have to buy the same amount on the market at 100, that may be an opportunity, but it's not like there's an extra margin above the hedging because the hedging is conducted on the market in that given moment.

What does change is the moment in which you hedge, although that is a choice we make. And since on the sales side of thing, we hedge what we buy. And as far as production, we always focus on the goals we have. It can be internal hedging or external hedging, which changes [indiscernible] can be maybe EUR 0.50 per megawatt per hour. It's just a few hundred euros. It's a pretty small number.

And I do understand that we've pretty much covered it all. And I'm happy that our answers are in line with your expectations. Roberto, hopefully, that answers your question.

I couldn't understand if the energy is done internally. And if you sell the energy in the retail at 90%, then retail has the waste energy plant production. And if my retail prices are in line with the market, that hedging stays with me. Maybe I'm a little confused.

Well, the answer is very simple, in fact. Currently, we sell 1 megawatt per hour at a fixed price to our customer with delivery over the next 12 months. When our commercial unit signs a contract, at the same time, they have set the acquisition and they set the sale margin. So you closed the acquisition. If you close it with Ambiente with the market, you don't have a real change. You don't have a real difference. What you're seeing is, well, if you bought the energy at a fixed price and you sell it at a variable price and the cost increases, you cash in a margin, of course, that will be, but that's not our policy. We set a commercial model and it's done basically. In a nutshell, that's what we do.

Obviously, if you move the energy that you bought on a fixed price on an internal portfolio and you shift it to a variable price in the hope that prices can increase, well, of course, you can do that, but that doesn't mean you have to be a electricity producer. You can go out and buy energy on the market at a fixed price and then put it in a variable price portfolio. The fact that you're a producer doesn't really change things. That's the choice you can always have.

But it's not something we're interested in. Had we done that in the past? We would have been hit considerably also given our size. So of course, it can be a positive speculation. It can be negative as well. But then, of course, you can always make choices in the market and they can go well or bad. We do have some trading activities. They're pretty limited. But there is risks and opportunities are things we all look at.

No, I wasn't saying there was a mismatch between procurement and sales. So just to clarify things, how much of your fixed-term contracts are renegotiated this year?

Maybe it's 10% of our sales. Can't make an earning compared to waste energy power because the market will have the same price. So when I renegotiate with the customer, we would renegotiate based on the market forward in that moment.

This is very detailed. If you have any other questions, you can ask [indiscernible].

Mr. Fabbri, there are no further questions.

Great. Thank you very much for making yourselves available. And we'll be seeing you for the next quarter report, and we'll get back to work so we can share some great news with you next time. Thank you.

Good afternoon, and welcome to Hera Group's new Business Plan to 2029 presentation. The floor now goes to Mr. Cristian Fabbri, Hera's Executive Chairman.

Thank you, and good afternoon, everybody. We are here to illustrate our business plan today. But as usual, let's begin by giving you our best possible forecast regarding 2025 results with an EBITDA, which stands above EUR 1.530 billion, with a net profit, which stands above EUR 460 million, up 4% compared to last year and with a net debt-to-EBITDA ratio, which is lower than 2.6x. This is a very positive result for us, allowing us to be stable as far as debt is concerned compared to the previous year. With a further growth in profit despite the fact that, as you can see on the graph on the right-hand side, we had a sharp dip in temporary opportunities, which as far as net profit is concerned, have been entirely offset by organic growth.

Over the past 6 years, temporary opportunities have given us an accumulated EBITDA contribution worth EUR 900 million, a major contribution, which allowed us to grow rapidly. And that is something that we are now offsetting by keeping our growth while standing at considerable net profit levels. We still have a slight dip of the contribution from temporary opportunities that will be absorbed next year, but we're quite satisfied with this overview of the 2025 results.

Now moving on to the business plan more specifically. We can begin by basically confirming our multi-business model, a model which is supported by economies of scale. As you know, when it comes to all of the main businesses, we are now among the market leaders in terms of size. This allows us to have business-specific synergies, but it also allows us to create synergies in our activities portfolio. This is a model which allows us to transfer innovation and ideas from one business to the other, ideas which begin on a specific business and which are then transposed to other businesses, but it also allows us to transfer the cash flow generated by some businesses to others as a way of creating opportunities or to secure the cash generated.

The fact that we're a multi-business model also allows us to have a number of growth drivers. It also allows us to seize opportunities in the various markets we operate in, plus we can have a higher customer loyalty rate by working on our service portfolios that we offer to our customers, but we also leverage on the investments we can make in our customer management system that, of course, benefits quality. given the fact that, thanks to synergies, our costs are lower.

Now moving on to the strategy we have defined for each single business. We can begin with the sector's macro trends. Now summarizing everything in one slide is a little complicated, although we did try to extract the main elements, both when it comes to macro trends, but also when it comes to our strategy for the various macro titles, the macro items, beginning with water. As you know, in the water business, we face extreme weather events from floods to extreme rain to droughts. We live in a context in which European regulations and how they are transposed in Italian legislation is marked by an increase in restrictions when it comes to purification with a specific focus on lowering pollutants. Therefore, this sector requires investments. And of course, we also have to face a very relevant infrastructure gap in the sector.

Of course, in the past, our assets were able to benefit from major investments, meaning that currently, they are perfectly adequate, but we have to continue to allow them to evolve by continuing to be in line with these trends, which amplify their impact, especially and will do so especially in the future. That's why we are working to increase the availability and the procurement of water. We are working to reduce leakages in our water distribution activities. And we're also working to improve all of our activities when it comes to sewage.

Keep in mind that our sewage systems date back to many years ago in some locations, whereas the newer parts of the sewage systems were designed also based on rainfall levels. And in the past, these extreme events used to happen every 15 to 20 years, whereas nowadays, it tend to happen every year. So even in this sector, we have worked on improving our infrastructure. We are also boosting or reusing water. And as we do this, as we invest in this direction, we also use innovation and digitization to maximize our impacts and to obtain efficiency on the entire system.

Moving on to energy. If we look at the evolution of trends, even on a 5 -- or on a 15-year span to 2040, what we see is that energy consumption -- rather final energy consumption will be reduced by 20%. An increasingly large final consumption will be driven by electricity. Gas, both due to global warming and due to efficiency and the trend we're seeing, will be reduced. But in 15 years' time, we will still be facing a situation in which 1/3 of the final consumption will be supported by gas and a further 1/3 by electricity. So basically, we are facing a major demand for energy efficiency, for decarbonization of consumption and infrastructure, which needs to be capable of dealing with the energy transition.

Now what is our strategy? When it comes to gas, we will continue to make sure our networks are efficient. We will continue to invest to make sure that they are up to par so that they can be ready to manage green gases, which are another new element in our networks, which will help decarbonization. And when it comes to the electricity grids, we will be increasing our hosting capacity. During the business plan period, it will be up 30%. And with all of these investments, we will also be working to continue to improve efficiency in managing our infrastructure.

When it comes to sales and our activities to support renewable energies, even here, we have a clear strategy, namely, we want to continue to help our customers in their decarbonization path through offers regarding energy efficiency, and regarding the development of renewables linked to consumption centers with a focus of customers and consumption centers, which means to have proximity-driven plants. What this means is that despite being owned by us with long-term contracts, we can supply energy directly to 1 or 2 major industrial customers.

And we are also going to implement CRM. When it comes to customer loyalty, we have a good service level, but our goal is to continue to improve services to customers, both when it comes to our physical networks, but we also want to improve our relations and marketing through the support of our artificial intelligence, something we're already using, and we want to continue doing throughout the business plan years.

Moving on to the waste business. You are well aware of the situation regarding infrastructure in Italy. And you also know that European directives are becoming increasingly stringent when it comes to the circular economy to boost reusing primary and secondary materials. This, of course, gives us plenty of opportunities to expand along with the very fragmented sector. So our strategy is very straightforward. We want to expand our plant capacity so that we can expand our ability to treat waste in our plants. We want to continue to increase our intermediation activities on waste, plus we also want to explore new circular economy potentials along with continuing to improve our global waste management services, the ones that we offer to our customers by increasing our activities portfolio and also expanding our customer base.

Moving on to our strategic priorities, the ones that we want to focus on. There is a certain degree of continuity in our activities. We have a very strong focus on value creation. We want to make sure that our growth isn't purely based on volumes. We also want to increase profitability. At the same time, we also want to continue with our hedging model, allowing us to sterilize the impact of all external macros such as inflation, the cost of money, the fluctuation in energy prices, which due to how the business is made and due to our choices, we try to fully hedge.

And our multi-business model is very helpful in this regard because as I was saying earlier, we have different drivers leading to growth. And therefore, we can allocate lower risk when it comes to the execution of the drivers, although in the past, I think it's safe to say that we never had any major negative surprises on execution.

Sustainability is also a theme, which has always been a part of us, not as a cost, but as a further opportunity to create value because in this regard, we want to take advantage of all of the new constraints and targets set by the European Union so we can find the right space between obligations and incentives, allowing us to work in different sectors and supporting customers to find room for profitability in the development of our assets and in the things we want to do, which means that we will continue with these strategic priorities, and we will continue to allow our business to evolve and grow.

Now let's take a look at what we intend to do when it comes to the 3 main pillars in our strategic priorities, beginning with value creation. On the left-hand side, we have the internal part of the company. On the right-hand side of the slide, you can see the effects in terms of total shareholder return. Beginning with inside the company, you can note that our goal is to continue to have a 400 basis point spread and the difference between our ROI and the sector's WACC with a structural ROI growth. In 2024, we had an 8.8% ROI, which is the structural ROI net of the temporary opportunities contribution. So we want to have growth, structural profitability and a 25% growth in net invested capital, which means that these are the 2 levers we want to use to increase profitability.

If we then look at the effects on total shareholders' return, structurally speaking, if you consider the structural EPS, we have a 6% growth and a yield on dividend per share, which is above 4% on average throughout the business plan, which means that we are confirming a double-digit TSR.

Moving on to the topic of resilience. You are familiar with our approach to hedging linked to the external macros, which may have an impact on our business. We want to have full control of the business. We don't want to be exposed to any volatility coming inside the company from the outside. We want to be -- we want to produce how exposed we are. As an example, I can cite the hedging on commodities, especially energy, which, as you know, has proven to be very effective even in times in which prices went up in a major way.

When it comes to long-term risks linked to climate change, we have been working for quite some time on improving our assets and network resilience, and we will continue doing so because this helps us, on the one hand, to improve the overall profitability. And on the other, it reduces any potential impact there may be from any extreme events on our businesses, which gives us a double advantage in the future.

If we turn to the topic of sustainability, we confirm that we will continue working on 3 macro axes: decarbonization, which means that we are confirming our path towards net zero in 2050. And here, our goal is to work together with customers to extract value both for ourselves and for them throughout this process. EUR 1.3 billion of our investment plan, which accounts for EUR 5.5 billion totally will be invested to improve this axis. EUR 2 billion will be used to implement all of our goals linked to the circular economy, whereas EUR 2.6 billion will be focused on improving the resilience of our assets.

