Italgas Aktie

Good morning, and welcome to Italgas' Strategic Plan Presentation 2026-2032. This is going to be quite a long presentation. We are going to have our President, Paolo Ciocca; our CEO, Paolo Gallo; our Head of Italgas Rete and Distribution Business, Pier Lorenzo Dell'Orco; and our CFO, Pierre La Tour, presenting the plan to you all today. We are very, very pleased to have such a big audience, and it's a very important day for all of us. So welcome, and thank you.

[Presentation]

Italgas, built on networks driven by intelligence. Is it a program? No, Well, it's a reality. So good morning, ladies and gentlemen, and welcome to the presentation of Italgas 2026-2032 strategic plan. A warm welcome to all of you, analysts, investors and journalists who are here today, joined by the many Italgas colleagues who have traveled from different parts of Italy and Greece. This presentation bears witness of the cohesion of a group already geared towards the full delivery of the actions that we will present here today. We meet again only 7 months after our last strategic update.

This close interval is only incidental and in view to recover the ordinary rhythm of our updates altered by the 2i Rete Gas acquisition. This short time will allow us to share with you the pace at which the group is advancing. What we are presenting today is continuity and acceleration, continuity and acceleration, continuity in vision, acceleration in targets. Paolo Gallo and the management will introduce you to the concrete results that the integration of 2i Rete Gas and the delivery of synergies have produced over these months.

We are living through a phase in which the European energy system is under a pressure, which in the persistence and intensity have no recent precedent. Geopolitical instability has made it crystal clear in the good and in the bad. What was already evident to those who look at infrastructure with a long-term perspective. Energy security is an enabling condition for the competitiveness of countries and therefore, for the well-being of all communities. Networks, digital, widespread and punctual, resilient are the most concrete response to or better response that the industrial system can offer to this challenge.

Italgas has known this almost for 190 years. And today, in its position as Europe's leading gas distributor, it is best placed to take on this role with full responsibility. This has not been a position that's been won by inertia. In 2017, when the digital transformation of energy networks was still a frontier topic, Italgas made a decision that ran against the tide, yet provided farsighted to invest with conviction in the digitalization of its own infrastructure. That choice set in motion the progressive construction of a technology platform that today, beyond being a competitive asset is an international benchmark.

And which has proved to be the indispensable prerequisite for responding to the fluctuations and pressure to which the energy system is subject today. Anticipate rather than chase. This is the hallmark that always has distinguished the group's path. Italgas changes, grows and expands, yet remains faithful to what has defined it for many years, an industrial force that builds real progress, generates lasting value in the service of the communities, territories, countries in which it operates. Of this, we need to be grateful to all women and men of Italgas who have embraced with confidence this bet of organizational and corporate change.

Let me now hand over to Paolo Gallo. Thank you and best wishes for your work today.

Good morning. Good morning to everyone, and welcome here. Let me start with the presentation. I will be joined in a moment by Pier Lorenzo Dell'Orco and Pierre La Tour that will help me to present our plan. But before we move just a very quick list of the things that we are going to touch today. We are going to look at the market environment. It was mentioned by our Chairman before, we are in a very peculiar and particular time regarding energy. Then we will update you about the progress that we are making about the integration and the synergies we are delivering relevant to 2i Rete Gas acquisition. Then Pier Lorenzo Dell'Orco will present to you the investment plan and Pierre La Tour will give you the numbers of this strategic plan.

But before jumping into the presentation. Let me start with what happened in the last 10 years. In November, we are going to celebrate our 10 years of demerging from Snam and back to the stock exchange. I think this slide and this page tell you the story of the several promises kept, the promise to deliver a long-term growth mainly through innovation, the promise to create value for all our shareholders, to our people and the community that we serve, the promise to become an in-discussed leader in our industry.

In '17, we launched something that none of the other competitor has never thought, digitization of our network. In 2018, we started the journey in the energy efficiency. In 2021, we decided to participate and won the international tender in Greece, acquiring the DEPA Infrastructure. And later in '23, we scaled up in the water business. And finally, last year, we had the big acquisition of 2i Rete Gas. I think the numbers speak for themselves.Adjusted EBITDA nearly tripled, adjusted net profit more than tripled, and we delivered to our shareholders in this year, EUR 2.5 billion of dividends without an outstanding total shareholder return of 360% since 2016 listing. If you want to look from a different perspective, in 2016, we were 100% domestic gas DSO with strong heritage and also with a lot of conservatives. We were probably the most traditional, the most conservative company in the industry I ever seen. Today, we stand as an indispute leader in the gas distribution business in Europe, both in terms of size, but what matters most in terms of innovation capacity with business portfolio that has been enlarged to energy, efficiency and water service as well as an international footprint in Greece. All these numbers prove a successful transformation driven by a clear vision, and innovation culture that is today our DNA, a disciplined execution, and I would say thanks to all our people, men and women that has believed in Italgas and the vision that Italgas has developed over the years.

What is next now, which is the next chapter? So transformation is done, platform is available, is built and now it's time to deliver. And we have a clear 3 engines. The first engine that is going to be the core of this plan as well as the coming years is the AI transformation. This is where Italgas leads the industry by far, I would say, not only the gas industry. We are deploying agentic AI at scale, not as a pilot, not as a slogan, not as a POC, but a real lever for operational efficiency across the entire business. Smarter networks, smarter processes, smarter decision, AI has become the backbone of our operation. Consolidation is the engine #2. Italgas gas distribution market, the tenders finally are moving. Tender are accelerating, and we have already seen clear evidence in the past months. Furthermore M&A opportunities are opening up, and we are ready financially, operationally, strategically to capture them and expand our leadership.

Last but not least, synergies. We are not waiting. You will see the numbers are phenomenal. And only -- it is only less than 2 years from the acquisition. Our vision is very clear. We want to expand our leadership through network innovation and value creation for all our shareholders. This vision is built around our ability to drive innovation, AI transformation and energy transition, combined with our capability to allocate our CapEx and our continuously operational efficiency. This is the way that we run the businesses across the 3 segments in which we operate. Gas distribution remain our course -- remain our foundation for the future. Water services, where we think that our digital capability are bringing major improvement to reduce water loss and to increase efficiency. And the first results are already coming. Energy efficiency where that is across all our business, where we operate to support decarbonization of the system as well as reducing energy consumption.

And the vision translates into the goal -- the 4 goal that you see here, reinforcing our leadership in gas distribution through innovation, accelerating the digitization, even more important, accelerating the AI application in our day-by-day operation, provide -- deliver a sustainable growth through the return that are -- that make our shareholders happy and support the energy transition because our networks are at the core, are fundamental to provide an energy at cost competitive with security of supply and with decarbonization movement. Let me take a look for a moment about -- give you a general overview of what is going on the market. First of all, let me start from the bigger picture about global energy demand. Energy demand is on the rise.

And the drivers are structural, are not cyclical. World economy keeps expanding. The global population is growing, more people from developing country wants to use more energy. And on top of that, we have an entirely new source of consumption, data centers. The estimation is that by 2035, data center will require an additional 800 terawatt hours per year. It's a huge number. If you think about it is more than 2x the consumption of Italy of energy. This is something that we cannot forget about. And in this context, gases, and I am used the -- not gas, but gases as a term, will remain essential, combining efficiency, affordability, flexibility and reliability. For years, we have talked about the energy trilemma. And let me say that I first talked about this term years ago during an interview in London with Bloomberg. But I think that now energy trilemma is probably too -- it's a too simple representation of what's going on.

We are talking about security supply. Of course, we are talking about environmental sustainability, sure. We are talking about even more important, the cost of energy. But now on top of these 3 dimensions, there is a fourth one that is what I just explained to you, the increased demand that is structural of energy. And that reshapes the energy trilemma significantly. We are no longer balancing 3 forces. There is a fourth one that put under pressure the other 3 and the complexity multiplies. And I think we should abandon the term energy transition. We should talk about energy evolution. Why? Because transition implies that you move from one [ system ] to another for a period of time, that is not going to happen anymore. Now there is going to be an evolution where multiple molecules, multiple technologies, multiple pathway are working together to meet growing demand while continuing to reduce carbon emissions and assuring security of supply and more important, keep the cost affordable for industry and for citizens.

That is the reason why, as we always said, gas the DSO are not a legacy anymore. It is going to be a fundamental infrastructure that we help to manage this trilemma that has been -- has become a quadrilemma by the increased demand of energy. And let me just talk a little bit about the electrification. Electrification is the headline that everyone loves. But let me give some facts, some reality behind that. I mean, the demand of electricity is growing. There's no doubt about that. Drivers are there, and we are not hearing deny. But the electrification is not coming for free. If you look at the numbers, numbers show very clearly where we stand. The recent energy crisis, the rigidity of renewable energy production and the technical and infrastructural constraint are showing how this process of electrify everything is not going to happen. It's just a fantasy.

And it will never happen as somebody are imagined. You cannot -- and we cannot decarbonize our economy just using ideological position because we need to think, first of all, that we need to give to our economy, energy that is cost competitive. And in order to do that, you need to be sure that security supply is guaranteed. And in the next slide, in the next page, I will show you how our gas network and the molecules can do part of this job. The first driver is modulation as electricity is essential, but storing electrons at large scale is expensive, is not real -- it's not going to happen. Molecule, on the other hand, can be stored easily. We have already several storage and gas infrastructure is a natural storage too and release when demand peaks, helping the system manage volatility.

We can and we should pursue the decarbonization of the molecules, biomethane today, hydrogen, synthetic natural gas, or tomorrow, allow existing gas user to progressively reduce emission without forcing every customer or industrial process to switch technology at once. The third driver is infrastructure. Italgas, Italy as well as other European countries have an expensive gas network connected to [ home ], businesses, industrial district. Upgrading and repurposing this network is more efficient than duplicate with a massive expansion of electricity infrastructure that will not meet the target. So the message is balanced. Green gases do not replace renewable electricity. They make the transition more affordable. They make the targets more achievable.

By combining Electrons, decarbonized molecule and existing infrastructure, Italy and the European Union can move faster toward the goal set by 2030 and 2050. Which is the lesson that we can take from the recent crisis. How secure is the gas supply in -- for Europe, especially? And honestly, Europe is still exposed by -- let me say, by the natural situation. Europe has not a lot of energy resources. It depends for energy importation. But you can face that situation, you can reduce the risk of this situation if you don't rely on one single supply route, if you don't rely on a single area for supply. And I think Italy has proven as since 2022 that we can afford energy crisis if we are able to improve our infrastructure. And Italy has done a lot since then. And we have seen the result of that situation in the recent crisis. Just look at the level of storage today in Italy, that is a clear demonstration.

So which is the lesson learned that infrastructure are fundamental, investing in infrastructure, make the infrastructure redundant is the way in which we are preparing ourselves for any kind of future crisis. So in other words, the resilience is fundamental and the resilience comes from different solutions. It comes from optionality, and that's what the diversification delivers. Let me just spend a couple of minutes about the RePowerEU. If you remember, after the invasion of Ukraine, Europe, the European Commission has issued a RePowerEU as a way to get rid of the dependence from Russian gas. And the vision at the time was very clear to develop alternative sources, biomethane, hydrogen, energy efficiency.

I think Europe should take care again of this vision, but should put into action something that has remained just on paper. If you think about, for example, energy efficiency, I think that is the best way to reduce our dependence, the best way and the cheapest way in terms of reduce our energy consumption. I think that European Union should take step forward, should put into an action plan, the objective that were contained in the RePowerEU that are very -- still very actual, even if it was developed back in 2022. If we take a look at about the market outlook for Italy, and then we will look at about Greece, what we've seen is that we -- the gas demand is recovering from 2023 bottom, especially the civil segment is leading the way.