I kept innovation as the last topic. Innovation, when it comes to strategic levers, is underlying in all businesses. And when it comes to innovation, we work in a number of different directions. On the one hand, we want to innovate our assets. Think of the frontier activities we're working on when it comes to carbon fiber or rigid plastics. We are basically opening up new business opportunities and growing volumes on that part of the market. But we're also working on cutting-edge initiatives such as hydrogen. In this case, our investment is almost entirely financed by national recovery resilience plan funding. And next year, 2 of our plants will be up and running.

If we then focus on technology, in this case, this is a very broad world, of course, because in this case, we can use both traditional technology to improve the digitization of our assets and networks, which leads to us having 2 effects. On the one hand, we can better control our activities remotely by increasing the efficiency and effectiveness on our networks. But we also want to be able to acquire data sets that can help us evolve the business with prediction-based models.

Along with these applications, which use more traditional technologies of which we apply to make our business more digital, we also have innovation regarding certain types of equipment. We have patented our gas meter, which has safety features linked to earthquakes or a cut in gas in households is able to detect gas leakages in the household to guarantee the safety of those who use gas. But we also have valves, which we use in our gas networks, which can be used remotely, allowing us to intercept gas leakages increasingly swiftly to improve safety, but also to reduce methane gas emissions.

And then we also have devices that can help us measure climate change and rainfall levels to detect any possible landslides or land movements, which in the long run can lead to damage. And even in this field, we are investing so that our networks can be equipped with these types of devices and equipment.

Finally, artificial intelligence can support our business. In our networks, for instance, we use digitalization and AI to create the digital twins of our networks, allowing us to better manage our flows but also to identify damage and focus on predictive maintenance to reduce leakages, allowing us to increase efficiency, but so that we can also allocate capital in a more effective way as we do the investments to renew our infrastructure. But we also have process applications, which we already use in certain areas, specifically the market, and we will have to push in this direction to support both our predictive models through machine learning, but also to use automation that we are going to implement increasingly throughout the business plan years so we can have pieces of our process, which aren't supported by AI, but which are built with these agents so that we can further optimize our activities and be increasingly efficient and effective so we can use our resources to improve performances or for investments.

Moving on to our capital allocation strategy, our investments. We have a clear strategy, beginning with 3 priorities, which act in synergy between themselves. We allocate most of our development to our core businesses with the goal of increasing our investments to accelerate growth on core businesses. The current investment plan, which is up compared to last year, compared to the previous 5-year period now envisages an investment level, which is 40% higher, generally speaking. We also have the goal of keeping a balanced business portfolio because as we explained earlier, this gives us a certain number of advantages and stability and predictability over time, which allows us to continue to be resilient and profitable in our business, but it also allows us to maintain a good level of financial flexibility so that we can take advantage of any opportunities which are not included in the current business plan.

I was mentioning the fact that our investment plan is worth EUR 5.5 billion, which includes EUR 0.5 billion, which is covered by financing, which don't have to be repaid. This goes to EUR 2.5 billion to maintain our infrastructure and the remaining amount to develop further infrastructure. EUR 2.6 billion is included in organic development. And in the business plan, we also have an M&A contribution, especially in the waste sector and in energy. 60% of our investments will go to regulated businesses.

In this context, let's take a look at the evolution of the profitability of each individual business, taking into account that for the regulated businesses, we have included the evolution of the regulatory WACC beginning with 2024 and a reduction we've seen in 2025 of the main businesses, which, as you can see, stand at around 6% recognized WACC. But we are also working on the liberalized businesses, especially when it comes to the treatment of industrial waste and waste more in general, which will increase its profitability based on our commercial development and on the new plants that we will be building, moving up from 11% to 13.6%, whereas for energy supply, structurally, in 2024, we had a 20% profitability, and we wish to confirm that profitability even in the future business scenario with a profitability level that we feel is already at a good level and which we want to maintain.

Let's move to the development brought about by the investment allocation on each individual business. As you can see, the structural growth of each business is in line in the business plan period so that at the end of the business plan, we will have an EBITDA contribution, which is very balanced between the 3 business areas.

Moving on to a closer look at how we can generate and then allocate our cash flows. In this slide, you can see the various dynamics per business, beginning with waste, a business with a free cash flow equal to EUR 1.6 billion over the business plan period. And after net working capital and maintenance CapEx, we have a free cash flow worth EUR 0.8 billion before our development investments. In this case, we consider both the organic growth and the M&A contribution we've included in the business plan so that we will then be reinvesting the entire cash flow generated because this is a business that we have plenty of investment opportunities in with a good profitability.

Energy. In this case, we generate EUR 2.3 billion in operating cash flow. Maintenance investment in this case is limited to EUR 600 million with a free cash flow worth EUR 1.7 billion all in all. We mainly focus on sales to customers. We have a development investment, which is very limited. And even the investment on renewables along with the models I was mentioning earlier, which means that we have EUR 1.2 billion in cash flow that can be reallocated partly to support our dividend policy and partly to grow in networks, which absorb more cash than what they generate.

And therefore, the operating cash flow of the networks is in line with that of the energy sector. This is a very capital-intensive business. And therefore, the free cash flow stands at EUR 900 million with a reinvestment on development worth EUR 1.4 billion, which leads to the growth of RAB, which means that we will be using the cash flows, and we will be securitizing them in the businesses, the regulated businesses, which have major visibility for the future. Not that we have any concerns for the others, but also because they are linked to our hedging policies, and we will continue to grow in this regard. But obviously, when it comes to maintaining a balanced portfolio, we are working to make sure that our networks grow even quicker than they would in a stand-alone -- on a stand-alone basis.

Now we saw the overview with a business-by-business breakdown. We can now look at the group cash flows. We'll begin with EUR 6.2 billion in operating cash flow. And then after having allocated all of the maintenance investments, we will have a free cash flow worth EUR 3.5 billion, EUR 1.4 billion will be used for dividends, EUR 2.5 billion will be used for development CapEx and for M&A. And the EUR 300 million will be the debt that we will be consolidating for M&A with an overall debt level, which will be up EUR 700 million, which is in line with what we had forecast in the previous business plan with a financial leverage level, which stands at 2.6x, which is consistent with the level that we expect to have at the end of 2025, which still guarantees a certain degree of financial flexibility for any further opportunities, both in terms of M&A, which aren't -- which still aren't obvious, but which do tend to come up with a certain degree of frequency, which will be focused on the main businesses with a very careful focus on prices so as to not dilute multiples, but also for any extra investments, which may be authorized over the next 12 months, which would then be reincluded in next year's business plan when we review it, which means that we have room for new initiatives and for further growth compared to what we have inserted.

We can now move on to the bottom line, the overall effects. Now if we consider the growth of structural profit, you'll notice that the CAGR stands at 6%, which is also linked to the major initiatives we're working on. Keep in mind that we only consider the structural part because as usual, we don't include any contributions from temporary opportunities, which aren't included in the development of the business plan. So we basically only look at the structural evolution of our business.

The good results we obtained in 2025, and the increase in our targets we expect to obtain in the business plan, along with the financial flexibility that we will have for the entire business plan period allows us to be confident and to increase our commitment for future dividends. As you know, we guarantee a floor when it comes to our dividend policy, [ EUR 0.16 ] per share. Last year, we're expecting to have a level worth EUR 0.17, whereas at the end of this business plan period, we will be up to EUR 0.19. And in June, we will be paying dividends for the 2025 results, and that will go up some 7% compared to what we had paid in 2024. So even in this case, we will continue to increase our profit and our overall dividend levels.

We now have a few slides to focus on the industrial evolution of our main businesses, beginning with energy before I give the floor to Orazio. In energy, beginning with our main asset, our customers. And in the business plan, we were confirming the evolution of our customer base, the one we expected. And based on that evolution, we will be maintaining a portfolio level equal to 4.5 million customers even at the end of the business plan period. In this case, we begin with 4.6 million customers at the end of last year with a significant 1 million customer growth. Here, we're still seeing a certain degree of churn on STG. The temporary opportunities, of course, are linked to some supply points, which won't be expected in the future. They will disappear. Then we have a small contribution from our commercial activities and the contribution from the M&A activities that we expect to have in this sector.

One of the challenges that we have proven to be able to meet is the sale of value-added services that we included throughout the supply chain, all the way from retail to the major industrial players with a portfolio of solutions that can be either one-off or recurrent and which we are offering to our customers with a good feedback from them. So this is one of the assets we can use along with other levers, which allow us to increase the value of our customer assets.

Let's now move on to the dynamics we're seeing financially. If we begin with 2024, and the EBITDA deriving from energy supply, it was very consistent. This was an EBITDA, which, of course, also included the contribution of temporary opportunities worth some EUR 180 million. And as we're saying, temporary opportunities will be completely removed throughout the business plan period. And therefore, the adjusted figures for 2024 were at around EUR 495 million compared to an adjusted level in 2023 when we had 3.6 million customers, which stood at EUR 381 million. So that at the end of the business plan period, we will be at EUR 607 million in terms of EBITDA with a 4% structural growth, which begins on the evolution of the commodity margin, especially linked to a reduction in overall margins linked to the normalization of certain trading margins and others linked to structured customers we have, which during the energy crisis were very satisfactory. Although with the normalization of prices and market oscillation, these will be reduced also given the effect of competition.

We also have a major contribution from the free market, also linked to the transformation of STG customers, plus we also expect to obtain a good contribution from customers, thanks to our value-added services. Currently, they represent 7% of our customer base, and we expect that percentage to grow to 17% at the end of the business plan period. Plus, we also have activity regarding public lighting points. And we also have a contribution from an M&A, which brings us to the [ grant of ] EUR 607 million. So again, we have a number of drivers that can support this structural growth of ours.

Even when it comes to generation, we expect to have a positive contribution here given the investments we're making on renewables with a close focus on securing cash flows with sales directly to customers, which means that we can build plants and then give them the plants or through assets we own, which will then supply energy to customers that we have already identified and signed contracts with.

Let me now hand it over to our CEO for an overview on networks and waste.

Thank you, Cristian. Good afternoon. We are here to give you a briefing on our future activities. Let me begin with waste. Waste has an exciting story. We are leaders on the market. We have planned a number of actions that will allow us to have even greater returns for our shareholders with new solutions and new paths ahead. The waste treatment market is worth some 80 million tons per year, both for urban and industrial waste. We are the largest Italian player with a 10% market share. We are fully integrated.

The fact that we are leaders despite only having 10% of the market share shows how fragmented the market is. There is a significant shortage in capacity. And we wish to consolidate our presence even in mediation activities, even with foreign countries. We want to focus on treating the material with the highest value added in our plants, but we also want to have increasingly large visibility on flows and on prices for the main European markets.

Now this slide shows you how we are implementing our strategy. We want to continue expanding in our core segments, including treatment, recycling and soil remediation. We expect to significantly expand our B2B activities, which will be accompanied by a significant return on invested capital, thanks to greater efficiency, economies of scale, consolidation and expanding our intermediation activities. This growth will be supported by 4 levers. The first driver is the organic development of our asset capacity. The second driver is the development of partnerships with foreign players. The third driver is the development of external lines. And the fourth is an increasingly visible contribution to the increase of margins stemming from our global waste management services.

Now let's focus on the individual businesses, beginning with treatment. We hold a 10% market share, which means that we have plenty of room for growth. In this case, we are working to expand our assets. We have invested on the fourth line in Padua, which is the largest investment on waste-to-energy plants in Italy. This is an investment worth EUR 130 million. And we also have the waste energy plant in Montale, Tuscany, which is a new element of this Business Plan. We are now managing that plant, and we will continue to invest in it to improve its efficiency and its profitability.

We are developing infrastructure on treatment, including waste energy plants. This will allow us to increase our treatment capacity by 800,000 tons per year. To that, we also have to add a further expansion worth 400,000 tons per year that will stem from our intermediation activity. And this is something we're doing to meet the demands from our customers and partners, including Eni and Fincantieri.

In 2026, as you already saw, we have already started using the lever through external lines. We will be becoming a leader in water treatment. And in this waste segment, we are seeing a significant growth in demand, beginning with our industrial partners, and it will continue to grow due to 2 reasons. First of all, the increasingly stringent directives and legislation, plus the water shortage, which will continue to increase. And therefore, we will have to invest to save water, to reuse water and to treat it.

This is yet another element, which is important and strategic, which we are adding to our vertical integration plan, which is what we did also with the ACR company, first for remediation, which, as you know, is continuing to give us some very satisfying results.

Moving on to recycling. In this case, we are leaders with a 20% market share. This is a market with macro trends, which are supported by the PPWR and SUP Directives, which are increasing the demand for recycled plastic throughout the industry for packaging, for food and beverage, for home personal care. So in this sector, we want to increase our asset base for low-density plastic. But we also want to develop a new plant for rigid plastic, plus we want to make sure that our carbon fiber plan continues to work with which we're creating a new market.

So besides the increase of our productive capacity to intercept this increase in demand, we're also working on diversifying products while still maintaining a foothold in the high-quality sector, which makes us attractive to our customers. And our customers continue to be the very top customers. So we will continue to focus very much on our European customers, which are more keen on a very careful circular management of waste. And in Europe, in fact, we are the second player in terms of turnover amongst the multi-polymer integrated players. And as far as this business is concerned, let me also add that we expect to grow externally by using our branch in Poland. Also thanks to new projects that will allow us to intercept the increase in demand for recycled plastic in that country.

And finally, the third axis is soil remediation. Even here, we have a good leadership, which is growing very much, thanks to the synergies that we're able to extract by integrating the ACR company, I mentioned earlier, and which will continue to support the growth of soil remediation as a business and the increase in the volumes of soil treated. Recently, in fact, the European Union has launched a strategy to regenerate soil with a goal to neutralize soil degradation by 2050. Environmental remediation is an essential tool to implement this strategy. The Ministry for the Environment has identified a number of sites which are in the national interest. 13,000 such sites have already been mapped for a total remediation value worth EUR 5 billion in terms of turnover. And we wish to intercept this growth potential by supporting activities through major development of our plants, not just through organic growth, but also through M&A transactions.

I'm sure you're aware of the Gerotto acquisition, which allows us to have robots and machines allowing us to be more efficient. To that, we also have to add the organic investments we're making such as our new soil washing plant. So this is the strategy that we expect to implement to increase our market share by leveraging on our leadership and we'll see now how the strategy will create value.

On the slide here, you can see the economic contribution of the strategy I mentioned. We have a structural growth with an 8% EBITDA growth. And if you compare that figure to 2024, which benefited from profits stemming from the sale of energy based on contracts with energy prices, which still hadn't been normalized. And as you can see, the first column is worth some EUR 35 million. This growth is supported by a number of drivers and it is also supported by the major investments Cristian mentioned, which are included in this business plan.

If we only count development CapEx for this business, we're talking about EUR 800 million. Our target EBITDA at the end of the business plan period is equal to EUR 481 million, which is supported by a major increase in volumes. And I'm referring to the special waste volumes, which, of course, drive the growth, and they will go up to 4.6 million tonnes with an almost 7% progression. We also have an increase in the recycled plastic volume equal to almost 150%. We also have the volumes generated by remediation.

And as you can see from the graph, growth is also supported by our external growth, which was reached -- 50% of which was reached by the Sostelia transaction, which was closed 2 days ago. And we will continue to use this lever whenever the targets we appreciate become available, targets from which we can then extract value.

So when it comes to waste, this business plan is increasing our growth targets. It is marked by a limited risk profile because as you can see from the slide here, we are diversified with plenty of drivers. And therefore, these goals are supported by our competitive advantage, which are solid in a market which, as I was mentioning earlier, is still very short.

Moving on to networks. To us, networks are essential in our portfolio. And over the upcoming 5-year period, when it comes to networks, we will be working on 4 axes, including the energy transition that our Chairman already mentioned. We'll be focusing on efficiency. We'll be focusing on resilience. And all of this will be done through an intense use of innovation so that we can increase advanced levels of efficiency and security with a very broad use of artificial intelligence.

Now in order to be more efficient, the strategy is also based on what we refer to as the extended model. In other words, we want to use our decision centers on our various territories, including customers and authorities with the goal of creating development and value in a very visible amount of time.

Now the strategy that I announced will lead to a growth in all regulated businesses with a special contribution stemming from water. The first column in the graph, which is worth over 50% of the entire growth, water. Our water business, of course, is the queen of our networks. Also, if you take into account the macro trends we mentioned earlier, these assets are strategic because the context we operate is marked by increasing water shortages. We also have a very high demand from the industry. The water will be increasingly less available due to climate change. And therefore, our strategy is based on an approach that can allow us to develop an industrial model, an extended model, a circular model, which is efficient, safe and innovative. And this strategy requires a major amount of investments, which underpin the growth of our EBITDA with an increase in our RAB worth EUR 700 million. And we are convinced that this growth will continue even beyond 2029, and it will be accompanied by a constant increase in efficiency that we have grown used to so that we can continue guaranteeing the premiums from the regulator.

The second column in the graph shows the contribution of gas networks, which is worth EUR 35 million. Even here, this is supported by a RAB increase worth EUR 300 million. Even here, we have an extended sustainable, efficient and innovative model. Nowadays, electricity produced by the gas molecule is still much larger than the electricity produced through electrons, and it will continue to be this way for many years.

In Italy, the distribution networks, electrons will match gas molecules only beginning in 2030. That's why we need to have networks which are safe, adaptable to the energy transition so that they can host green gases. So in a nutshell, this is a sector which still requires plenty of CapEx as we wait for the TOTEX, which we expect to have beginning in 2028 for the gas networks. But already since 2025, we will continue to cover operative costs all the way up to 2027. So something that ARERA has guaranteed to the major players in the sector. So this is a plus that we can benefit from following the [ GAAR ] ruling pertaining to the 570 law for 2019.

Moving on to electricity distribution. In this case, we have a smaller contribution, obviously, also given our -- the size of our business compared to others. Over the past 3 years in electricity, we have invested very well and very much all the way to EUR 170 million per [ pod ] compared to a market average of EUR 100 million. So we are solid, we're efficient. We are able to meet the increased demand for electrification. The business plan envisages a similar type of investment, which is required by the electrification of consumption phenomenon and by distributed generation.

Besides investments, we also have major contributions from the regulator, which has already introduced the TOTEX system in 2024, and which recently also confirmed the WACC for the regulatory period. As far as this business is concerned, let me also mention the contribution stemming from M&A, which we expect to be EUR 20 million, which is external growth. And even this business plan confirms the fact that we wish to continue consolidating the sector, which is still extremely fragmented, beginning with the water sector.

If we look to the highlights on the graph, the growth stems from efficiency, not just investments. We also want to reduce losses. We will be using up to 15% of the water resources that we manage. So it's water reuse. We also will be using technology for the implementation of our predictive maintenance model to the entire group network so that we can be efficient at very high levels for all of the group's assets.

And then finally, as a way to safeguard our investment assets, which is worth EUR 1.5 billion on our gas assets. I also think it's worth mentioning that we are the very first in the sector to have experimented gas distribution with a 10% hydrogen blend, which has been recognized by the Ministry for the environment safety and the environment, which means that our network is pretty much ready to post green gases. And therefore, regardless of how quickly these gases will develop, we are already leading, thanks to our asset readiness project, which means that our network will be ready to take in these green gases.

Moving on to the final slide. We've already seen what the growth drivers are. This is the CapEx plan, which is worth 170% of the cash flow generated by the business itself. And we expect to reinvest even the liberalized part of the portfolio. As Cristian said earlier, this will allow us to concentrate 60% of the group's CapEx on networks, thereby promoting an increase of ramp up to 30%, all the way up to EUR 4.7 billion. You can see the distribution of the RAB businesses, most of it is in water, which will be up to EUR 2.6 billion, which is plus EUR 700 million. The regulated return that we have factored in is shown at the bottom of the slide, and you'll see that the figures are stable for all of the years, also given the recent ARERA decision. So as you can see, we have a very resilient asset base vis-a-vis the macro variable component. And they continue to be at the very core of our business with very high value, with good returns, and with a low-risk profile, and with a positive impact on the economic and financial profile of the entire group.

Thank you very much. And I will give the floor back to the Chairman for some conclusions.

We went over the 2025 results, which are solid, which will allow us to continue on our structural growth path and to reduce the growth stemming from temporary opportunities. Our financial leverage profile is one marked by a debt-to-EBITDA ratio equal to 2.6x, beginning at the end of the business plan. The structural TSR stands at around 10%. We have a new dividend policy, and we also have the financial flexibility to look at any new and possible opportunities, which still haven't been identified and therefore, which haven't been included in the new business plan.

So this is our business plan in a nutshell. We invested 1 hour of your time on illustrating it, and now we can open the floor for any questions or comments.

Our first question is from Javier Suarez, Mediobanca.

I have 3 groups of questions. The first is on the financial structure of the company. Slide 15 shows that there is still opportunity for growth for the company. You've included these possibilities for M&A, which you define as visible. But in 2029, net debt to EBITDA will still stand at 2.6x, which is a major difference compared to other players in the sector. And that is the maximum acceptable leverage for the company as you define it. But besides the strategy of having an optional balance sheet, which I agree with, but where are these opportunities? Are they in your reference business or your reference territory? Are these opportunities there, which means that you continue to have this major financial flexibility? So where do these opportunities lie? Is it still in the waste business in your reference territory? Is it in the supply business where you may look into some targeted acquisitions? Where are you seeing these opportunities for M&A? Or are you seeing other types of opportunities with this balance sheet, which have nothing to do with the acquisitions or in your reference businesses or your local territories? Just to understand how you build the business plan.

The second question is on the supply sector. The business plan is based on an assumption on what will be happening beginning in 2027 with the electricity customers you acquired. At one point, they will be going to a liberalized market. This will mean that there will be an increase in the profitability of these same customers. Is it safe to say that your business plan envisages a speeding up of the bottom line in the second part of the year, especially linked to the supply business with this dynamic? Or what other dynamics should we be looking at in the supply business?

And the next group of questions is on a strategic update regarding the recent acquisition you made of Sostelia. What is the strategic reasoning behind the acquisition, which operates in the water treatment sector and how the acquisition of this company can be good in terms of extracting synergies and increasing the efficiency of your business? What about the AIMAG transaction? Do you still have an opportunity to control of it? And finally, what are the assumptions regarding the renewal of the electricity concessions?