If we look further, and that is based on several scenarios, we see that the overall amount of gas demand remains stable, same line, same level of today with a growing penetration of green gases, biomethane and hydrogen, reshaping the energy mix and driving decarbonization from within. So it's clear that gases is and will still represent Italy's energy backbone for a long period. The molecules flowing through the network, of course, we see are greener over time, but the gas infrastructure itself stays central. Looking at Greece, that is our second country where we are managing gas distribution. Here, we see growth and momentum. Greek domestic gas demand has expanded sharply in the recent year with a double-digit annual growth over the last 3 years. This is a market still early in this journey with a significant room to run. And the engine, let me say, is the civil segment again, and this is projected to outpace the other segment.

And 2 main drivers are powering this. First of all, us, we are expanding the network. We are bringing the grid into region that didn't have access in the past to the gas. And second, there is the second driver is the conversion of the residential use of coal and oil into gas that is cheaper, that is safer, that is more reliable and brings also lower emissions. Now I'm going to touch the second chapter of this presentation that is relevant to what we have been achieved so far about synergies and what we expect to achieve in the years of the plan.

We are not just on track. we are raising the bar. That is a clear bottom line. In particular, we have identified since last October, fresh upside from AI-driven cost efficiency. That takes our target to EUR 280 million of synergies by 2032 compared with the baseline of 2023. That is a 12% upgrade in respect of our previous plan. And if we compare -- I mean, if we compare the initial estimation that we made in October '24 when we announced the acquisition of 2i Rete Gas, the initial estimation was EUR 200 million. So there is 40% above that initial estimation that I remind you was just a top-down estimation. This demonstration once again that Italgas works continuously in identifying new opportunity, new area for synergies.

And if we look at the delivery curve of the synergy, we reached EUR 35 million in '25. In the first quarter, we have already at EUR 90 million, and we confirm that by year-end, we will reach EUR 130 million of the overall synergies with already some AI savings coming into the picture. But if you look at the curve, you will see that the new curve is in every single year higher than the one that we showed to you last year in the strategic plan. Also on the revenue side, the work that we have performed since last October has identified as new area of investment in order to bring the 2i Rete Gas legacy network at our same level.

And we have identified roughly around EUR 300 million more of investment that will bring the overall revenues, additional revenues to EUR 120 million. And this activity to identify new potential investment has been carried out in these months while we are deploying the digital transformation of the 2i Rete Gas, we identified others, and that is the result throughout 2032. But let me just remind you the journey that in which we are. If you remember, in 2017, the -- we started with what I would call [ unglamorous ] work. Between the '17 and '24, we digitized and automated the network by developing more than 50 digital solution and addressing more than 300 processes in our company using our digital factory.

We were the first gas DSO to do that at scale, not as a proof of concept, not as a pilot, but at scale. And we put all our key assets under remote monitoring and control. We created a strong backbone of data, a strong backbone of processes, and now we stand on that. In the last 2 years, last year and this year, we are moving from automation to intelligence. And today, we have more than 55 AI model in production, over 120 agents we built ourselves in our digital AI room and more than 2,000 people trained to work with these AI agents. AI is not any longer a pilot in the corner. It's already a transforming force in how we run the business. Our ambition is another step up, hybrid intelligence, human expertise combined with autonomous agents working as one orchestrating workforce, using our trusted data because that is a fundamental prerequisite -- the data that you are using for AI should be of a good quality and a knowledge foundation.

Let me say in one word, our ontology. Let me show what the future is going to look like in our exciting journey. Start in the field, the control rooms that we have, the 2 control rooms that we have, one in Turin and one in Florence will become AI automated. AI reads alarm, look at the event, analyze the events, recommend the action and dispatch the crew. A live digital twin of the network will remain -- will be available to our people to simulate and plan scenarios before we intervene on the asset itself. Our people are not going to be replaced. Their ability will just be augmented by the use of AI and will make their intervention even more effective than before. If we look at the office on the other side, every person will have personal secure AI tools for drafting, research, analysis, drawing, to do the day-by-day job more efficient. Autonomous agent take what is repeitive with no value back-office work with human supervising and validating and is creating new roles, people dedicated to governing our knowledge, our model, our processes, our data.

As I said before, in a more comprehensive word, our ontology. AI does the heavy lifting, human stay in connection, in command. That is how we are going to build tomorrow network, and we have already started. Let me give you some example what -- and the least what we have already implemented, what's ongoing and the future. What we have already implemented, you can see it, it's producing the majority of the synergy in 2026. What's ongoing? We are scaling up, extending agentic system into claims, contact center, procurement, network optimization, engineering the future. The future is roll out even a larger approach. Agentic system reaching every relevant corporate and operational process addition with additional target of in-sourcing and [indiscernible] engineering and specialized technical task. The outcome is that we have confirmed the EUR 180 million pull from synergies, efficiency and in-sourcing.

And on the other hand, we have projected EUR 100 million of AI productivity and efficiency that has been upgraded about 40% in respect of our previous plan. But I want to show because I'm sure that there's going to be a question about that, some specific case that are already in operation and for which we have started to measure the result. 2 cases, field intervention scheduling was released in January '26. What does AI doing on that? It's an optimizing algorithm that pull every key pieces of operational data into each technician daily schedule. It put together appointments, maintenance, emergency, construction works in one plan. It accounts -- consider technician skill, shift, operational constraint, [ meter ], live geolocalisation. -- and it optimize routes and it do it every 30 minutes. After 5 months of using, the impact is significant. 10% increase in workforce utilization, 95% reduction in staff time spent in manual scheduling. I said 95%, just not to say 100% because we cannot -- we don't need any more manual scheduling. And this is just the beginning.

Second example, end-to-end customer request and complaint management. We receive thousands every year, 100,000 of this kind of requests. And this is a multi-agentic AI. So there are multiple agent AI working in an orchestrated manner. What they do? They read incoming e-mails, text, attachment and writing images. And then within that, the queries ,they enter our enterprise system, and they look at all the data available in our system, so metering, billing and CRM. From that, they replies directly to our end customer or eventually, if cannot be replied, they dispatch a technician. For this initial rollout because we just started this month, we deliberately kept a human in the loop. And -- but in this initial test phase of 1 month, the results are phenomenal. 60% reduction in end-to-end handling time. Customers get -- receive faster response. The communication are more structured, and we redirect our people toward high-value work. I wanted to give these 2 specific examples because they are in operation. So we are not talking about anymore pilot POC. Those are -- this is real life.

But now let me introduce Pier Lorenzo Dell'Orco on the stage and Pierre La Tour, too, on the stage. They will present to you, Pier Lorenzo Dell'Orco, the investment plan; and Pierre La Tour, the financial data. The floor is yours. Thank you.

Thank you, Paolo. I'm really excited to present you with the investment plan of Italgas Group. Last year, with the plan of last year, we set a historical record in terms of investment plan for Italgas. And this year, we're even increasing our ambition. You see here a general overview of the CapEx plan of this plan. We have designed a cohesive capital deployment framework, which touches all the business lines managed by the group for supporting growth. The left-hand pie shows the breakdown of CapEx by business, and you see that gas distribution covers more than 70% of the total CapEx, EUR 13 billion over the time horizon, 2026-2032. The 70% is made up of 64% for Italy, 7% for Greece. And then you will notice a piece of news, a significant increase in the share of CapEx dedicated to tenders backed up by, as Paolo anticipated, the acceleration of tender calendar that we are facing in the last 18 months. Then we confirm our ambition in investment in water and ESCo, and we have retained some financial flexibility for M&A opportunities, which covers 4% of the entire pie.

On the right-hand pie, you see the same CapEx broken down by area. And you see that network development and maintenance stays at the core of our investment plan covering 44%, and we have a significant increase in digitization and AI up to 27%. Let's notice that devoting more than 1/4 of the entire pie of CapEx to digitization is the best evidence of our ambition to become a real AI-driven technical network company.

So this is to say that all these investments translate into tangible and measurable operational benefits. We will invest in asset digitization and AI transformation to increase our service level and to reduce the cost, the efficiency. We will invest in the development of network basically by replacing older assets with new fully digital assets. And we will reinvest also in water, again, for operational excellence and in energy efficiency. All these translate into all in all, an increase in operational efficiency, enhancement of system resilience, leaks reduction, which is of utmost important for the impact the environment, increase in safety and enabling green gas dispatching, as I will tell you later. And on top of that, a reduction in energy consumption, which is, of course, of utmost important, both for economic reasons and for environmental impact reasons.

Let's look at the same amount of investment compared to the plan of last year. As I said, we are increasing our ambition. You see here EUR 13 billion, which marks an increase compared to last year of plus 14.6%, of course, excluding the expenditure needed for the acquisition of 2i Rete Gas last year. Let's look at the compare by business line. We see that there is an increase on gas distribution, net of the cash in coming from the mandatory disposals ordered by antitrust body. This proves our capability of sustaining organic investment in Italy. Same for Greece, EUR 1 billion is confirmed. So we have 1 year more compared to last year. But again, we confirm EUR 1 billion of investment. The significant increase in gas tenders, plus EUR 0.9 billion compared to last year, up to EUR 2.4 billion all in all. And I said, we have earmarked EUR 0.5 billion for M&A, and we confirm with a slight increase, our ambition of investment in water and energy efficiency.

Let's now look at the Italian gas distribution investments. That's the area where most of the acceleration in CapEx is coming from compared to last year. Digitization, EUR 3.2 billion marks an increase of 14% compared to last year. And this is basically because as we operate former 2i Rete Gas assets, we have fully integrated and now we have a full control over these assets, we are identifying new opportunities of digitalization together with AI development that Paolo has already mentioned. Then we confirm the amount dedicated to network plus centralized investment. These investments are fully driven now by digitization with our predictive maintenance tool.

So we are in a position of better allocating resources. So we maintain the same amount of investment, but we better identify opportunities for replacement of assets and upgrading of the network. And then on top of that, tenders, which marks a significant increase of plus 59% compared to last year, up to EUR 2.4 billion, driven by new tenders that will be awarded in the next years. Let's focus on gas distribution in Italy. I said EUR 3.2 billion dedicated to network -- sorry, for the digitization. And this marks an increase compared to last year. The chapter of these investments are basically the same that we have already identified, but more and more initiatives under these chapters are coming out.

So we will basically complete the digitization of the networks acquired from 2i Rete Gas by 2027. This is a confirmation of the target that we have already announced last year. We are quite satisfied of the extraordinary performances of our patented Nimbus smart meter. And so we confirm our intention of deploying massively Nimbus in Italy, and we will see also in Greece, and we have increased the number of meters to be deployed over the time horizon of the plan up to 6.5 million. Digitization under this EUR 3.2 billion. Two main chapters are digitization of the assets and smart metering deployment. Concerning digitization of the asset, we have conceived a 2-stage program leading by 2027 to 100% of the city gates remotely controlled by DANA from our control rooms in Turin and Florence.

The second step, we are already working on that will come later. By 2031, we will have completed the full digitization of the smaller plant, district governors and the smaller pieces of equipment across the network. Let's recall that with the acquisition of 2i Rete Gas, we have acquired a massive amount of plants, 12,000 district governors and 1,200 city gates. So we are saying that we are going to digitize this massive amount of plants in a very shorter time compared to what we have done on Italgas legacy plant portfolio. On the right-hand side of the slide, you see the smart metering program. As I said, we are excited about the performances that we are collecting from the field with new Nimbus smart meters.

We have now more than 220,000 meters in place, even more than that because every day, we are adding up new meters. So it's not a pilot or a test anymore. This is a commercial product, which is proved to be superior compared to all the other smart meters on the market. You see that the performances in terms of capability of transmitting remotely the readings of consumption are exceptional, nearly 100% compared to an average of 94% for GPRS or [ 2.G ] technology and 97% for the most modern NB-IoT technology. And again, for remote management performances, which is the capability of remotely disconnecting the gas when needed, the performances are even better compared to the average of the market, 95% compared to an average of 70%.

This, all in all, of course, translate into a higher level in service quality, but also lower costs for what we can do remotely. Now let's move to network. Network, we confirm more than EUR 5 billion dedicated to this chapter of investment. We will progress in repurposing and upgrading our network, which basically translate into replacing older assets with new fully digitized assets. On top of that, we are going to expand the network, especially driven by the tenders that have already been awarded that are included in this organic CapEx plan. And on top of that, some more opportunities in Sardinia, we have to complete the methanization project and the new entry in Cilento in the south of Italy, new methanization, an area in Campania, which has been brought to Italgas along with the acquisition of 2i Rete Gas.

All in all, we plan to work on more than 4,000 kilometers of network over the time horizon of the plan, putting together replacement of older pipes and extension of new pipes. And we are going to increase dramatically the rate of inspection for gas leak detection through the cutting-edge technology of Picarro that we have already fully adopted, and we plan to achieve 200% of inspection, which means, all in all, 300,000 kilometers per year to be inspected with Picarro fleet. An important part of this CapEx plan dedicated to network is driven by the tenders that have already been awarded and are included in the organic CapEx plan. Last year, when we presented the plan, we had 8 awarded ATEMs. Today, they have increased to 11.

We have 3 more. As I said, we've seen an acceleration in the tender calendar, and we will talk about later. But this increase in the tenders that have been awarded in this -- in the last 12 months has led to an increase in the CapEx dedicated to these tenders, EUR 1.3 billion, which marks an increase of plus 30% compared to the previous plan. This CapEx will allow us to work to invest in more than 2,000 kilometers of network, including extension and repurposing of existing networks. We will increase the redelivery points by 100,000 .And what's more, we expect to have 2 more awarding by the end of this year.

These 2 awarding are not including in this EUR 1.3 billion CapEx. We are waiting for the formal award by the committing authority. So let's move to the tender CapEx plan, which is one of the piece of news of this CapEx plan. As I said, we are experiencing a dramatic acceleration of the tender calendar over the last 18 months, an acceleration. So we have reviewed, as usual, our CapEx plan related to tenders, taking into account this acceleration in the near term. And in the long term, we have confirmed our expectations with no delay. So all in all, we plan over the horizon of this plan to be awarded with more than 100 ATEMs and to invest EUR 2.4 billion, which marks an increase of plus 59% compared to the previous plan.

And the addition in terms of redelivery points resulting from the awarding of these new tenders is equal to 2.5 million redelivery points at the end of the plan with an increase of plus 20% compared to last year. Our investments are not only dedicated to the network itself, but in general, enables the unlocking of green gas potential in Italy because through digitization and through the installation of new biomethane connection, new reverse flow plants and whatsoever, we are in position of fostering the development of green gases. Two chapters here, biomethane development. We confirm our expectation of increase in terms of new connection up to 1.2 billion cubic meters per year of biomethane injection into our grids by 2030.

Consider that only 3 years ago, we had only 1 connection to our grids. Today, we have 15, and we plan to reach 50, 5-0 by the end of this year, considering all the connections that are under construction today. We have, meantime, started the operation of new reverse flow plants, innovative plants that allows us to debottleneck the grid in order to receive the full amount of biomethane produced by the producers. And looking at hydrogen projects, we have, as you know, inaugurated the first power-to-gas plant that we had announced last year in October in Sardinia. The plant is operating exceptionally well. And around this plant, we are building stream -- a line of a work stream of R&D projects. First of all, blending the hydrogen together with natural gas. both in Sardinia and we have initiated a second project in the center of Italy.

Right today, we are increasing the blend percentage up to 5%, so above the law, above the threshold set by Italian law, of course, in agreement with the bodies entitled to control, the Ministry of Energy, the fire brigade because we are using this plant as a platform to test the increase in terms of blending and hydrogen injection. And we plan to reach 20% by the end of this year, which will make this plant a unique site all over Europe. And on top of that, we are designing new R&D projects around the plant concerning the installation of a fuel cell, which will use the surplus of hydrogen produced when there is no demand from the users and the installation of a Methanator pilot plant, which is basically a plant which produces synthetic methane by the combination of hydrogen produced by our Power to Gas plant together with carbon dioxide.

Let's move to Greece. In Greece, we are confirming EUR 1 billion of total investments in this plan and 60% of this amount will be dedicated to the network and more than 1/4 again to digitization. Looking at the network, we plan to lay down more than 2,700 kilometers of pipes, landing at the end of this plan to 11,400 kilometers of network, which marks an increase of 200 kilometers compared to the previous plan. In parallel, we plan to increase the number of redelivery points connected to this network by 56% until 2032, reaching more than 1 million redelivery points at the end of the plan. And again, this figure is increased compared to the previous plan. We are going to fetch new opportunities of development, especially in Western Greece and Epirus, which will sustain this CapEx plan.

And again, in Greece, we are porting the technologies that we have successfully experienced in Italy with our assets, both in digitization, smart metering and biomethane and green gases. Concerning digitization, we plan to digitize 100% of the plants of [indiscernible] by the end of this year. We have already reached 94%. So the target is -- we will, for sure, catch this target. We plan to replace all the traditional meters in Greece with new Nimbus, and we have developed a specific Greek version of our Nimbus for this purpose. We have already installed more than 5,000 Nimbus there, and we will plan to replace completely the traditional meters with Nimbus meters by 2030.

And looking at biomethane, although Greece is a step behind Italy in terms of legislation incentive schemes, in Greece, a new law has been recently enhanced, which sets clear rules for biomethane development. So we are pretty confident that there will be a very good opportunity for biomethane development also in Greece. That is why we are working in order to promote connections to the grid. We have none as of today, but we plan to reach 59 new connections by 2032. Then let's touch a little bit M&A. As I said, we have earmarked EUR 0.5 billion for M&A opportunities in Italy and abroad. We start from the fact that we have proven to be fully capable of creating value through M&A, both in Italy and abroad.

And with the recent 2i Rete Gas acquisition, we have demonstrated to be able to fully integrate the merged the acquired entity in a very short period of time to streamline the operation, to create synergies, to fully digitize the assets with a shorter time track. So we will leverage on these capabilities in order to evaluate any new opportunities in M&A in Italy and foreign countries. We're not announcing any deal today, but we are ready to evaluate any opportunity, which meets a very stringent set of criteria. That is why we say disciplined M&A strategy for selected options. Basically, we will look at stable macro environment, which supports long-term infrastructure investment, a place where the regulation is fair enough and predictable and deals where Italgas can play an industrial role in order to create value through our best practices.

We are not really interested in being a pure financial stakeholder. Let's move to water. In this sector, our priority is basically to enhance system resilience and operational performance. We plan to do that by continuing the investments that are already in place under basically 2 chapters. You see here on the left-hand side, interventions on infrastructures. We plan to intervene on more than 1,000 kilometers of connection and pipelines, both by replacing older pieces of assets and extending the existing assets. And we plan to upgrade some infrastructures that are dedicated to, for example, wastewater treatment or the network itself, for example, in Sicily.

Right-hand side, the second structure concerning digitization and energy efficiency. And here, we are deeply leveraging on the capabilities of Italgas in the gas sector and geoside for energy efficiency services. So we plan to digitize 100% of assets in water industry by 2027 to enable remote control like we do in the gas, introduce AI agent automation to increase the efficiency of our operations and to complete smart metering. And on top of that, we are deploying some energy savings initiatives in order to reduce energy consumptions on this grid. On top of that, we are assuming that within the time horizon of the plan, we will consolidate Siciliacque and Aqua Latina.

So the combination of our investments together with the consolidation will lead us in a sharp increase of the results of the water business over the time horizon of the plan. We plan to double the revenues. We plan to triple the EBITDA. We plan to increase the RAB by 8x up to EUR 350 million. We will reach an EBITDA margin higher than 55%, and we will slightly increase the CapEx dedicated to water by EUR 50 million, reaching about EUR 0.5 billion total investments.

Now let's be...

Speak a little bit about one of my favorite subject that is the energy efficiency Geoside. Why I'm saying my favorite subject is because I said before, energy efficiency is one of the big lever in order to achieve the energy transition target, the decarbonization and so forth. Unfortunately, it's the probably most tough job that we need to take, but it's extremely interesting and challenging. And the fact that Geoside, first of all, is working with all the group companies in order to test to do pilots and then to deploy new energy efficiency solution is the proof that we strongly believe in the energy efficiency. And then Geoside after testing that is offering similar solution or same solution also to a third party.

The focus here is exactly the same in the gas distribution, digitized solution to the customers and using all our experience in gas distribution as well as AI to improve operational efficiency of a third party. You know that the regulation has become stricter, less subsidies, but we still think that there is another way in which we can achieve the energy efficiency target, especially in the business-to-business, that is our first priority. And in that case, we are ready to invest also from our side in order to support industrial customer in achieving less -- in achieving energy efficiency because if you are able to reduce your energy consumption, you become also more competitive. And we are dealing with several different industry demonstrated that is a path that they [ way fast ] can follow. And we are using our tools, SaveMixer, and all AI application that Geoside is developing.

But we are very focused on value. So creating value for our customers and for us, we are not focused just making volumes of that. That is going to be -- has always been our view. Nearly EUR 300 million of investment over the planned period, some small M&A in order to open up our offer. And you see our adjusted revenues by 2030 with an EBITDA of margin that is going to be around 20%. So that makes a completely different energy efficiency company from the other ESCo that are present into the market.

Let me just conclude before giving the floor to Pierre La Tour about our environmental target. Last but not least, we have review our targets for 2030. We have increased in the gas distribution the targets. I should remind you that last year, the level of emissions -- the reduction in terms of Scope 1 and 2 emissions was 55%. Now we moved the target to 68%. The net energy consumption was down last year, the target 35% now is 41%, keeping the same net zero target for 2050. And that's why the reason is that thanks to the digitization, but then AI solution, we view that the target can be achieved, and that's the reason why we raised in respect of last year plan.

Regarding the water, I mean, still the target that we said last year are very ambitious, reducing by 1/3 the Scope 1 and 2 emission, energy emission as well as leakage rate on the distribution. It's really a very tough ambition, but we are fully confident to reach them backed by our digital solution and AI solution. And finally, we confirm the Scope 3 objective to reduce by 24% by 2030.

Now it's time to reveal the numbers. Pierre La Tour will take the floor.

Thank you, Paolo. So good morning, everyone. Let's now move to the final part of the presentation and take a look at the financial targets. So we start with this overview. Now our strategic plan is designed to deliver superior earnings growth, maximizing on our key levers. What are these key levers? The first one is disciplined investment allocation. Second one is operational efficiency. And the third one is balance sheet strength.

Now these levers are, of course, very much in line with the previous plan that was presented back in October. And if we now move on to the 3 graphs on the slide, we see on the bottom left, the first one, which represents the 15% increase in the investment plan versus the prior plan.And this will be achieved via a disciplined capital allocation, which is focused on our core gas distribution activities, including tenders.