So let me just finish taking notes here. Now beginning with the financial structure. Now clearly, when it comes to the organic investments, we still have further room to increase organic investments in the regulated sectors. Because as I was saying, we have opportunities in all phases of the water cycle beginning with the availability of water and securitizing the availability of water. And in the plan, we've also envisaged a number of initiatives to increase the amount available, which connects various procurement sources so we can create a more resilient structure, which in turn guarantees the availability for all parts of the network so we can have increased procurement for the local networks.

We have to invest on water distribution in a major way so that we can reduce network leakages. In terms of linear leakages, -- and the linear leakages measure the quality of the network because leakages in percentage don't take into account the density of customers. In other words, how many kilometers of networks we have for each of our customers. Whereas when we measure linear leakages, what we see is that we are less than half of the Italian average. We're in line with the European average, and we still continue to invest.

When it comes to the sewage and purification system, we have a certain number of territories in which we are reviewing the sewage systems to take into account the greater intensity of rainfall, especially in those areas in which we have mixed sewage systems, which means that not only do they serve our water customers sewage systems, but they also collect rainfall, which means that we have to redesign and redefine a system, which in some places, dates back to the middle ages, which means that we have plenty of space for further investments, all the way up to purification.

Even here, a very stringent legislation which goes beyond the business plan period, which still requires plenty of investments. So again, we have plenty of space for organic investments, which we are speeding up, but we can still do more. Also, when it comes to networks, Orazio mentioned our electricity networks in which we are working on enhancing the network, and we have plenty of room to do that. And when it comes to gas distribution, we currently have the need to invest in renewing our infrastructure.

In 2040, this infrastructure will still continue to cover 30% of our end customers' needs. Obviously, therefore, the infrastructure needs to be kept efficient, safe, and it needs to be enhanced technologically. So in this sector, we still have plenty of room for major organic investment. When it comes to growth through external lines, well, the sectors that we have the most files on is waste. And just recently, we completed the acquisition of the Sostelia company. The whole process will be completed by the end of March, and its contribution covers already 20% of what we've included in the business plan.

But again, we have plenty of files that we are looking at. And the challenge here is to find a target which has the right price vis-a-vis the value we give to that target and what our expectations are regarding that business. And again, there are plenty of files. We are very selective, but there is a lot of excitement. And similarly, when it comes to energy supply and energy efficiency, we are starting for consolidation in a sector with plenty of players, and it is a sector with challenges, which will [indiscernible] because even there, something seems to be changing, although very slowly and less intensely.

So these are all the elements that we're looking at closely. The size of these transactions may be smaller or larger, but that's the direction that we are continuing to head in. Again, going back to the Sostelia example, the Sostelia transaction is one that has many value creation opportunities from many different points of view, beginning with the water treatment business and the water can be polluted either by the industry or by the integrated cycle. And in this context, we will be facing increasingly stringent legislation requiring major investments. And that is a sector which will require very high levels of management capabilities, which means that in this case, we can create synergies both in the waste sector and in the integrated water cycle.

So this is a strategy we have, and this is the visibility we're sharing with you in terms of how we're looking at the files we have also given the fact that the sectors we operate in are still very fragmented and with plenty of opportunities for further consolidation. Again, in the waste business, we are the market leaders, and we only have a 10% market share. That is a proof of the fact that there is plenty of space for further consolidation. When it comes to energy supply, we have plenty of different types of phenomena, which intersect and which have different ways of developing throughout the business plan period. We're seeing a normalization of margins in certain customer segments that will lead to an overall reduction of the margin.

Then we have the evolution of the margin with STG customers moving to the liberalized market, which is linked to the market margins. Many customers are already preferring initiatives and solutions, which are focused on decarbonization or they're also looking at fixed prices given the major external uncertainties, and those aren't guaranteed to STG customers. So we're waiting for 2028 when that shift will happen. Then we have the normalization of the last resort market, which will continue throughout 2026. and that certainly has a negative trend. And then we have a progressive growth stemming from production and decarbonization services for customers.

So these are the macro trends and moving parts we're seeing regarding the margin drivers in energy supply. We also have other items which moving linked to adjustments in margins and other fine-tuning linked to the settlement sector, which we will continue to work on throughout the business plan period. Moving on to AIMAG. Currently, the public shareholders are trying to understand what needs to be done to deal with all the open questions regarding the company's future. So basically, they're brainstorming to try to find a solution and give a future to the company. And regarding all of that, we will simply have to see what the time line and the way to operate will be in the future.

Now the reasons which led to the agreement last year are still very reasonable. And we just have to find the right way forward, which is satisfactory and fully compliant. As far as the renewal of concessions is concerned, we are in a condition of continuity everywhere because there are no conditions for tenders anywhere. Even as far as electricity is concerned, we have included remunerated investments included in the RAB given the effect of the renewal of concessions. We're waiting to see what the regulatory news will be. So basically, we are in a condition of continuity.

Also taking into account the fact that organizing a tender requires plenty of time. And to date, we have renewed all concessions either in the waste sector or in the waste collection wherever there have been tenders. Because based on our skills and the experience that we have, our over 10-year experience, we were reconfirmed in the management of those services. I think I've covered all your questions. Hopefully, that answers everything.

Of course, Orazio wanted to add something regarding the industrial value of Sostelia.

Javier, you were asking us why we made that acquisition. Well, first of all, because it allows us to tap into Sostelia's technical know-how. They are the only ones on the market as far as we're concerned, who can design, build and manage civilian and industrial water treatment assets. And that is related to the cost efficiency efforts we're making. We are looking to subcontractors. We're working with industrial players and therefore, we're able to use their very high-level industrial know-how with a tailor-made service. And this is a very high competitive advantage for us because, again, they are the only company which is fully integrated in designing, building and managing.

They are a full-service company. And as Cristian was saying, this gives us a further competitive advantage stemming from the synergies, stemming from our industrial customer portfolio, simply by matching our databases, which means that we can sell services to Sostelia customers, the ones we already offer to our industrial customers and vice versa. Our industrial customers will be able to take advantage of Sostelia's services. So this is the cross-selling approach, which will certainly give us major synergies similarly to what the ACR company has given us in the remediation sector.

So this is a vertical integration, which I'm sure will lead to a major growth in margins.

The next question is by Emanuele Oggioni, Kepler Cheuvreux.

I also have a few questions for you. The first is on the retail business. The 4.5 million customers at the end of the business plan are the same number you had in the previous business plan, except it moved a year forward. Although the EBITDA of the previous business plan to 2028 was at around EUR 586 million EBITDA, whereas in 2029, it is above EUR 600 million. And based on what you've already commented, basically, in the business plan period, you don't expect a general competitive pressure or a reduction in customer margins, something which other players mentioned in previous conference calls and in previous quarters, although not in a very transparent way. And there is the risk of further competitive pressure, thanks to incoming players and the move of customers from one company to another.

But based on your numbers, it would seem that given the same number of customers, you have a better mix and you're improving the absolute value of EBITDA throughout the business plan period. So that was my first question on retail.

The second question is on waste. And then I have a third question on networks. The second question on waste. Even here, we're seeing a growth in CapEx from EUR 1.1 billion in the previous business plan to EUR 1.2 billion, which means that you have an extra EUR 100 million in terms of CapEx with an EBITDA, which is flat for the most part because at the end of the previous business plan, it stood at EUR 470 million EBITDA, whereas in 2029, we stand at EUR 480 million. In your excellent slide on the return on invested capital, waste treatment and waste collection have returns which are in line, if not slightly above the ones you had in 2028, which is the previous target -- the previous business plan target to 2028.

So apparently, on the one hand, there was a higher return on invested capital. But on the other, in 2029, the EBITDA appeared to be flat compared to the previous business plan version compared to a higher CapEx.

And then a third question on water. And the concept here is similar to what I already said for waste. Even here, we have an increase in CapEx, although the RAB is flat. It's a rounded figure, EUR 2.6 billion at the end of the business plan period, which is what it was in the previous business plan. And it also has a flat EBITDA, roughly at around EUR 360 million in the old business plan for 2028 and similar in the new business plan. If I remember correctly, this can be partly explained by the different consolidation perimeter. In the previous business plan, you included AIMAG, which had a major share in networks and water, whereas now AIMAG is no longer considered. So basically, there's a different perimeter you're considering when it's actually a different mix.

And then one final question for the short term for 2026, can you give us some moving parts. I know you don't share figures, numbers or -- but I just wanted to know what the main moving parts are in terms of EBITDA by division compared to 2025. And then can you give us an update on the net profit year-on-year? Is it in line with the business plan trend equal to 6% or not?

Thank you for the questions. Let me try to answer all your questions and to compare it with this business plan with the old one. Now energy supply, there is competition. In the past, our growth targets and our growth results allowed us to grow our customer base consistently. whereas this year, we considered a solution which was in line with what we had last year, meaning that our customer base is stable. That's the challenge we face.

Now why is the overall business contribution up in this business plan compared to the last version of the business plan? Well, 2 things. The 2 most important things are, first of all, that the goal we've given ourselves is linked to the increase in value-added services. And we also expect to increase our renewables with a few extra millions with this model. I'm saying this because last year, we were still seeing the last effects of the Super Ecobonus, and we had the need to basically reset all of our activities. So we were a lot more cautious in this regard and with a few initiatives, some of which have already been concluded, others are being concluded, we're seeing the opportunity of investing in energy efficiency with multiyear contracts, which then guarantee that we can manage the business.

We can also develop the business in public lighting, where we are increasing the public lighting points that we serve progressively. So lastly -- last year, excuse me, our M&A per business did take the AIMAG profile into account in the mix with a higher percentage that led to a lower contribution in terms of energy supply and a higher contribution in terms of networks.

In terms of the impact on EBITDA, but also more in general on RAB. Let me just try to go back to the numbers you mentioned. Last year, with AIMAG's contribution, we had a RAB worth BRL 4.5 billion. This year, our consolidated RAB is EUR 4.7 billion, which stems from having replaced the AIMAG RAB part with a new investment plan, which implements the growth of the overall RAB on the total numbers.

Regarding the EBITDA growth in networks, we have a visible growth compared to the figure we had seen last year, equal to EUR 17 million or EUR 18 million with a lower M&A contribution. And we can see that very clearly.

In the waste business, let me just say something before I give the floor to Orazio. As far as the business plan is concerned, we have a growth in the contribution to 2029 compared to 2028, generally speaking. And as far as investments are concerned, besides the fact that the numbers are a little bit rounded up or down, over the 5-year period, we're pretty much in line. I'm trying to find the right page. Your questions are very specific on figures. So I'm trying to give you the right ones.

Last year, on development CapEx and M&A, our investments were worth EUR 1.2 billion. This year, we're a little higher than that, EUR 1.4 billion. But compared to last year's figures, which are pretty much the same, we also have to consider that as far as development CapEx is concerned, we also included the M&A debt, which means that when we consider M&A, we have the value of the cash used, which is higher for an extra EUR 150 million to EUR 160 million, and that justifies the difference you saw in terms of cash.