The second is a continued focus on our operational efficiency, which is supported by our technological leadership and optimized asset management on top of incremental synergies from investments. Now the third one, I want to underline this point because I think it's extremely important, is our balance sheet strength. Now we have our operations, which include investments and dividend distribution, which are substantially covered by our operating cash flow. Why is this important? Because this allows us to have the necessary financial flexibility to pursue incremental growth opportunities. If we move to the next slide. Here, we have a view of our total RAB. So from EUR 15.7 billion to EUR 21.7 billion in 2032, which implies a 4.7% CAGR. In other words, the 2032 RAB target is EUR 1.4 billion higher versus the prior plan. And this reflects additional investment opportunities in tenders and a higher level of organic CapEx. If we were to exclude tenders and M&A opportunities, our RAB is expected to reach approximately EUR 19.4 billion which implies a CAGR of approximately 3.1%.

Finally, on redelivery points, including tenders, the plan reaches 16.1 million. So this is 0.7 million above the previous plan in 2031, of course.

Moving on to our EBITDA. Our EBITDA is set to grow strongly. So from EUR 1.88 billion reported in 2025 to around EUR 3.3 billion by 2032, delivering a CAGR of 8.4%. Now the key driver in this growth is, of course, organic. We're planning, we've seen it, significant RAB expansion, faster synergies, a higher level of efficiencies and AI with tenders providing additional contributions. And of course, all of this is managed through a disciplined capital allocation.

Now this bridge shows the impact of efficiencies and AI synergies versus 2025. We've seen revenue synergies that are embedded in the overall growth trajectory, whereas, as Paolo pointed out in detail, our total cost synergies are EUR 30 million above the previous plan. Our 2032 EBITDA remains highly resilient. Approximately 88% is linked to our Italian distribution, including tenders, where tenders represent approximately 11% of that 88%. The remaining 12% is, of course, represented by Greece, water and ESCo. And the message here is, of course, that we want to increase diversification while keeping our portfolio firmly anchored to regulatory distribution.

Moving from EBITDA to our bottom line. This slide shows that our growth converts directly into a superior net income and EPS trajectory. We're targeting yes, CAGR above 9% through to 2032. This is broadly in line with the last year's guidance. Of course, taking into account the same starting point.

Net income, you can see is expected to exceed EUR 1 billion as early as 2029. This is a significant milestone and confirms the quality of our growth profile and the operating leverage that is embedded in the plan. So in a nutshell, the message is simple. First, we're targeting EBITDA expansion. Secondly, we are targeting a disciplined financial management. And third, we are targeting synergy delivery. These are the 3 key enablers that will translate into sustained earnings growth and increasing value for our shareholders.

Moving on to our credit profile. This remains very robust and resilient while supporting a materially higher investment plan. We're expecting our net debt to RAB to go back in line with our rating agencies' thresholds, and we're expecting to do so in the midterm. This, of course, is a confirmation of last year's plan. And then looking forward, towards the end of the plan, we're planning to reach approximately 61% by 2032. So a continuous deleveraging process.

Regarding maturities, the profile is well spread and largely protected by our fixed rate debt. And our financing strategy remains disciplined. So we will maintain a robust liquidity buffer on the one hand, while on the other hand, we will keep fixed rate debt well above 70%.

Let's take a look at our financial guidance. So for the current year 2026, we are confirming the guidance that we issued less than 2 months ago. So our adjusted EBITDA between EUR 2.1 billion and 2.15 billion, our adjusted EBIT between EUR 1.34 billion and EUR 1.37 billion, adjusted net income between EUR 0.74 billion and EUR 0.76 billion. Our technical CapEx at approximately EUR 1.5 billion. And our net debt in the range of EUR 10.8 billion.

If we now move to 2032. Our revenues are set at approximately EUR 4 billion. Our EBITDA is at around EUR 3.3 billion. EBIT at approximately EUR 2.2 billion. Our consolidated RAB at approximately EUR 21.7 billion. And as we said, our leverage to come down to approximately 61%.

On top of this, 2029 is already looking better than the guidance provided in the previous strategic plan, and you can see it highlighted in this -- on this page.

I now leave the stage to Paolo for our dividend. Thank you.

Thank you, Pierre. So we are at the end of the presentation. Yesterday, during the Board of Directors, we discussed the dividend policy. As you know, it's our practice to review the policy annually. If you look back over the years, we have always supplied a 65% payout, never use the floor, meaning that we were able to always to create an attractive and visible return for our shareholder. And for this reason, the Board of Director yesterday decided to reaffirm the same dividend policy to 2028, 65% payout on adjusted EPS and floor mechanism, knowing that the floor mechanism, we're not going to use it in the future. So we confirm that we will be able to pass the floor mechanism every single year, as we have already demonstrated.

Let me just summarize what we have seen. We are [ in discussed ] leader in our sector, in our industry for size and for capability to innovate and introduce new tools, AI first, to create value and to reduce our costs as well as to improve the quality of our services. The plan is built around committing EUR 13 billion of investment, accelerate digitization, expand the regulated asset base. And you heard what Pierre was talking about, the numbers. AI is going to be the core for the months to come. I'm not talking about the years to come because the AI evolution is so quick that we don't talk anymore about years. We talk about months. And it's going to be our backbone for our operation. We are pleased that there is a clear improved tender scenario. I wanted to use the terms, back to the future, remind some nice and famous movies. So finally, this is the first plan, strategic plan, that is the [ number 11, ] in which we are able to say that the tenders are accelerating. If you remember, every single plan before was that the tenders were delayed. And the numbers are proving it. So we are not just inventing, the numbers are proving it. Pier Lorenzo told you how much has been already incorporated in our organic growth and how much we are expecting again, in 2026 and 2027.

So based on all what I said, we think that we will be able, as always, to create value for our shareholders. This plan is ambitious, especially on the synergy side, but it's fully executable. I mean we have a clear track records of the promise that we made and the promise that we were able to deliver.

Thank you very much for your attention, and I open the floor to the question. Thank you.

We have several people there. So I'm just going on order. Please ask -- say your name and company name as usual to register. And James. And then we go in order.

It's James Brand from Deutsche Bank. I have three questions, if that's okay. Firstly, on [ ROS ]. Just wondering if you've got any more visibility on what to expect there? I think that's probably not, but I'll ask it anyway because obviously, quite an important topic and what have you incorporated into your plan for [ ROS ], if anything?

And then secondly, just on the tenders, I was wondering whether you could explain a little bit more why they're accelerated. Is that because there's been any kind of change in the rules or the legal framework or there's just less legal challenges? It's just interesting as to why that's happening.

And then thirdly, you mentioned that you were deleveraging over your plan initially in line with what the rating agencies required, and then it sounded like maybe further thereafter. Is there a reason for that? Is that because you are more comfortable ending up at a lower level of leverage? Or is it just because going out to 2032, you want to leave some optionality in the balance sheet if there are further investments?

I'm taking the first question. And the first question is say, no, I mean you responded to your question. There is no more visibility in a sense that we are waiting for the regulator ARERA to release the first consultation document. Of course, in our plan, we have taken into consideration as we did in the past, some amount of money that should be given back to the system based on our efficiency. So it's included in the plan, but does not include the full ROS because we don't know the details. We feel, notwithstanding what I said, we feel that the ROS application will be, and you have seen it in all the presentation, will increase our flexibility and it will increase our ability to act as an industrial operator even more.

And if you -- if I may, there is a very limited, very RAB application of weightings. I think about the centralized RAB. Centralized RAB works on the -- on the concept of I will provide you a tariff that is a number of euro per delivery point for everything that is not in the RAB. So I think about buildings, car fleet, IT and then you do what you want. And that is where we were able to extract more value because we decided without, let me say, having any constraint to be, it's OpEx or CapEx. It's just receiving a certain amount of money that is a tariff and then deciding which is the best way to use that money, investment, renting, leasing, IT, and that is what we did.

So it's a small example of application in which our ability to use in the best way that money is already demonstrated. So I'm hoping that the ROS will come into force very soon because then we can extend this approach also to the operation. I'm thinking also the third one, sorry for Pierre for advancing but I know that this question was coming. So I'm already -- you raised every time. I mean, first of all, we need to go back under 65% -- that is the commitment that we took with rating agency. We want to keep the rating as it is. And then the fact that after we go below 65% means that we will have and we will probably find some other -- as in the past, some other opportunity to invest.

So I was thinking that you were asking about dividend policy or buyback. So I have anticipated eventually answer. We are going to use all our financial flexibility to take opportunity. As of today, as you've seen, we have put a limited number on the M&A, but that does not mean that if there are opportunities coming up, we will use that financial flexibility to take this opportunity and to deliver superior return to our shareholders.

tenders is Pierre Lorenzo Dell'Orco that is looking after every single day, what's going on?

Yes. Well, there is not a single, I would say, a single reason for this acceleration. I would rather talk about a wide variety of reasons on a case-by-case situation. I would say, first of all, let's start with the consideration that a lot of committing authorities in Italy, which are entitled to release call for tenders, they have been collecting the documents required for the call for tenders for years now.

We have committing authorities that have required that requested to Italgas for 10 years in a row, the documentation, which is needed for releasing a tender while postponing the issue of the tender. Now I mean, they have realized that time is now and they have to release the tender after so many years. Then there are some other cases where municipalities are really interested in having a new operator, which is capable of investing, modernizing the grid, expanding the grid, making the grid ready for renewable gases, things that are hard to comply if you have smaller operators with an uncertain horizon ahead of them. So they're pushing to have this tender in order to foster a new investment.

And then there are also some municipalities which retain the ownership of part of the grid, and they are interested in selling the grid. To a new operator, and they can do by law, they can do that in Italy only through a tender and not on a single -- on a one-on-one negotiation. So they're pushing to have these tenders in order to monetize their stakes in the grid. So it's a wide variety of situations.

Bartlomiej Kubicki, Bernstein. If you don't mind, I will also ask 3 questions. I'll touch base on 3 topics. First of all, on M&As. And just going back to the history, you had an M&A wave where I think you bought like EUR 200 million or EUR 300 million of assets, small premium to RAB good transactions. And then somehow it disappeared. -- probably, I don't know, there was no market for M&A. And now you are coming back to this topic. So I wonder whether something has changed, meaning are the smaller players somehow suffering and they are willing to be sold.

And also, if you think about the other side, the buyer side, what are the latest reshufflings on the markets, think about your disposals, think about other players selling assets, whether there is an appetite, do you think there will be a higher competition for assets to be bought both in M&As and in tenders from other players? So whatever is the willingness for others to consolidate the market as well.

Second of all, I would like to ask you about the topic, which I think is quite widely discussed, which is the affordability because obviously, if you put more money into your network, you increase your revenues. And I guess we can all, more or less, all agree to a scenario, but it's quite difficult to imagine an increasing demand in gas consumption from households. So consequently, this should translate into higher tariffs. So I just wonder, in your mind, what is the outlook for gas distribution tariffs in your perimeter, given the CapEx or investments you would like to do. And the last point, very short on AI.

Just -- you said 3 questions now you are on 4.

I'm happy to.

That's okay. You can do it.

Okay. I'm just on AI very quickly because currently, we are seeing AI impact on OpEx, AI impact on revenues, but whether in the future, we can see AI impact on CapEx and consequently, potential CapEx cuts because you will be able to deploy artificial intelligence better.

Okay. First one, something has changed. Let me say that if you remember, the period in which -- I mean, you remind very well the period in which we were able to deploy a number of significant, I think, 11 or 12 M&A transactions, small transaction. That was the time in which there were debating about tenders. So we were still saying that the tenders were ready to come and so forth. Now the fact that the tenders are coming, numbers are proven, probably somebody sees some -- that is our perception. Some small operator will see the opportunity to not to wait until the tender, but just to sell the overall company.

Remember that when you sell through the tender, you sell assets, you cede the people that are working on the asset and you cede some -- and that's it finally. So if you still have a company, maybe you think that is the right time to anticipate a little bit the tender and to sell it before. That is our perception as of today. So the 2 things, the tenders is moving and there are opportunities on the M&A, at least in Italy, I think that the 2 things are going together. That is my -- our perception. It's one explanation. It may not be the right one, but I'm just -- we are just bringing you facts. From the buyer side, I think that it depends on geographical. What we have seen when we made the disposal is that the we were -- I mean, what we disposed is assets that were located in specific geographical area of interest of the buyers.

Some other did not attract any interest. So, there may be some competition, maybe yes, not everywhere. That is my answer. Affordability, first of all, we have -- let me say, we have shown that the gas demand will remain stable over the plan period with an increase on civil demand, slight increase in civil demand. So we don't see what maybe you see somewhere else that there is a decrease in gas demand.

What about the tariff? It's true that our revenues are growing, but our perimeter is growing. So it's not -- the increase of the revenues are linked to the increase of the perimeter and the increase of the RAB. But let me say on the other side, and that I have already responded on the previous question, in our plan is embedded the amount of cost that will be given back to the system. I just remind you that in the period 2017, 2025, so the end of the regulatory cycle, we gave back more than EUR 300 million that are coming just from cost efficiency. So my -- the point is very clear with our investment plan, first of all, the perimeter is enlarging through tender, for example, or through M&A. And we are able to deliver to the system a benefit through better quality, but also through less cost.

And because of the regulatory system preview that and foresee that some of our efficiency should be given back, and we are very happy to give it back, demonstrating that with large operators like us, we are able also to bring benefit to the overall system, not only in terms of quality of the network, flexibility of the network, technology advance and everything else, but also through reducing the cost and giving back this efficiency, part of this efficiency back to the system.

On the number 4, yes, AI is impacting already CapEx. When I mentioned, for example, engineering, engineering is CapEx. What does it mean that we are using and we are developing AI agent to start building our engineering activity, at least on the basis. So it will be more efficient, but I would probably say also more quick. So we are going to gain in terms of efficiency as well as we are going to gain in terms of time. So sure, AI, I mean, you see impact directly on the cost, but there are also activities that we are currently developing on the CapEx side. Engineering is the first area by far.

Julius Nickelsen here from Bank of America. Two questions from me. So you basically upgraded the synergies and cost efficiencies target and front-loaded some of the tender assumptions. Yet the 2029 net income guidance is reaffirmed above EUR 1 billion. So I'm just wondering if you could maybe quantify that a little bit like because I would assume that the number that you have in your budget is higher than was the last plan, but it just is higher than EUR 1 billion.

And then my second question is on the tender chart that is in your presentation, just in terms of how to read it. I think you said previously that in 2026, you would expect around 12 tenders to come online. a few imminent, a few more later in the year. Are these 12 all here counted in 2026? And can we assume then that 2027 will be more? Or is the way the chart has shown that a few have slipped into 2027, and that's why 2027 is higher? Just trying to understand the phasing a little bit better.

If you can just repeat, I lost your first question. Obviously, I did not understand your question.

No, no worries. I was just curious why you only reiterated the 2029 net income guidance.

Because we don't wanted to give you the right number. Simple as that. So it is the 2029, the net income is higher than the 2029 net income of last year or last but we didn't want to get into these numbers. So we just say it's going to be above EUR 1 billion. Then it's up to your fantasy to guess how much is tenders scheduling.

Yes, some figures, just to be clear on that. So as of today, we have been awarded from the very start of the tender process, 11 tenders. That is the figure that has been incorporated in our organic plan presented today.

In the organic growth Organic growth. Sorry, it's not in the tenders price.

Yes. 11. It's 3 more compared to the previous plan. Last year, we said 8. Now this 8 has increased up to 11. Then concerning new tenders to come, we have increased our forecast on near term, which means that we have been facing new releases of tenders that were not public last year. So all in all, we plan around 2 tenders to be awarded to Italgas by the end of this year.

High probability, let's say...

Very, very high. I would say it's -- and on top of that, I would say, 9 to 10, maybe 10 tenders next year, which are tenders that have already been published and we are working on that.

For which day presentation date '26.

Yes, it's '26. And we have some more expectation of tenders to be published in the second half of 2026 with offers to be presented in 2027 and awarding to take place 6 to 12 months later in 2028, and this builds up the new plan. So there is an acceleration all in all.

It's Dominic Nash from Barclays. Three questions, please. The first one is, can you provide some color and some assumptions around regulatory returns underpinning your EPS and EBITDA growth targets? -- particularly post 2028. Like how sensitive is your EPS growth numbers if the returns were to be reduced? On that as well, your GBP 13 billion CapEx program, how much flexibility would you have around that if returns were too low, could you dial down the investment into your system?

And what assumptions you've got for your sharing between customers from your efficiency between shareholders and customers? And I just have 3 questions, but final one you picked my interest at the start about the carbon pricing. I think Italy has been potentially at the forefront of maybe redbating the carbon policy. What probability do you put on a material change in the carbon pricing going forward, please?

Okay. Maybe I will ask you to clarify some of the questions. What we have assumed as always, we didn't take any position about changes in the WACC over the plan as always. That is our policy. We run internally sensitivities about if the WACC is going up or down. So we know exactly how the plan eventually will evolve in case the WACC is going up and down. So we know exactly which is the impact of changes in the WACC. But as usual, we don't take position on that. We are in the middle of the observation period. So we don't know yet what is going to happen by the end of September. If you can rephrase for me the second question, it would be nice, so I can respond more.

Yes, the second question is one that if they reduce returns going out, what flexibility have you got to reduce the investment in the system?

Well, I think there is always flexibility in the CapEx side in a sense that is -- the plan that we present to you is normally the base plan, the basic, the one -- the most -- the one that will give the highest probability, but we have also flexibility to either to increase or to reduce the CapEx plan depending which is the situation. So honestly, I tell you, there are flexibility. So there's no doubt about that. But in both directions. If we need, we can grow it, we were talking about before the financial flexibility. If we need, we can grow it.

If we feel that it's important to reduce, we will do it. So we will adjust our plan accordingly to the point. Regarding the -- if I'm correct, the sharing of the efficiency, right, that is what your question. Up to end of 2025, it was very clear. we had to give back all our efficiency. The EUR 300 million -- about EUR 300 million that we gave back to the system is the number. And that is coming through, if you remember, 50% given back in 2020 and then later on with the X factor. We have embedded a sort of factor inside our plan to consider that there will be something after 2000 -- in the years to come. Of course, we expect to have the ROS system in place.

We will see how the efficiency sharing will be shaped. But in the meantime, just to be on the safe side, we have embedded such, let me say, so-called X factor inside our plan. That is consistent with the past. The last question, Pierre Lorenzo also considering his being the President of Proxigas, can give you more flavor on that.

Well, first of all, let's consider that Italy is a member state of EU. So we are basically not in position of setting an autonomous scheme. The scheme we have is ETS, Emission Trading Scheme and soon to come, the so-called ETS2, the emission [indiscernible] extension of the scheme also to end users like families, like vehicles, like industries. And on those 2 items, the Italian government has open discussion at the European level. They have issued recently a decree, which we call the energy decree, introducing new measures in order to reduce the -- basically the bills paid by enterprises and families.

And among these measures, they have conceived some measures in order to mitigate the effect of ETS on the price building of kilowatt hour of electric kilowatt hour, which basically translates it into sterilizing the impact of ETS on the cost of electricity in order to reduce the price of electricity, which in Italy is produced for more than 50% with natural gas. The decree has to be cleared by the European Commission. So there is an ongoing debate, a table open between the government, the Italian government on one side, and Brussels on the other side, in order to approve a final clearing of this.

So we're waiting for that. Then we will have to approve the national law enhancing the ETS2 scheme. Again, some piece of news will be possible for that in order to mitigate the impact on families consuming natural gas, but no figures on that.

Javier?

Very difficult to make any question after my talented colleagues, but I will try. Three on my side as well. The first one is on the philosophy of the business plan. So my impression is that the company is maintaining all optionality within the business plan. So it's a long-dated business plan that goes until 2032. Dividend policy just goes up to 2028. And the impression I get is that the company does see opportunities to deploy capital. So deploy capital in new tenders, maybe M&A. I was interested in one of your comments mentioning that there are opportunities maybe in other infrastructures in Italy and elsewhere.

So on that philosophy, what Italgas has done with a gas distribution network is replicable to plenty of other networks. So can you share with us your views on what could be next for Italgas deploying your talent into different infrastructure, where and how -- that would be the first question.

The second question is on your extraction of synergies process in the companies that you have bought. I guess that one of the reasons why there is an acceleration on the tender is that the system see the benefits stemming from the acquisition of gas, more deployment of capital, more acceleration on the benefit for all stakeholders and so on and so forth. So I think that it is pretty evident that, that benefit will continue. But the question for you is where we are in the business plan reaching the level of efficiency of the previous Italgas and then the Greek activities.

And the third question is, if you can -- that is on the business plan granularity. If you can be a little bit more specific on assumptions related to the allowed return on RAB, I guess it's flat through the business plan. presentation then on the deflator assumption that you have assumed and also on that X factor, the assumption that X factor that you are embedded into your numbers?

If I may summarize the first question is that -- well, the dividend policy ending in 2028 is because in 2028, there will be -- the Board is going to expire. So we don't want to commit for another Board. So that is just consistent with the period, the time frame in which the Board has been appointed. Generally, as an answer, we see this opportunity, and we have demonstrated that we can deploy capital in other infrastructure or in other geographical area, and we can bring the same approach that we are using in Italgas and we can bring value. Let me make just a very quick example. Greece that is not close to Italy is a different language. We were able in much shorter time to have the same journey that we had in Italy.

And thanks to the fact that we are able to immediately learn from past experience and apply for the future. So Greece spend was able to do it in 3 years' time, what we were able to do as a first time, it took us 7 years. So that is a way in which we learn from our mistakes and we adjust our behavior, our trajectory, our journey in order to be much more effective. The water activity is another example. We are using all our gas capability to increase and to improve the result of the water activity, and we are start seeing the result. less leakages more portion of the network that is fully digitized through digitization, we are able to reduce the leak or even the project capability. I mean in Sicily, we were able in 6 months, 6, 8 months to build 3 new desalinization plant that was never achieved before. So we put at disposal in that case of Secily, our ability, our project management ability to fulfill and to tackle with the task.

So as Pier Lorenzo was explaining to you, we are looking around not only in Italy also outside Italy with the 3 lens that we tell you. First of all, a macroeconomic situation that look nice. So European Union, generally speaking, is true everywhere, more or less. more important, a fair regulation, fair and stable regulation. And the third one, if we can have a clear industrial role. As Pierre Lorenzo was saying, we are not interested in financial position. We are interesting because I'm going back to the question because we are able to bring value, to bring expertise, to bring competence to any new acquisition.

The second one is regarding synergies. We cannot -- we cannot tell you now that since July 1, Rete Gas is completely merged in Italgas ready, we cannot tell you which is the level. The 2 companies are not distinguished. You cannot distinguish them anymore. What we can say is that based on the detailed work that we did at the beginning of the integration, that's the reason why we were able to progress forward in our efficiency because once that going through the activity one by one to be implemented in order to create value to reduce our cost, we find other opportunity, mainly driven by AI.