These are the macro numbers on decimals. And then, of course, the numbers changed after the second dot after the EUR 1 billion. So it's a few dozen million, which aren't anything major compared to the overall changes in the numbers. If we then look to the final contribution, Orazio, I'm sure will mention the fact that we also have a small contribution linked to the sale of energy produced, which is lower than what we had expected in last year's scenario with a slightly lower contribution as far as this item is concerned.

Let me just add something on networks. Emanuele, as far as networks, in 2023, which is what the previous business plan was based on, we didn't have the electricity ROS, which then appeared in 2024, which adds to all the things Cristian was saying earlier. And then we also have to consider that between 2023 and 2024, we also had the WACC update worth 80 to 90 bps for electricity and gas, and it was worth 130 bps for water. So we have the topic of the electricity ROS, which only arrived in 2024. So the beginning was slightly different.

As far as waste is concerned, there is a reference to the electricity margin, the electricity generated by waste-to-energy plants, which is something that we have to take into account, and we have made forecasts which are slightly more conservative for the next few years in this business plan compared to the previous business plan. If we then look at the structural CAGR in waste, it's basically 8%, which is 1 point more compared to last year's, although the net numbers and the energy margin is one which stems from the different fixing values we use when we set the energy value along with the hedging policies we implement every year.

We gave you a quick answer on these very specific numbers. But then, of course, in the Jens' office, I'm sure you can get all the details. As you know, the size of this phenomenon we're talking about is worth a few million. So with this quick answer, we just gave you the overall number, but then I'm sure that Jens can give you all of the more accurate numbers.

And there was one final question on 2026.

Of course, I had ignored it on purpose. I was so focused on giving you the answers on all the numbers you asked about, so I subconsciously forgot that last question. Well, as you know, we don't give any guidance. But what we're seeing in 2026 compared to 2025 is that we have a further normalization of the contribution linked to the last instance markets, which will be normalized from 2026 onward. We have some contribution stemming from the tariff increase, which was a one-off in 2025, which allowed us to grow in 2025.

Then of course, we're also seeing the evolution in organic growth, which is going in the opposite direction compared to the previous thing I mentioned. So there are a few elements that we're working on for 2026, and we're trying to do a good job on the dynamics we're seeing.

The next question is by Roberto Letizia, Equita SIM.

I'd like to go back to the extra options, and I'd like to focus on the releverage. As Javier was saying earlier, you have a net debt-to-EBITDA ratio equal to 2.6x. But I think the company, given the current market conditions, can stand 3x debt-to-EBITDA ratio, and you can even go above that temporarily, which means that you have, I'd say, EUR 800 million without even going into any extra leverage you can use. And with reasonable multiples, I think that's worth up to 10% of EBITDA potentially. But we're not seeing this in the business plan.

So I just wanted to understand just like to give an idea of how likely it is for you to spend that potential throughout the business plan period. And why are we seeing all that amount? We're only seeing EUR 100 million, EUR 200 million you've already spent whereas the run rate we had in the previous years was a lot higher than that. So you're not spending the debt potential your company has. We're not seeing this option to releverage in the business plan. So how likely is it that we will be seeing this in the business plan period? What may lead to you using that leverage? And if we will not see any M&A, will you actually consider turning to the shareholder with a more generous dividend policy or buyback policy?

And then more specifically, referring to the contingencies you may have included in the business plan, and we talked about the energy prices with a very reasonable scenario. There has been a decrease in STG customers. And regarding STG, why do you have this assumption that you will be losing customers if we consider the trend we saw in 2025, whereas you always said that you were very satisfied with this -- the turnover these customers have in the market, which is better than your initial expectations. And only part of those customers would only move to the liberalized market. And then specifically, how many megawatts in your solar development are destined to third parties?

That's a more technical question. Let me begin with your last question. A question on the megawatts going directly to customers. Well, it's almost entirely for customers. Some 200 of the total 370 megawatts are the ones that we will be financing with our own resources. The remaining part will be development we'll be doing together with customers or we can just simply sell the initiative with a decarbonization approach and we'll consolidate the customer in the future. So that's the summary in terms of size.

And 200 megawatts, most of those 200 megawatts are used to serve those customers who will have long-term contracts for energy. So we already have a number of contracts which are up and running and they go hand-in-hand with the development of our plants. Keep in mind that we are also developing some photovoltaic initiative with certain customers with low soil consumption. So we're trying to basically fine-tune the opportunities we're seeing locally.

Then you had a question on STG. We were forecasting a higher loss of customers. So our forecasts are in line with the expectations that we had mentioned during 2025. And please consider that these are expectations that also consider the next few years. What we're seeing now is that these customers have a churn rate, which is lower compared to the market average. So we are more than satisfied with the investment we've made with the churn rate for the customers compared to the business plan hypothesis.

Then you had a question on how we will use our financial lever. I tried to already answer the question on leverage. When I answered a question Javier made. Let me be a little bit more explicit. We certainly have room to grow even quicker when it comes to the organic part of the investment. And that's certainly one way of using the cash we have available. We didn't include it in the business plan because we wanted to hold on to a certain degree of financial flexibility, but it is an option. If you consider that with this business plan, our level of investment compared to the previous business plan is EUR 350 million higher. And that's something -- that's a lever we can still use.

We included an amount of M&A for the time being, the size of which is almost organic to us. What do I mean by that? It means that we have already completed EUR 20 million of the EUR 100 million we've included in the business plan. And we'll continue to look at the targets to achieve that goal. So we included this number because statistically, it's safe. It's statistically guaranteed. This is a number that is feasible which only depends on our ability to achieve goals. Instead of EUR 100 million, we could have added an extra EUR 100 million M&A. But of course, it really depends on the size of the deals we feel are most interesting.

And please consider that during 2025, we worked very intensely on a number of different files with which didn't have the right quality and price ratio, which -- and therefore, we didn't finalize those transactions, which goes to show that there are plenty of opportunities out there, but we just want to be very careful in choosing the right transactions. We don't want to grow in the short term without extracting value, which is the ultimate goal we have. That's the challenge we face. And of course, we could have included something extra. But these are numbers which obviously also depend on the possibility for them to be successful. And they're also based on the opportunities.

Of course, if you're looking at more sizable transactions, of course, statistically, there's fewer of them. So that's the reason why we didn't include extra opportunities. But of course, we do have room to speed up our investments and our growth opportunities even organically. So that's the approach we have with our business plan. We want to include initiatives which are visible and which are technically achievable in terms of our ability to execute them.

So our investments are visible. The development of markets has to be visible and feasible. It's all part of the challenges we face from the industrial standpoint. And we have to be able to conclude them. But currently, adding an extra EUR 1 billion for M&A doesn't only depend on our capacities. It also depends on the targets. Whereas the number we've included, which is EUR 100 million is a number that we think is feasible also based on our track record as you, yourself, Emanuele were saying.

The next question is by Francesco Sala, Banca Akros.

I have a first question on the retail market. Are there any significant differences between gas and electricity customers? And in the former, is the competitive pressure more limited? The second question is the 2% inflation, the inflation that also needs to be applied to the RAB throughout the business plan period? And then the third question is on the slight increase in the tax rate. What time line does this have? Shifting to the 0.4% origin. And my fourth question is, are there any short to medium-term efficiency targets linked to the use of AI for the retail business?

As far as the competitive pressure we're seeing on the markets for gas and electricity customers, you should consider that currently, our commercial structures operate with a dual fuel approach. So it's the same pressure basically. We switched our portfolio from a mostly gas mix to mostly electricity mix with the idea of capturing the value linked to the consumption of end customers. On the one hand, gas customers due to global warming will decrease their consumption in the medium to long term although you can't really appreciate these changes from 1 year to the next, although in the long term, we did switch our portfolio and the STG tender allowed us to basically revert our customer mix.

So from this point of view, we're seeing a slight increase in consumption and electricity customers compared to a long-term decrease in gas consumption. That's why we reverted the mix.

And then you had a question on the impact of the tax rate, which is slightly up compared to what we had considered in the previous business plan, given the fact that some tax subsidies expired, but it's also due to the effect of the IRAP tax in certain regions. Then we have a question on the overall inflation rate. I can't remember exactly what our forecast for the evolution of the RAB is. Well, Jens can send you -- Jens and Luca can send you the answer after the conference call. I think it's similar, but the indicator level used in the evolution of the RAB changes from the water sector to the gas sector.

So the updated approach is different depending on whether or not the year is even or odd. There's some technical issues. And therefore, in the various businesses, the figures are never the same. Now I can't remember what the decimals were, but I think it's safe to say that it's roughly 2% for the business plan period. So that's the reference we used generally speaking.

As far as the impact of AI is concerned on the market, what we are testing leads to a visible reduction in costs for those initiatives in which we implemented technology. Think of CRM. We've been able to increase our contact volume to a million per month. A good part of these contacts refers to online services which lead to being sent in the written form with non-real-time tools. And we've created some automated tools that can support us in answering our customers' questions. I would rather not give you any numbers or the size and I'd rather not share numbers regarding market initiatives, of course, things that we've already activated in the past and which have given us some obvious benefits in terms of results and efficiency. And we have a number of initiatives in the portfolio for the future.

But based on our experience, I think what we've been doing so far is quite positive. And therefore, that's a path we will continue to head in. And then when it comes to networks, we have implemented some initiatives that have been giving us some good results, something that neither I nor Orazio have mentioned is the fact that we have some new regulations on gas leakages from our networks. And over the past few years, we started using AI tools to support our physical activities, both in our investment plans and in our operational costs to look for leakages on the local territories. And we use machine learning to use past events, mixing them with the age of the networks and the concentration of the various distribution points.

So we were able to overlap these numbers, allowing us to reduce costs and to cut the amount of gas leakages by almost 50%, allowing us to obtain premiums, major premiums in the sector. And in the future, we'll continue to use these tools even more. And we'll be allocating our investments based on the statistical probability of damage on the networks so that we can work on predictive maintenance but also on the district organization of our networks.

And by using the data relating to increasingly small pieces of the network, we can also study consumption trends and by analyzing these trends with machine learning, say, to analyze how much water is used in a specific territory, we can then identify leakages which are hidden, which aren't visible on the surface. And this is allowing us to drastically reduce the leakages on the network, which leads to premiums, of course, which increases the system's resilience. And as far as predictive investments are concerned, it allows us to reduce OpEx regarding maintenance, which, of course, have an impact on our balance sheet.

The next question is by Davide Candela, Banca Intesa Sanpaolo.

I have 2 questions. One is on M&A.

I think there's an echo because your microphone is on.

So I have a question on M&A. It's more on the concept rather than the impact. This year, you have implicit figures relating to multiples by 7x. Last year, the implicit EBITDA multiple was equal to 6x. So why is it? Is it due to the different mix in your assumptions? Or is it linked to the targets you see on the market? Do they require higher multiples? Or maybe was it the fact that last year's multiples were slightly lower? Just to have an idea of the rationale.

And then a second question on the topic of capital allocation. You said that especially in water and waste, there would be the opportunity to grow more. There are some topics regarding visibility. Do you have any constraints in terms of waste or tariffs, which don't allow you to do more despite the fact that you do have room to grow and also linked to capital allocation for your dividend policy. In the final part of the business plan period, there's a higher growth compared to the beginning of the business plan period. The feeling is that you want to remunerate your shareholders more because you have more flexibility. Is that the reason? Or is it because you want to give a more balanced outlook regarding the evolution of the dividend?

Well, first of all, let me congratulate all of you because in 2 hours, you went to such details regarding the numbers. Now let me begin with your question on the concept of value. It's probably the same value. It's probably the same multiple. But maybe as we were rounding up or rounding down, we added or subtracted some EUR 10 million, and that changed the multiple. Although I think it was actually visible on one of the slides. No, it isn't, but it's the same value pretty much. Maybe we included the investments in M&A. But then post acquisition, we then invested on the acquired company. But in that case, they become organic development investments. But again, it's the same indicator theoretically compared to last year's. And maybe the only changes are due to figures which have been either rounded up or rounded down.

So that's just a benchmark, of course. But then clearly, depending on the various mixes we're seeing in the sector, the numbers can change slightly given the effect of the mix, but it's basically in line with what we saw in the past.

Moving on to your question on capital allocation. Well, for waste, we included everything which is in an advanced authorization phase or which has been fully authorized, which means that we are confident that, that can be added to the business plan. What we didn't include is all of the initiatives, which for the time being, still aren't 100% sure they will be authorized, which is a condition we require.

In the network sector, we are investing very much. There is room for further investment. For the time being, the increase is limited, and this doesn't have an impact on the tariff constraints. It doesn't generate investments in working capital, doesn't have an impact on future tariffs. So we didn't do this. There could be potential room to do that. So this is linked to a 40% increase in investments compared to the previous 5-year period. So basically, we're increasing things. And also consider that we have EUR 500 million in investments we make, which are entirely financed by funds that we don't have to reimburse. The largest portion of that is linked to the national recovery and Resilience plan. But we also have other types of funds as well.

Now what is the advantage of these investments? Well, for the group, that means that in regulated sectors, we can optimize costs which can be reduced through the effects of these investments. Take into account that these -- some of these investments are aimed at reducing leakages in parts of the networks, and that will lead to benefits in terms of operational improvements. These investments also finance market activities. For example, rigid plastics and carbon fiber, part of those investments are covered by funds, which allows us to reduce our invested capital, but it also allows us to optimize the plant's yield.

For example, in hydrogen, we are developing the sector. We are creating expertise and our invested capital is next to 0, which means that we are benefiting by an almost full coverage when it comes to investment. So that's why we have a potential EUR 500 million of works that are included in the business plan, which don't absorb any cash, which gives us further room to do so in the next business plans, and we'll be also focusing on further increase of the RAB allocation. So that was the answer for the capital allocation question.

Then you had a question on our dividend policy. Well, our reasoning was linked to 2 things. On the one hand, we're confident regarding 2025 figures. despite the fact that they were a challenge given the major amount of temporary opportunities, but also we had a positive leverage. We had a positive debt-to-EBITDA ratio. And then we also considered the fact that our targets are marked by better performance of the business plan period. And therefore, we have an exclusively structural growth scenario. And therefore, we decided to increase dividends even more in the final part of the business plan period, also taking into account our financial flexibility and the fact that we will already have digested all the things we'll be doing in the next couple of years, the reduction in temporary opportunities, the fact that the STG scenario will be stabilized. And therefore, we will have some things which will go on top of the structural growth. And therefore, thanks to all that, we will be increasing the dividends in the same way.

All of these things combined allow us to be very confident regarding the targets we'll be achieving. And that's why we increased our dividend policy. And as you know, this is a commitment regarding the cents per share. And over the past years, whenever our results improved, we always increased our dividend. And I was looking at the past 3-year period, we had a growth in dividends, which was well above 25% compared to the past with an outlook featuring a further 27% increase over the next 4, 5-year business plan period.

So we are working to make sure that our profits grow 3 years ago, when we presented the first business plan that Orazio and myself had drafted, we're very focused on creating value, profitability and bringing the effects of the development on the top line all the way down to the bottom line. And the track record we've achieved so far, I think, speaks for itself. And the projection for the future is headed in the same direction.

Mr. Fabbri, there are no further questions.

Well, I think you asked everything you could possibly ask with plenty of details. But seriously, if you need any further feedback, please get in touch with Jens' office and with Luca Cimatti. And of course, we are always available for any extra questions. Thank you very much for making yourselves available. Thank you for this 2-hour discussion on our business plan. And we will be going on our roadshow soon to meet with investors.

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

Good afternoon, everybody. We just completed our Board meeting, which approved our quarter results, and I'm here with the Executive Chairman, Cristian Fabbri; our CEO, Orazio Iacono; and our CFO, Massimo Vai. Let me hand it over to the Chairman.

Good afternoon, everybody. And indeed, we approved the results of the first 9 months during our Board meeting with positive results with a EUR 295 million net profit over the period, up 4% compared to 2024. But keep in mind that 2024 had a growth up 20% compared to 2023, which means we're continuing to grow in terms of profit.

In 2023 or in 2024, rather, profit was up compared to 2023. Also thanks to our temporary opportunities, temporary opportunities which are reducing. But despite that, we continue to grow. This is the 11th quarter in a row in which our profit has grown compared to the previous period. So we're doing quite well in terms of our numbers. We're also doing quite well financially speaking, despite the fact that we have been significantly increasing our investments, especially from the operational standpoint, approximately up 20% compared to the previous year.

The net debt compared to EBITDA is down. We're down from 2.7x to 2.6x for the period. So things are going quite well even from this point of view. And these are the first 2 elements, which show that we are continuing in our path marked by solid growth and solid performances leading to value creation.

Now moving on to the elements in our P&L. Just to have a quick overview to guarantee transparency. Our EBITDA is pretty much in line with last year. We will be seeing that in a few slides. And let's see how we -- from EBITDA, we move to profits. Now provisions have increased because we are investing already in 2024, we had an increase in investments. And even in 2025, in fact, we are seeing an increase in investments with an overall increase in investments worth some EUR 17 million, which are offset by the normalization of provisions.

We're reducing the last instance markets and provisions are becoming more normalized. And this contribution almost entirely offsets the growth of amortization, which means that we have an EBIT, which is substantially in line with last year's, just EUR 3 million lower, which are then recovered through the reduction of financial burdens.

As you can see on the right-hand side of the slide, you'll see how on a quarter-by-quarter basis, we have reduced financial expenses. In the first quarter, we had a sizable reduction, which would not have had a repetition in the following quarters and that we would have had a reduction, as you can see. So we are completing the first 9 months with EUR 63 million in terms of financial expenses with a EUR 26 million positive number compared to last year.

Taxes are going up also because of the financial situation was slightly better compared to the previous period with a net profit, which is equal to EUR 295 million, as we saw earlier. Now let's see what the industrial levers are leading to these figures. All of our 3 main areas of business have been growing structurally. As you can see, all in all, we had an EUR 84 million growth, plus 9%. You may remember that in the business plan, we were targeting a structural average growth of roughly 7%, which means we're doing slightly better compared to what we had expected over the period compared to the planned average.

Energy is at plus 23%, waste is at plus 23%. networks are plus 38%. And this EUR 84 million growth allows us to almost entirely offset the expiry of the temporary opportunities worth EUR 85 million. And then we'll be seeing where those are included in the various business areas. which means that we are transforming an EBITDA, which had grown substantially with some temporary opportunities that we had exploited. And we're turning that into a structural EBITDA growth, which is in line with the goals we had set in all areas of business.

All of this leads us to more investments to a constant EBITDA, and we are also improving profitability, which goes to show that the investments we're making to support growth our investments bringing value, so much so that as far as ROI, we are at 9.9%, which is more compared to previous years with a constant growth rate, as you can see from the chart. And as far as ROE is concerned, we are stably above 11%, which goes to show that we are growing and improving the profitability of our invested capital.

Moving on to the business-by-business breakdown. As usual, we'll try to keep things short to make sure that we can then focus on our industrial performance, leaving you time for some Q&A on any matters you'd like to raise. Beginning with energy, we are continuing in our growth. structurally speaking, we have EUR 23 million in terms of growth in our traditional markets, EUR 23 million, which also include the negative effect of the STG for the first 6 months of this year.

You may remember that STG began on the 1st of July 2024, which means that in the first 6 months, -- and this year, we had negative numbers compared to 2024, which we offset through organic growth. Plus the temporary opportunities were reduced. last instance markets for the most part and the tail of the Super Eco bonus were down EUR 65 million compared to 2024, which means that we have a structural growth that will continue in the sector despite the major competition, and we stand at 8%.

Let me give the floor to our CEO now for an explanation regarding the Waste and Networks businesses.

Thank you, Cristian. In the Waste business, we are continuing with our growth story. [indiscernible] waste is an exciting story. That's something we like to underline. This 9% structural growth has even more value in a complex macroeconomic scenario that we're all familiar with, which goes to show how resilient our waste sector is. We are conquering market shares.

We have a broad and diversified customer portfolio linked in different ways to the economic cycle. We also have a positive contribution from all of our various businesses in the waste sector, as you can see from the slide, from urban collection, the waste treatment to soil remediation, which have more than offset the reduction in extraordinary energy profit, which you can see on the graph and which we obtained in the past during the energy crisis, which has now, for the most part, become normalized.

And this allowed us to create a certain treasure, allowing us to be flexible to fee growth through organic investments and external investments combined. Let me just give you a quick comment regarding each individual business. Treatment is up EUR 10 million. We have our waste-to-energy plants, which have performed well, better than last year. We also have the contribution from the Delta perimeter from Ambiente Energia, Circular Yard and TRS, which is a platform we had described last time.

We also have good performances in the other more traditional companies -- but we also have to mention the global waste services. This is an asset we have, which allows us to increase our customer loyalty. We also have the recycling business, which is also growing compared to June. We have, in fact, doubled volumes compared to June. In this specific sector, we are the leaders with a market positioning in the raw materials segment, which is top of the rank.

We had intercepted this growth trend for quite some time. We had also mentioned what we were doing during the business plan presentation. And in fact, we are investing. We're doubling our plant offer so we can intercept more demand in the business. Let me conclude the overview of the waste sector by talking about soil remediation. Even here, we are market leaders, thanks to the legendary ACR company, which is continuing to do very positively with contracts with very large companies also in the oil and gas sector.

Theirs is a wonderful story, which in 2 years has allowed us to double margins. Things are going well. All of these drivers refer to structural growth, solid growth and our leadership is becoming increasingly consolidated on the specific market, which, as you know, is highly fragmented. Moving on to networks. This is a business which, as you know, is regulated by a reliable authority.

It is protected from rates, interest rates, fluctuation and demand, as Cristian was saying earlier, we're continuing to grow structurally by 10%. This is a growth which, for the most part, refers to the water and gas businesses. If we look to the sector breakdown in water, we have a growth linked to investments on research and development. We also have to take into account inflation, of course.

As we had mentioned the last time, in this quarter, we received premiums for all of our territories, which means that from this point of view, we have received premiums in all the territories we operate in. As far as gas is concerned, even here, our growth is in line with the previous quarter. It is in line with the first 6 months.