Greece, as I told you, is if you remember, a couple of plan ago, we told you our Greek ambition that should be close to our result in terms of efficiency, even if it's smaller, I think we are there already. So we have already reached that level. But I think on the same time, the bar in Italgas has raised. So Greece is continue to have some gap to be filled, but that's normal because our ambition is going after -- then I lost the fourth question.

Yes, he was asking about the WACC, the X factor.

Anna, you can respond.

Yes. So as Paolo said before, for the WACC, we have maintained the same WACC across the plan period. On the deflator, as you see in the slide, we have around 2% on average. And on X factor, you listened to his comments before, we don't -- it's something similar to the past, but we haven't.

Experience.

Number.

Correct. So I didn't know the number of the deflator you're right. The average is 2%.

So next question, Francesco from Banca Akros.

Francesco Sala, Banca Akros -- just to complete the picture on the assumptions, if you can share with us your assumption on the cost of debt, both, let's say, in the next few years and throughout the entire plan? And secondly, as regards to the water business, the growth is exceptional. So I wonder whether you can share with us the main drivers behind this growth behind obviously the capital deployment?

And secondly, also on the water business, it seems to me that based on previous calls that you would be happy to invest more or, let's say, grow externally in this area, but the opportunities are not so easy to catch. So I wonder whether the scenario has changed or it's remained the way it was a couple of years ago. And those are my 2 questions.

Okay. Thank you. So regarding our cost of debt, so what we're foreseeing is for it to gradually increase slightly and basically end up at approximately 3.1 -- just over 3% towards the end of the plan. Why? This is because we've projected, of course, an interest rate curve. And according to our projections and to discussions that we've been having with certain financial institutions, -- we're foreseeing an increase in reference interest rates and subsequently a gradual decrease starting in mid-2027. And so this brings our overall cost of debt to approximately just over 3%.

Remember that some of the bonds were issued when there was a different completely period in which we had -- we were looking yesterday, there is one bond that was issued with 0 interest rate. So it's difficult to lower the interest rate. And there are many others that were issued, 1.6, 1.7. So that's -- I mean, with the interest rate where we are today, it's clear that our interest expenses will slightly increase over the plan period as much as we are going to replace and issue new bonds. Regarding the water, I will not say it's -- thank you for the exceptional increase that is not -- I mean, we are not magician.

It's just that we are consolidating 2 of the companies that today are not consolidated. So our equity. So that is the way -- so when you consolidate RABs come up, EBITDA come up, but then net income is always the same, except for the efficiency that we are able to bring. So thank you for the exception, that is, again, M&A in water, you responded to yourself, opportunity, unfortunately because that infrastructure need -- the Italian water infrastructure need a lot of investment and need a lot of innovation, especially, I would say. So they need 2 step forward, investment and innovation. But that is what we are applying to our current assets, but that is the perimeter that we have.

We didn't see any other opportunity as of today. Hopefully, the situation may change in the future.

Next question from Ella.

Ella Walker-Hunt from Citi. I have 2 questions. My first question, we -- you've spoken a bit about balance sheet flexibility and the optionality you have there. Could you maybe rank the different levers that you have in terms of M&A, higher dividend, share buyback, how you would rank those different optionalities?

And then my second question is to do with M&A. Is there any real sizable M&A that you can do that's feasible, whether that be in Italy or outside of Italy?

Well, I thought I had already responded on the first question, we don't have any plan to dividend increase or buyback. I think the best way to employ our flexibility and to find new investment for creating growth for the company as well as creating value for our shareholders. So the flexibility that we are creating in our balance sheet is to be able to capture opportunity in the market. Imagine that if that discussion would have been done differently years ago, we would not be able -- we would not have been able to capture the 2i Rete Gas opportunity.

Thanks to the flexibility that we created over time, no buyback, dividend, 65% that is the right balance, we were able to capture the Rete Gas. I mean that's the evidence and the answer that our policy is we want to invest in the company to grow, and that brings value to our shareholders. M&A, we -- as I said before, we are looking around not only in Italy, but also in Europe. And if anything will come out, we will look carefully. The 3 lens that I discussed before are still there. Are there any sizable opportunity? As of today, we don't know. If you have any idea, please bring any idea, please bring that idea to us. We will be very happy. But that is what it is. I mean we see that there are some -- there may be in the future, some movement about opportunity in Europe, but let's see where, when and if it makes sense for us.

Next question.

Aleksandra Arsova, Equita. Some follow-up questions vis-a-vis what was already asked. So, again, maybe on financial flexibility, just a check, do you include in the current plan, or would you consider, hybrid instruments, hybrid bonds over the coming years?

The second one, again, on M&A and capital allocation, all right, the fact that you prefer to invest in M&A or rat eligible CapEx. But let's say that you don't find an opportunity that ticks all the boxes or your stringent criteria, would you consider in that case, giving back to shareholders at least this potential EUR 500 million in M&A you expect in the plan? And then one on concessions. Maybe an update if you have any update on the Rome concession. So if your current plan envisages that you are awarded or keep, let's say, the Rome concession.

And a very final one on inflation, again, -- so since we have seen a reacceleration in inflation, if you think that this could, in some way, put some pressure on your cost efficiencies targets. And on the other hand, if the current average 2% deflator you are including in your plan is a sort of floor and if maybe you expect to see ARERA coming up with a higher deflator as it was the case a couple of years ago?

First question, no, we don't -- as of today, we don't have any plan to issue any hybrid bonds. Second question is, I mean, it would be easy for me to answer to say, yes, if we have the flexibility, we'll give it back to the shareholder. I think it's much more challenging for the management to find new industrial opportunity because that creates value for the company and for the shareholder. And we have demonstrated. I mean, this question has been raised every single capital markets every single meeting with the investors. And the answer has been always the same, and it's not just a matter of answer.

Reality demonstrate that we were able to find different investment opportunities. I list them at the beginning of the presentation. At the beginning, the tenders were slowing down. It was reminded by one of your colleagues, we had like 11 or 12 M&A acquisition. Then we started to invest in energy efficiency. Then we look at the water, then Greece come up and we participate to the tender. Then there was the 2i Rete Gas opportunity. So I mean, being agile, flexible financially and operational, it's a great value in which you can take opportunity that came up. So my answer is always the same.

I prefer to allocate the flexibility in order to grow the company. That will bring also value to the shareholder as we demonstrated over the years. Regarding Roma concession, there is no news. I mean, we provided to Rome, to the Comune di Roma, all the information they needed to launch the tenders. Of course, we are ready to participate is our largest tender by far, largest concession by far. But there is no -- we don't know -- we have, I think, planned for to happen the tender in '27 and the award in '28 in our plan. Inflation may increase. I think our synergies plan is probably the best remedies to tackle the inflation because we demonstrated that we can -- reviewing our processes, our industrial processes, we are able to reduce the cost.

So we are building in our body the best resilient antivirus, if you want to call it, if the virus is the inflation. So we are ready to tackle any inflation that may come. Of course, we will see depending. We don't see -- we see the inflation has been increased by -- driven by energy costs mainly. So the energy cost will go down, we will probably experience also the inflation later to go down. Deflator is extremely linked. Remember that the step-up made by the regulator in the past is because they changed the reference of the indicator, the SPI, whatever was before.

Now it's a different one. It's fully linked to the inflation. So of course, if the inflation is going up, also the deflator is going up, they are strictly linked with only a time lag of difference. So we don't expect any further step up. If the inflation is going up, probably later on also deflator will go up. But the 2 indexes are extremely linked.

Emanuele Oggioni, Kepler Cheuvreux. And basically, everything has been already asked so far. So just a consideration on your -- you are probably the most vocal management in the sector in Italy at least on the application, the opportunity, et cetera, you are, for sure, the first mover, et cetera. So first of all, congratulations. But then the question among investors is also why -- what was the starting point? Why you are building this basically competitive advantage compared with your peers in the gas distribution, but also overall in the regulated networks. So what are the main drivers at the starting point basically?

Very good question, honestly, is -- and the reason goes back in the past. I think that in order to get the most of AI today, you need to have 2 things: a truly digital platform and a very good quality of data. If you don't have these 2, well, you can talk about AI. I've been in several conference where everybody were talking AI, everybody were talking use of AI. But then when you dig a little bit from the surface, you find in below, there is very little, I agree with you. The fact that we are where we are today, and we are able to leverage the AI in such a massive way is because go back what we have done.

We went to cloud, public cloud in 2018. So we are talking about 8 years ago. Today, it's no brain to go to cloud. 8 years ago was a vision. And since then, we built our IT, let me say, governance based on leveraging the cloud availability -- the reason why we were able to merge in 90 days is thanks to our IT approach and the cloud availability.

And to the fact that we -- since then, we clean our application map and more important, we clean the data every single year, right? I always use the imagination to say we put the data several times, our data several times in a washing machine and the data every time came more cleaner than before. And in the meantime, the digitization brought us billions of data. So now we have a huge data lake Data inside the data lake has a very good quality, is clean, and we have a digital approach that is spread, is a part of the culture, is spread throughout the company, and is part of the culture of the company. And that's the reason why we are ready to take advantage of AI because it's the natural frontier for us because we have already done all the digital part.

So we are there, and we are able to make the same approach. One clear example, digital factory. Digital factory has been established back 8 years ago in 2018, still working, going through improving the processes, making the processes simple, the application, digital, everything. Now we are using the same agile approach for developing AI application, AI agent. we are using, we call not digital, digital AI room. But instead of the discipline that we imposed to us on the digital room 4 months to deliver an application is the same discipline that we are using now to deliver an Agent AI with a big difference that is not going to be 4 months anymore.

It's going to be 4 weeks. So we are continuously disciplined in developing new technology, and that is the great advantage. That's the reason why AI is our backbone. That is the reason why we are building AI on a strong foundation that is the digital platform that we develop as well as the data, the good quality of the data. Those are the 2 pillars. If you don't have them, okay? You do some POC, some pilot, something, you do the showcase. But at the end of the day, you are not able to really change the operational behavior. AI will change, is changing our operational behavior on a day-by-day basis.

Is there other questions. Yes? No? Maybe operator, are there questions from the conference call for those that.

At the moment, we don't have any questions from the conference call.

So everyone, last question. So I guess -- thank you all.

Thank you very much for your participation.

The analysts, of course, as IR team, we are available. And thank you, everyone, for participating.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Italgas First Quarter 2026 Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Ms. Anna Maria Scaglia, Head of Investor Relations of Italgas. Please go ahead, madam.

Hello. Good afternoon to everyone, and thank you for joining us. I'm here with our CEO, Paolo Gallo; and our CFO, Gianfranco Amoroso, who will be running this presentation. As usual, a Q&A section will follow the presentation. I'll now leave the floor to our CEO, Paolo Gallo.

Good afternoon. Sorry for being slightly late, but we were waiting a few analysts and investors to be connected. And we are here to present to you the just approved 2026 first quarter results. And let me say that very excited to share the numbers. I would like just to recall you that it is the 37th quarter of continuous growth. So we started to grow, it was the first quarter of 2017. We are in 2026. We are still continuously growing. And I think that's an incredible achievement.

Solid result in the first quarter. And of course, you can understand that those are coming through the consolidation of 2i Rete Gas and even more important through the level of synergies that we have already achieved in the first quarter at a speed that I would probably define a better speed than what we expected when we started this journey.

Asset disposal, as of today, we completed all of them. In the first quarter, you only see a major portion, but not all because some were completed just the beginning of May. So at the end of the day, we sold 247,000 redelivery points with a consideration of EUR 253 million, less than EUR 200 million were consolidated in the first quarter results. The premium at which we sold those assets were 16%.