And besides the contribution from the RAB, we also have deliberation 87 on operating cost coverage, allowing us to then update the tariffs for the '26 and '27 period, making it more in line with our corporate costs with an X factor, which is more limited compared to the previous one, which means we will have higher revenues and higher margins even with the same costs as a way of looking to the beneficial effects of the ROS once we get them in 2028.

In electricity, we also have a contribution linked to RAB and also linked to the inflation, which refers to deliberation 130. We are in line with the other quarters, and we are in progress as far as the tariff is concerned. We're waiting for the final regulatory framework, which we will be receiving shortly.

Let me conclude by saying that with these results, along with the normalization of energy commodities, our portfolio is rebalancing between regulated and market businesses. In other words, it is a portfolio which guarantees an optimal risk profile, allowing us to continue working on a resilient growth, which, as Cristian was saying, is also fed by the investments we're making and with a dominating position in the liberalized markets, thanks to the leadership we have both in energy and in waste.

And let me hand it over to Massimo, who will be giving us an overview even regarding the increase in investments, which allow us to make our networks more efficient and more resilient. and also allowing us to invest on the waste business so that we can deal with the increase in demand. Thank you.

Good afternoon, everybody. And as usual, let me just guide you through the chart, which summarizes the cash flow that our company has worked on over the past 9 months. There are no surprises compared to our expectations. The numbers are very much in line with our projections.

And let me just comment on the various items, beginning with the overall cash flow, which as of September 30, was equal to EUR 903 million, as you can see on the left-hand part of the graph, which adds EUR 230 million to the number we had shared with you for the first 6 months. If we compare the same period last year, we generated approximately EUR 130 million more compared to the third quarter last year. This cash was absorbed with EUR 131 million by the net working capital.

You may remember that in June, the working capital was worth EUR 40 million. In this case, we have the main component, which refers to the almost full completion of our summer gas procurement, allowing us to deal with all of our needs during the thermal season, so we can manage the gas prices in the optimal way in the thermal season, which is beginning over these few weeks.

Over the same period last year, the working capital absorbed twice as much, which goes to show how we're managing the net working capital well. And if we look at the seasonality of the businesses in our company, -- this has a lower impact compared to last year. Then we have provisions, which absorbed EUR 37 million compared to EUR 28 million in June, which brings us, as the CEO was mentioning to the use of cash for investments, which, as usual, we divide into 2 components.

We have the maintenance CapEx on the one hand and the development CapEx on the other. All in all, these 2 numbers reached a total amount of EUR 659 million to EUR 660 million, up by EUR 80 million compared to the figure we saw last year. So even in this case, this goes back to what the Executive Chairman was saying earlier, where he said that we are in line with the indications of our business plan, which we shared with the market in January this year.

Then in the second part of the graph, you will see that we have the part relating to the dividends, which we paid in June, which brings us to a debt change worth EUR 184 million, bringing our net financial debt position on the right-hand side, up to EUR 4.147 billion, so that the debt-to-EBITDA ratio is equal to 2.6x, which is slightly up compared to the values in June.

But you may remember that we had mentioned that, that figure in June was extremely favorable. also given the payments which were made after the end of June, along with the excellent performance in the first part of the year so that we have reached the end of June in an especially positive way. I had also mentioned during the various quarterly conference calls that our debt reference was equal to EUR 4.1 billion, give or take, EUR 100 million.

So we are very much in line with our expectations. And we are well below our debt-to-EBITDA threshold, which is equal to 3x, which is proof of the fact that we want to hold on to a certain degree of flexibility so we can look at any interesting opportunity, industrially speaking, but also as a way of dealing with the market anomalies, which, as you know, led to some changes in parameters in recent years, which means that we are in a range of comfort.

At the same time, as you saw from the financial figures, we're also looking to increasingly optimize the ratio between our flexibility, our cash and the cost is generate to the benefit of the bottom line. If we move to the following slide, you'll see that on the left-hand side, our average cost of debt is in line with the levels we had in June.

We stand at 2.75% and as far as our type of debt between fixed and variable, the vast majority of our debt is fixed, equal to 94% and only 6% of our debt is variable. Even here, we have a very low volatility linked to the market interest trends. We have a very long-term visibility. As you know, each year, we tend to renew or reimburse the expiring bonds and we emit a new one, which means that typically, we renew 10% of our medium- to long-term debt.

And even this part of the implications of cost only has an impact worth 10% whenever we renew the fixed part of the bonds we replace in future years. And then finally, a comment which was a lot more emphatic in June where we had a change in outlook as far as Moody's is concerned. We are confirming our stability on the 2 ratings for Standard & Poor's and Moody's with a good visibility even regarding the expectations we have for the next few years. I'll leave it at that for the time being.

Let me give the floor to our Executive Chairman for some conclusions. Thank you.

Well, thank you, Massimo. And we gave you a quick overview of the situation covering the main items. Let me conclude with 2 or 3 final remarks before we take some questions. Let me just underline some of the things we've already mentioned. The first point I'd like to raise is that we are working on the structural growth of our EBITDA, which stands at 9%.

Now our challenge is that of replacing temporary opportunities in an effective way with a structural growth that can consolidate the various business drivers. And we're doing even better than what we were expecting. We have been outperforming compared to what we had in mind. As far as the profit is concerned, in the business plan, we had mentioned that we wanted to continue growing on the bottom line, and we are proving this with the results of this last quarter.

But in fact, we've been proving this for the last 11 quarters in a row. The net debt-to-EBITDA ratio is very low, which is in line with the goals we had given ourselves in the business plan and with the possibility of doing even more based on the opportunities we'll be considering on the market in the next few months.

Let me give you the floor for any questions you may have and for any specific comments you'd like to make. Thank you.

And our first question is by Javier Suarez, Mediobanca.

I have a few questions for you on the businesses and on the company structure. As far as the businesses are concerned, I have a question on the supply activity in the energy business and on the waste business. On the supply business, the market in Italy seems to be becoming increasingly competitive. We're seeing this from quite a few indicators.

Does Hera feel the need to adjust its commercial policy to deal with the market, which will be increasingly competitive, more so than what the market players had expected. So that was the question on your supply activity. Moving on to waste. You were referring to a 9% structural growth. And I'd like to hear a comment regarding the dynamics you're seeing. Can you break up this plus 9%? Can you give us a breakdown between volumes and prices?

Because I have the feeling that there is an underlying trend of structural growth in the prices for these activities. I'd like to hear you confirm that. I'd also like to hear your comment on the most recent regulatory decision by Hera on the urban waste treatment business. They cut returns by 40 to 50 bps. What impact can this have on you? And then moving on to a more philosophical or structural question.

You are one of the companies in Europe with the lowest lever and the lowest payout. So my philosophical question is, moving forward, how do you expect to proceed with a capital structure headed more towards 3x. But can you do this with targeted M&A? Some of you mentioned the industrial activities or the industrial opportunities to go back to 3x? Or will this happen only through organic CapEx?

Or do you expect to increase the dividend progressively? How do you -- what is your philosophical approach to the balance sheet regarding the leverage and the payout, which is relatively low?

Thank you, Javier, and good afternoon to you. Let me begin with the question on energy supply. Objectively speaking, the market is more competitive, which is nothing new. There is a lot of pressure from the traditional players plus all of the new operators. So we're in a context in which competition has been increasing at the same speed for the past 4, 5 years. So that is the context we work in.

We constantly change our commercial policy. What I mean by that is that both as far as our offers are concerned and as far as our commercial position is concerned, we always try to be updated. We try to adjust things based on the market opportunities and based on the specific momentary situations, and that is also linked to prices in Energy and to customer sensitivity.

So this is a constantly evolving activity. As far as competition is concerned, we have always underlined our multi-business approach and our ability to satisfy our customers even in the post-sales activities. And through this, we've always had a lower churn rate compared to the market. And that's what we want to continue doing.

So this is an activity that we are working on and which we are constantly updating. And so far, the results we've obtained have been very positive all in all, also seeing the growth we've had over the first 9 months of the year. So that was an answer regarding your question on Energy supply. As far as Waste is concerned, let me hand it over to Orazio before I take your last question regarding the future since we're also working on our business plan.

Thank you, Cristian. And as far as the Waste business is concerned. Besides the delta perimeter I was referring to, which gives a small contribution, when it comes to growth, our prices have been slightly better compared to 2024 due to the reasons we're all aware of because the market in Italy is short and because the price to export Waste to platforms abroad are increasing.

We have an increase in logistics prices and costs linked to CO2. So price is an issue. Other than that, we offer more services compared to other competitors, we offer global Waste management services, which are increasing. And thanks to the broad and diversified portfolio we have, we're able to increase services. And we're also doing better on volumes, specifically when it comes to industrial waste, the special Waste, not the urban Waste. As you've probably seen, those volumes are growing compared to the first 9 months in 2024. They've grown slightly, but they have grown.

So these are the 3 points that allow us to increase our margins compared to 2024. As far as the issue relating to the recent deliberations on urban waste, our plants are based on a regional method, which means that they are not impacted by this deliberation. And therefore, as far as our plants are concerned, there is no impact.

As far as collection is concerned, and therefore, as far as services are concerned, our growth on sort of collection and therefore, on the quality of service, whenever we will have the possibility to tap into some premiums, that will certainly only be an opportunity for Hera Group.

So there are no criticalities we see, but only positive things. We are multi-business even within the Waste business. So we use all possible levers.

Moving on to your final question, which I think relates more to the business plan than to the quarterly presentations. So without going too much into the things we'll be sharing during the business plan presentation. So your question is, with all of the levers you have, with all the financial flexibility you have, do you know what needs to be done? Or do you want to give that money back to your shareholders by increasing your dividend?

Well, actually, from the industrial standpoint, we have major investment opportunities. We're working on our business plan update. And in all businesses, there are more investment opportunities compared to what we actually allocate in the business plan, which makes things very easy for us. And therefore, organic growth is something that we can achieve. We don't need to do anything strange because our businesses are moving along quite well. They need investment in water and electricity distribution and waste.

If you consider the first 9 months of the year, most of the investment was made on water and on waste in which we continue to work on our plants to renovate them and expand them, but also by growing on our perimeter. Think of the investments we're making on rigid plastics and on fiber, which you're already familiar with.

So we're looking to expand our presence and to increase our capacity. When it comes to the water networks, we have good growth opportunities, given the good quality of our service, as can be seen by the premiums we obtained, but also with all of the resilience challenges that we can take advantage of.

And also in the other business areas, there is plenty of demand. Think of the energy sector, think of energy efficiency, where increasingly, even in the public administration sector, there is a lot of interest in projects with upfront investments by ESCO with payments made in installments at a later stage by the customer with a good remuneration as far as the invested capital is concerned. So we have plenty of organic growth opportunities.

On the other hand, as you know, there's also a lot of excitement when it comes to M&A. We have plenty of files. We tend to be selective. Because we want to work on initiatives that are consistent with our business plan. We want to focus on companies that can fit well with our platform or those that can allow us to expand our perimeter, expanding our presence in neighboring territories as we develop our business areas.

So that's the first element we focus on. The second element that I'd like to mention is that there are some possible targets that we're looking at. And of course, prices have to be consistent with real value creation. We have no anxiety, we don't have the need to add pieces to the puzzle without creating value for the company. We're looking at creating synergies, and we're looking at investments, payments and value creation, which needs to be consistent with an adequate industrial growth.

As far as dividends are concerned, every year, when we update our business plan, we review our dividend policy, which is what we'll be doing this year as well to see whether or not we have to amend things also given the market situation. And of course, we're comforted by the results that we're seeing. I focus more on quality because your question was a more qualitative one. And then, of course, in the business plan, when we will share the business plan update with you, we can go into the details of the various choices we've made.

The next question is by Emanuele Oggioni, Kepler Cheuvreux.

I also have a few questions for you. The first is on AIMAG. Can you give us an update? We know what happened. We are aware of the problems. So what is the scenario you expect for 2026? Will you renew your talks with them? Will you try to find a political/bureaucratic solutions? What can we expect from AIMAG? Can you tell us something more about that?

Then I have a second question on the energy supply business and on the 800,000 customers that have stayed on with you following the tenders last year. Give us an update on that, also given the market dynamics you mentioned with an increase in the churn rate in recent years, not just over the last year on the market in general, how are things changing? And what is your approach to that sector since you mentioned that you are constantly updating and changing your commercial policies?

And then I have a third question on the waste business. In September, a 30% reduction in food waste per capita regulation was approved for food retailers and restaurants. And there was also talk of extending those same numbers to the textile industry and for footwear. Is it a little bit too soon to talk about that? Or are you looking at a potential positive impact in terms of growth in the waste market and possible investments you may be making?

AIMAG, well, where do we stand for the time being? Well, as you yourself were mentioning, the framework agreement we had signed cannot move forward. What we're left with is that the public shareholders of the company, first of all, and we ourselves are trying to find a strategic solution for the company's future. We want to find a solution for the company.

And the company, first of all, public shareholders will have to find a solution. We'll have to find an approach. That's all I can say for the time being, as far as AIMAG is concerned, you may remember that we have a 25% stake in the company. We've had it for quite some time. And the company is looking at what can possibly be done looking forward. We have been working on a project, and we'll see what happens moving forward.

On energy supply and more specifically on STG, as I mentioned in the previous conference calls, we're very happy with that customer segment, which has a very low churn rate. So things are going well from that point of view. And just to give you an idea, since you always ask us to give you some figures on the topic. All in all, compared to a year ago, we have lost 120,000 to 130,000 customers of that overall segment.

So things went very well compared to the sector's churn rate. Our numbers are much lower. And that is valuable to us because they are loyal customers with an interesting price, although I'm not sure that is what actually keeps them loyal. Although they are proving to be loyal to an operator that they're creating a good relationship with because we're offering a good service. We're very positive towards them with plenty of initiatives. And therefore, things are looking good to us. We have a different commercial offering, also taking into account the cost of energy and the uncertainties regarding the future.

As I already mentioned, we are working on the Hera hybrid offer, which allows our end customers to choose the percentage of volumes they can block a price on and the other percentage that they can keep a variable price on. for a total amount of 100, allowing every customer to invest with the appropriate risk profile, matching their needs and their energy trend forecasts. Then we have the VAS part of things that too is a customer segment that we're working well on.

So we're still very satisfied with the investment we made 15 months have passed now, and we're getting close to the halfway mark of the period during which the regulated tariffs for this specific market have to be maintained. Orazio, do you want to talk about waste?

Yes. As far as the waste business is concerned, for food plastics, if I understood correctly, Emanuele?

My question was on the 30% reduction in food waste per capita from restaurant food retailers and services from that sector.

Well, we're studying the matter, and we will certainly be able to take advantage of these opportunities. Why I'm saying that is because when it comes to the food sector, we are already present in that market. And there are a number of opportunities that we will be discussing with you when we have some clearer figures.

Earlier, when I mentioned plastics, as you know, we are very much interested in virgin or recycled plastic from other countries on the European market. As you saw, we're performing very well. We have doubled our volumes compared to June, thanks to our positioning on the high-end secondary raw materials, especially on the food packaging sector. Because as you know, when it comes to the legislation regarding plastics, which are used for the food sector, we are positioned very well with PET, both in film and in chips. It is one of our strengths.

As you know, we're integrated on the entire value chain and we are also positioned with a multi-polymer approach, which means that by using various types of polymers, we are very resilient compared to the sector's economic cycles.

The next question is by Roberto Letizia, Equita SIM.

I'd like to ask for a few more details on the topic of M&A. As far as your company is concerned, M&A has always been very important. So let me begin with a more generic question. First of all, can you explain the overall dimension M&A market for Hera. What I mean by that is what is the size of the market you would tap into? Of course, not everything is then finalized. It depends on opportunities or when it comes to AIMAG, you also have some technical issues you have to take into account. But what is the realistic potential that Hera can look to? Is it your neighboring markets, the sectors you're involved in? Just to have a more long-term idea. What is the traceable market you referred to for M&A? How broad is your potential on the current market? And also as far as M&A is concerned, and I was able to read between the lines during your previous comment on M&A. But when it comes to minority stakes for Hera, can you give us some further element on timing? If this happen, what is the time line you have in mind?

And then another comment on STG. Besides mentioning how many customers switched, can you also tell us how many customers have moved on to liberalized market, so we could just complete the picture. And then I'd like to also interpret your body language on a possible buyback because, of course, M&A can drag the buyback along with it.

In other words, I may have some midterm opportunities and I can try to remunerate shareholders temporarily with a buyback so that I can then use the shares when M&A becomes more plausible or feasible.

Well, you prepared some very easy questions today, didn't you? All right then. Let me try to answer your first question. You were asking us about the potential M&A market as a way of understanding whether or not the size of that market is a constraint when it comes to growth. For the time being, I don't think it is a constraint when it comes to growth. If we add up the targets we've looked into, even only during the first 9 months, the overall size we see refers to the multiples of an M&A target.

And therefore, the M&A market is a topic we're looking at. And since we are a multi-business company, we look at all opportunities, which allow us to grow according to the rules that we've mentioned time and time again in the various business areas we work in. So from that point of view, the topic of the market size isn't a criticality.

As you know, we've allocated about EUR 100 million in terms of EBITDA size for an equal impact on P&L worth EUR 700 million in the business plan. But with this lever, we feel that this number may even double as long as we have the right things that we can be interested in. So from that point of view, there are no specific constraints when it comes to opportunities.

Moving on to your question on minorities. You may have seen that over the past 9 months, we have worked to create value. We did buy back some of the minorities, which were outstanding. We also had some put options that we could have used or some call options that we could have used, some of which we moved forward. We bought back all the minorities that we were talking about. When it comes to Hera Ambiente, it's work in progress, and we will be describing the end game of the process once we complete it. But we're looking over things carefully. As far as STG is concerned, let's just take things one step at a time. I mentioned what we did so far.

And later on, I'll complete the picture. We're working very well. And I don't want to go into the more sensitive dynamics when it comes to what we're doing to transform things on the liberalized market. As far as how we intend to finance M&A even temporarily. As I mentioned, we have the cash to do that, but there may be other things to consider other actions that we may want to take into account when the time is right. And that is the overall picture. I understand that I didn't give you an extremely specific answer, but I'm sure you're expecting this kind of answer based on the questions you asked.

Our next question is by Davide Candela, Intesa Sanpaolo.

I have a couple of questions for you. The first is on energy supply and M&A. In the business plan, you have a target in 2028 equal to 4.5 million customers, which included a major churn on the STG portfolio along with an M&A from net acquisitions, which would allow you to achieve that target. For the time being, your STG portfolio is performing slightly better, given the 100,000 customer reduction, whereas when it comes to M&A, based on what you were saying regarding market competition and looking at the multiples of other deals, it may be a little bit more difficult.

So I'm trying to understand, is your target achievable with a different mix? Or are the M&A conditions only temporary? And will there be an extra contribution? Then I have a second question on your debt and on your debt structure, fixed rate and variable rate. The market trend seems to be looking towards a shift towards the variable rate. Are you also in line with that approach? Or are you comfortable with your current structure?

You remember the business plan part relating to energy supply. But 9 months have passed since the presentation, and I think it's difficult to change our approach for the time being. The part linked to our commercial activities is moving forward in line with the expected activities. But even considering the number of customers and those dynamics, you also had to take into account the concept market, the last instance market.

So there are some dynamics which continue to exist. Just to give you an idea of the size, AIMAG has 200,000 customers. That's their overall size, just to give you an idea. And over the period, we also considered some customer portfolios, which we weren't entirely convinced with and we didn't move forward.

So for us, both of these levers are feasible, and we just have to look at the right opportunities. The commercial side of things is something that we will continue to go forward and it may end up giving us the best possible result. And if we can look to the acquisition of interesting companies or interesting businesses in some companies, well, we'll look into that. So we're looking at both things. So between the end of the old business plan to 2028 and the beginning of the new business plan to 2029, we still have a few years that we can work on.

And as far as the debt structure, do you have anything to add to that?

Well, very briefly, when it comes to the debt structure, we have no intention of amending our references. We want to continue focusing very much on fixed rate debt. Also because we have a good percentage of invested capital in the regulated sector, that choice is a hedging choice compared to tariffs.

As you know, the WACC defined within tariffs is updated for 13% to 14% every year with the new cost of money parameters. So having fixed rate bonds with a dimension which is consistent with that figure allows us to be connected to the overall revenues trend. And that is part of the decisions that we chose.

We have a follow-up question by Emanuele Oggioni, Kepler Cheuvreux.

Yes, I have 2 other questions that I had taken note of. One is on the September tenders for the last resort and default service. In the gas default service, you won all 9 tenders. Whereas for the gas services, which is riskier, I'm not sure how you performed. In the business plan, you were saying that these temporary opportunities had been removed above and beyond the profitability, which is lower compared to the past. So the profitability of the new tenders is lower. But I still wanted to understand how incremental they are compared to the business plan. And how much of that is already included in the business plan?

And then the second question refers to the gas distribution tenders for the mandatory disposals for Italgas and 2i Rete Gas. And you obviously didn't consider them to be especially interesting. Why is that? Was it a matter of price? Or was it based on other more industrial aspects?

Well, let me begin with the gasless incident market tenders. Yes, on the FUI market, the price level wasn't interesting for us. We didn't make a bid. And therefore, we weren't awarded the tender. As far as the default market is concerned, the offer we made, we thought was interesting. But the EBITDA contribution isn't very relevant. It isn't very important. It is very much part of the ordinary things that we look into. In the business plan, we hadn't expected anything.

So it's a little bit on top of what we were expecting, zero extra. On the topic of gas distribution and the Italgas sales. There were a number of small pieces of the network spread out over Italy. We studied things. We even made a bid in the tender just to see what the size of the networks was and what their economics were.

We focused on price, which obviously wasn't adequate compared to the choices which were made. But those areas weren't neighboring or they weren't embedded compared to our current network. So even from that point of view, our interest is lower. Also given the fact that they were smaller and more spread out and they were difficult to optimize. Thank you.

Mr. Fabbri, there are no further questions.

Very well then. We did very well on time. We began an hour ago. Have a wonderful afternoon and all the very...