Regarding -- as I already said, regarding integration, we delivered a number that when we started the journey was not expected so high. We are nearly close to 37% of the total target, and we have accrued this number in the first 12 months of this journey. At the same time, we have used a very -- and Gianfranco will explain you later, a very short window in the market, and we were able to raise a bond of EUR 750 million with a very good condition as well as we signed a revolving credit facility for EUR 900 million for credit rating purpose. Finally, we will show you in a moment a brilliant 2026 guidance.

Let me move to the first quarter result. We skip the page, and we are looking at the results. First of all, let me say that we are comparing adjusted number. Let me say that in 2026, the adjustment has been extremely limited only to cost, not to revenues, while for the reason that you have already know in '25, we had several adjustments at revenue level as well as cost level.

So the revenues were up -- nearly up by 44% versus last year. Main and main contribution by far was the gas distribution activity, mainly driven by the consolidation of 2i Rete Gas as well as the RAB growth both in Italy and Greece. Thanks to the synergy, the increase of EBITDA passed the 50%. We are nearly to close to 53% year-on-year. And in fact, our EBITDA margin nearly reached 80% in the first quarter '26, reflecting the contribution of everything, in particular, the efficiency and the synergies.

Below EBITDA performance remained very strong, adjusted EBIT is EUR 341 million, up to 51.2% if we look at the first quarter '25 and the adjusted net profit was nearly at EUR 190 million. And this increase that is lower than 50% is driven by the IRAP -- the increase of IRAP in the tax line.

Regarding capital allocation, CapEx, we spent in the first quarter nearly EUR 350 million, 2x what we spent last year. Remember that in the first quarter '25, we didn't have the contribution of 2i Rete Gas. And another big element is the level of operating cash flow that is a record, and it is a combination of the operating cash flow itself we will see in details. On top of that, we had the disposal. The result has been that the net debt has dropped by more than EUR 500 million in respect to the end of the year 2025.

Let's look at the synergies that is on Page 4. On the left side of the page, we show which are the new initiatives that we started in the first quarter '26 as well as the initiatives that were activated in 2025 that will continue to generate savings also during the first quarter of '26. I think reaching nearly 37% of the overall synergies, the target that we set for 2031, in 1 year, 12 months only, I think it's an incredible achievement. And of course, we are fully on track to reach the 50% target that we said we should reach by the end of the year. And I think the speed is fundamental because we are accruing saving, and therefore, we are making our income statement and the net profit better than expected.

Looking at what is driving the synergies is the biggest contributor is the ICT consolidation. You remember that last year, we moved all the 2i Rete Gas data into our cloud ecosystem using the same application map as well as we fully reorganized the operational activity at the field level. We were able also to complete the reorganization at the corporate level. And of course, we are trying to get everything possible in terms of efficiency from that operation. We are talking about emergency call center. We are talking about laboratory testing. Some of them as well as commercial request management, those activity previously in 2i Rete Gas were performed by a third party, today have been fully performed by our personnel.

On procurement, we will continue -- we are continuing to renegotiate the contracts with third party in order to leverage our scale and our size in order to get economy of scale.

New initiatives are coming up in 2026. One of them, we completed the replacement of the traditional meters that were left by 2i Rete Gas with smart ones, especially with our Nimbus. We complete the migration of the legacy 2i Rete Gas meters into Italgas remote management ecosystem. We are continuing to rationalize our offices. We have already closed 22 sites since July 1 as well as we continue to renegotiate procurement contracts.

Finally, and probably the most promising one is all the activity that we are performing on AI. It's an incredible accelerator of efficiency. We discovered that our ecosystem made of digital platform and reliable data is the best one in which you can perform AI at massive scale with the creation of AI agent. We have already created several of them. They are intervening in the scheduling of the activities, in the meter reading, in the IT ticket management, and this will continue to happen also in the coming months.

Let me just jump after this synergy into the guidance, just to give you the flavor how the 2026 looks like. We have introduced for the first time the net profit guidance. If you remember, we have never given that, but I think considering the brilliant guidance, we wanted to show all the elements of the guidance.

Regarding the adjusted EBITDA, we expect it to have a range between EUR 2.1 billion, EUR 2.15 billion. That is a double-digit increase compared to the closing number of 2025, it's 5. Of course, in 2026, we have 3 months more of 2i Rete Gas. But even more important, we are extracting a lot of synergies. And in fact, in our guidance, we forecast that we are going to achieve at least 50% of the synergies of the overall target that we have promised for 2031.

Below the EBITDA, the adjusted EBIT is expected to reach a range between EUR 1.34 billion to EUR 1.37 billion and an adjusted net profit between EUR 740 million and EUR 760 million, demonstrating again our ability to create value for all our shareholders.

Regarding the investment, target is EUR 1.5 billion, more or less, mainly driven by -- the additional in respect of 2025 is driven by the upgrading and the transformation into digital equipment of the legacy of 2i Rete Gas network. It's not going to be end in '26 as already presented, but '26 is going to be an important year for the upgrade of the gas network that we inherited from 2i Rete Gas.

Finally, thanks to the strong cash flow generation, we are able to keep the net debt more or less on the same level of the end of last year, considering also the dividend. So in other terms, the cash flow generated in '26 will be able to pay in full the CapEx, even though they have been increasing significantly in respect of last year as well as the dividends that we have already committed to pay to our shareholders.

Let me take a more detailed look about what we performed in the first quarter of 2026. In terms of revenues, as I said, in '26, there is no adjustment at all. So we are comparing reported numbers with the adjusted one in '25. We had several adjustments in -- sorry, '25, yes, we had several adjustments in '25. In the comparison -- right comparison, the overall revenue increased by 44%, driven, as you can see by the 2i Rete Gas contribution as well as regulated gas distribution with a negative contribution that is coming from some water activity and the energy efficiency. Let me say that we have seen an increase of RAB either in Italy and Greece, and that contributed to the delta -- the positive delta of the regulated gas distribution.

If we move to the cost, that is probably the most interesting one, you can see the operating cost in the quarter increased by 18.3%, significantly below -- well below the growth in revenues, thanks to the synergies. In a like-for-like comparison, the drop of the cost is EUR 56.4 million. That represents nearly 30% on a like-for-like basis. This is an incredible achievement. That is the reason why the synergies have been accelerated so much. The drop in the cost in the water and the ESCo are linked to the drop in the revenues that I described before.

If you look at the number of synergies that we were able to achieve, as I said before, we reached overall nearly 37% of the total. We confirm that by year-end, we should reach maybe a little bit and pass a little bit the 50% of the total.

Let me look at the EBITDA, then I will pass the floor to Gianfranco to make a final comment on the EBITDA. What is important to underline is the increase of the margin of the EBITDA by 20 bps (sic) [ 200 bps ]. In fact, we move from -- let me say, we increased significantly the EBITDA margin, that is thanks, and if you remember, one of the comments that we have made at the time of acquisition of 2i Rete Gas is that 2i Rete Gas had a lower EBITDA margin contribution than Italgas. That is a clear demonstration of our ability to immediately align the EBITDA margin, not only to our previous one, but even to increase it, thanks to the synergies. And I think that is probably the most effective way to represent our ability to integrate 2i Rete Gas and to be efficient immediately in all our operation.

Let me pass the word and the floor to Gianfranco for the remaining part of the presentation.

Thank you. We are now on the EBIT evolution. Adjusted EBIT exceeded EUR 340 million with a growth of more than 51%. This growth is largely driven by the EBITDA increase, has been partially offset by higher D&A of EUR 66 million. This EUR 66 million increase is mainly due to the consolidation of 2i Rete Gas, of course, and the carryover effect of the investment done in the previous 12 months.

On the adjusted net profit, we have a remarkable growth of 42.8%, mainly driven by 2i Rete Gas acquisition contribution and by the solid operating performance. So we have a higher EBIT contribution for EUR 115 million that has been partially offset by an increase of adjusted net financial expenses that now include the cost of 2i Rete Gas debt that has been consolidated starting from 1st of April and the interest charge related to the full impact in the quarter of the dual tranche bond issued in March '25.

Then we have, going down to the line, EUR 1 million of higher contribution from equity investments and remarkable a higher adjusted tax rate of EUR 30 million due to the higher taxable income and the IRAP impact, temporary and extraordinary impact, which led to a tax rate of 29.7%.

If we move to the CapEx side, I mean, another remarkable achievement. We doubled the CapEx in respect of the first quarter '25. Even though you know that the size and the RAB of 2i Rete Gas is not -- was not as big as the one in Italgas. And you can see that the doubling of the investment is everywhere, is in the development and repurposing of the network as well, and that is even more important from the digitization. You should consider that we have fully digitized the Italgas legacy one, we -- so the majority of the EUR 74 million are focused on the 2i Rete Gas legacy. That is important in order to accelerate all the efficiency that we are talking before and especially the remote and control management that we are able to do it on the network. And then we have also other investment that nearly tripled. Of course, the amount is limited, but includes ICT and real estate intervention.

Remarkable, we were able to lay nearly 300 kilometers of network and nearly, let's say, 40% only in Greece. So again, we are expanding our network significantly also in Greece, 120 kilometers were the new pipelines we were able to lay down in a quarter in Greece.

Before we will discuss about the cash flow, let me just give a short view about our performance in terms of energy efficiency and CO2 emission. On the energy efficiency, as you know, we continue and we are applying also that to the new equipment that we inherited from 2i Rete Gas, we continue to make action in order to reduce the energy consumption. In this period of the year is particularly important considering the price of the energy as well as the price of the gas. So net energy consumption on a like-for-like basis decreased by nearly 20%, 18.3% year after year. The reason of such reduction is improved -- the improvement we were able to bring to the facility of the group. We replaced -- we continue to replace natural gas preheating boilers. We install on all our preheating boilers optimization system. We fully digitize them, so we are able to control on a real-time basis the real consumption.

Scope 2 and -- Scope 1 and Scope 2 emissions were also reduced, mainly driven by the energy consumption from fossil fuel. We have seen an increase in the fugitive emission by 3.3%, but because we significantly increased the number of kilometers of network that we were inspecting during the quarter.

If we look at the gas leakage rate, that remains very low, not only remains very low, but is declining in respect of last year. That means that we expect that by year-end, the overall gas leakage rate will even decrease in respect of the previous year.

Moving to the cash flow. First, we reported a clear record high cash flow from operation of EUR 643 million, driven by solid operating financial performance and a favorable and positive net working -- net working capital evolution. The increase in net working capital of EUR 277 million is mainly due to a positive billing seasonality, also including, of course, the perimeter of 2i Rete Gas for the first time, higher tax payable and other positive impacts. The operating cash flow allowed us to cover the net cash investment in the period of EUR 305 million, at the same time, generating more than EUR 330 million of free cash flow before M&A impact.

Going down, we also reported in the quarter almost EUR 200 million of positive contribution from the mandatory disposals, of which EUR 90 million represents an advanced payment relating to a disposal of activity transferred on the 1st of April.

Overall, as of today, all the disposal linked to the mandatory antitrust ruling have been completed and the assets transferred. All the impacts that we have explained are the basis for the drop in net debt by more than EUR 500 million in the quarter.

Going to the debt structure and funding. Due to the positive cash flow evolution, we have closed the first quarter with a net debt of EUR 10.35 billion, including IFRS 16 or, let's say, EUR 10.2 billion excluding IFRS 16. Our financial structure remains, as you can see, very solid, being composed for 80% of fixed rate instruments and with an average cost of our gross debt around 2.1%.

Let me now comment 2 important transactions that we have completed in April. Well, in just 2 days, between 8 and 9 of April, we were able to take advantage of liquidity and rates positive window in the market, issuing EUR 750 million bond with a maturity of 6 years to support our prefunding needs. We also subscribed a new EUR 900 million sustainability-linked revolving facility with a tenure of 5 years, replacing an existing one signed in 2024 at support of our rating. These 2 transactions are in line with our strategy to optimize our debt structure and support our rating. Let me add that with these transactions, we have now addressed the majority of our financing needs for the year.

Thank you. So we are now open for the Q&A section, Operator.

[Operator Instructions] The first question is from Julius Nickelsen, Bank of America.

I have two, and the first one is on synergies. So obviously, a massive step-up this quarter, and you said that the guidance just a little bit above 50% of the total amount. But should we still see this as just front-loading the total amount? Or did you also identify new sources where you can extract synergies from now that since we last spoke?

And then the second one is on the guidance. Does the guidance include any additional benefit from tenders or the tenders that are unfolding this year more earnings impact for 2027?

On the synergies, you are right. It's -- the speed, as I said, is the speed at which we are achieving them, that is good because that is going to be -- we are going to accumulate the number throughout the year. What we are doing for which we are not able to answer yet is that in the process of elaborating the new strategic plan, we are reviewing also all the initiatives. I would say probably most -- especially in the AI domain, and please be present at the end of June, you may find some surprise. So we will -- we don't know yet, but considering the acceleration that we are able to implement on the AI, we may see some adjustment, but we don't know yet.

It's not going to be impacted in 2026. So it will be probably in the years to come. But let me tell you that the speed at which we are able to implement AI agent is something that surprised us in a significant way. I mean the technology is so advanced that we are able to implement the agentic AI in a couple of weeks' time. That is absolutely surprising.

On the guidance. Guidance in terms of -- does not include, let me say, the effect of the new tenders that will be awarded in this year because even if they will be awarded, we see that to be awarded in the -- except the ones that have been already awarded, the new ones will be awarded to -- we expect to us by year-end. So we don't see significant impact on the guidance. Guidance, I should remind you, it's EBITDA, EBIT, net profit and then technical CapEx and cash flow.

Next question is from James Brand, Deutsche Bank.

Interesting comments from you on AI just now, but I was going to ask you about a couple of other topics. So first was whether you could give an update on the tenders because I think these have been kind of coming in ahead of your expectations. So kind of what have you seen so far? And what are your expectations for the remainder of the year?

And then secondly, on ROS, has there been any update in terms of when we will hear something from the regulator on ROS regulation?

Thank you on the tenders. Let me say the current situation is since the beginning of the year, 4 have been awarded to us. I can mention to you Torino 5, Biella, Como 3 and Enna. 2 others that are Cuneo 1, Cuneo 2 are doing -- let me say, they have already closed the evaluation and they are in the process to be awarded, hopefully, to us. I mean, we have very, very high confidence that we are -- awarded to us, considering the numbers that we put on the table.

And then there are another 1, 2, 3, 4, 5, 6, 7, 6 and 7, let's say, 6, another 6 that we expect that the offer -- well, you expect the offer will be submitted before and immediately after summertime. Some of them we expect it to be awarded by year-end. So let me just recap for you. 6, 4 have been awarded, 2 are close to be awarded. Another 6, we expect the offer will be submitted before summer, and immediately after summer, let's say, out of the 6, another 4 may be awarded by year-end. It is a fair picture.

On the ROS, I have -- on the ROS, it's a very easy question. There is no news. We said several times in the meetings during the conference call that we expect considering that the ROS should start January 1, '28, first consultation document, we expect to be issued by in the second half last third -- let's say, last quarter of this year, so '26. We don't expect any consultation document earlier than that because it's still a minimum 15, 18 months ahead of the starting time. So we don't have any news on that, except saying that we expect the issuance of the first consultation document in the last quarter of '26.

The next question is from Javier Suarez, Mediobanca.

Several questions from me as well. The first one is on the efficiency and synergy extraction on Slide #4. It's remarkable the level of synergy that has been achieved during the first quarter 2026 and the target of the company of achieving 50% of the target by 2031 and just by the end of 2026. So without unveiling what you are going to say in the next business plan update? Is it fair to say that you are seeing a significant acceleration in that synergies extraction that is just coming from the ability of the company to implement efficiencies and basic standards of parent company into recently acquired assets and that we should see a new leg of synergies extraction from AI?

I see in the bar that you are showing in Slide #4 that there is some contribution from AI, but that dark blue part should be significantly increased and probably accelerated because you see -- and I think that you mentioned that as AI as an incredible accelerator of efficiencies. Is that a fair statement, more contribution from AI and probably earlier collection of those synergies. That would be the first question.

And then the second question, I was interesting to see where the company is putting the operations in Greece close to the Italian standard. Where do you are in terms of relative performance of Greece versus the Italian operations and where you are in the integration of putting these activities up to the Italian standard? Also, I'm interested in the profitability of your ESCo activities and your expectations for EBITDA margin in 2026.

And the final question is a question of detail. If you can elaborate on one-offs that are included in your first quarter numbers or 2026 guidance related to capital gains from the antitrust disposal.

Sorry, Javier, can you repeat the last question because I missed that.

Yes. The last question is that if you are including any capital gain from the disposal, the anti-trust disposal in your numbers?

Got it. Got it. Okay. Let me start -- well, let me start with the efficiency and synergy. You made a long description. I will make the long story short. You are asking me quantity and time, if I may correct, and focusing particularly on AI. First of all, let me say, we are best in the market. So we are able to deliver this number because we are the best.

And let me say this as a statement that I wanted to explain you why. I think that the result that we are achieving right now is thanks to the detailed work that we performed last year when we started even earlier than the closing time, and we continue to perform throughout the summer to identify line by line, activities by activities, all the possible area of synergies were identified what we were able to identify, what we have to do, when and what was the expectation in terms of synergies. So now we are, let me say, collecting and we are taking advantage of this detailed work because now we know exactly how to do it. We have a monitoring system that is going on a single month, every month, we are checking the progress, and that is the result.

As I told you, the speed is -- we are running at a higher speed. In the meantime, in parallel, we are reviewing our ambition in terms of synergies. If we are able to identify new topics, new idea, and I think AI may present some good news considering the application that I mentioned to you before, the result that we were able to put in place. But for this, we need -- we don't know -- honestly, we don't know the numbers yet. We will discover, and we will tell you during our strategic presentation.

Greece. Greece is moving towards our margin. We are above 70% in terms of EBITDA margin. So we are moving in the direction. It will never be able to catch up with the size of Italy, but still being slightly above 70% and there's still margin to improve, I think it's already a very nice and good achievement.

On the ESCo, you know that all the situation of the energy efficiency is quite a tough market because the level of, let me say, support -- financial support is limited. So we do what is really -- we are more focusing on the industry today than not on the, let me call it, retail considering the large condominium. We are focusing on the industry because there is no -- as you know, there is no incentive in order to make more efficient the household. But still, we are focusing on with a target to remain in the range of 18%, 20% margin because we -- even if we prefer to reduce our turnover, but still maintaining the margin and building a nice pipeline of industry customer that can, even through, let me say, investment made by us in order to keep this marginality at the same level as we experienced in the past.

So in terms of, let me say, marginality, that is our target. We'll continue to look at that. We prefer to lose business and not losing margin. That has been the, let me say, the direction since the beginning of the ESCo, we will continue in that direction.

On the capital gain, we have accounted in the first 3 months, EUR 8 million of capital gain of the disposal. That is the amount because part of the capital gain has been used to reduce the goodwill -- the overall goodwill of the transaction -- of the goodwill that came out from the transaction, the acquisition of 2i Rete Gas. So part of the -- so the capital gain part has been allocated to reduce the goodwill and part has been calculated on capital gain included in the -- in our profit and loss account, the amount is EUR 8 million, the one included.

[Operator Instructions] The next question is from Bartek Kubicki, Bernstein.

Congratulations on the synergies. Just regarding this, my question would be, what do you think is the end game for the regulator and how they will treat your outperformance regarding the allowed OpEx? I mean when do you think this could be -- the allowed OpEx could be reset? Is it 2028? Is it later? Is it earlier? Do you think there could be -- what will be the basis for calculating the allowed OpEx? Is it going to be 2026 year? Or is it going to be something different? So net-net, how do you think your allowed OpEx will evolve in the future given the fact that you have those significant synergies which you are recording right now? That's question number one.

And question number two, if we look at those 4 items, you said they were awarded at the beginning of the year. I just wonder if, a, there is any pending court case regarding those? As we remember in the past, there used to be court cases for awarded items. And secondly, if we think about those items and potential incremental CapEx on the fact that you have been awarded those items, what do you think, what numbers are we talking about? What could be the potential CapEx increase on those 4 items versus the current status where the items were not awarded?

I think it's not the first time that you are asking me because I recognize you the voice. It's not the first time that you are asking me about when we are going to give back the synergies. I want to, first of all, to make a general statement because that is important. Otherwise, we will continue to discuss the subject. One of the rule of the game in our industry is, sooner or later, our efficiency should be given back to the system, and I'm very glad that it's going to be like that. But I have demonstrated to you in the last 10 years, so I mean, the track record is significant that even though we have been given back the efficiency, we were able to continue to grow. And I would like to remind you that we are on the 37th quarter continuously grow, and that is mainly thanks to the cost efficiency that we are able to achieve.

Having said so, I don't have the answer. The reason is that we will keep the efficiency in '26. We will keep the efficiency in '27 because the regulation is such, we know that is the regulation. And so I'm happy that the speed at which we are achieving is increasing. We don't know what is going to happen in '28. ROS will be a different regulatory framework. So the regulator will consider the '26, '27, '25 as a cost reference. Honestly, I don't know because we don't know the details about the ROS. But I have to tell you, the rules of the -- one of the rule of this industry is that the synergies sooner or later should be given back. And I'm happy that it is right that because our focus is to continue to find a way to reduce the cost and to be more efficient. The fact that we have to give back that, that's normal. That is the game. So we know. So it's nothing surprising.

Let me say that the -- you asked me about the 4 items. The 4 items will bring an incremental RAB of above -- slightly above EUR 100 million. And we expect -- well, we don't expect in '26 to have significant additional CapEx. We expect to have additional CapEx in '27, I will probably say estimated in the range of EUR 50 million to EUR 70 million about these 4 items. But we will give you a better preview of the strategic plan when we will consider, not only the 4 awarded, in the meantime, we expect also the other 2 to be awarded, and we will check the progress on the other 6.

So at the strategic plan, one of the, let's say, probably the first time in the 10 years plan that we have given to you in the 10 -- not 10 years, 10 plans that we have given to you is that the first time -- for the first time, we will see an acceleration of the tender and not a delay. So I think it is worthwhile to postpone the discussion of the strategic plan in which you will have a full picture about what the tender will look like in terms of acquisition and what the tender will look like in terms of additional expenditure throughout the plan?

The next question is from Francesco Sala, Banca Akros.

Just two questions. The first one is, I wonder whether you can share with us your view on the risk-free parameter for the WACC calculation, especially about the inclusion of France and whether you have discussions with the regulator about this topic?

And the second one, if you can give us a sense of the pace of the rollout of the new meters in the upcoming quarters?

Okay. Regarding the first question is, I think that it is raised already last year because there was a discussion about France to be included in the comparison in order to calculate the WACC. I should remind you that the decision of the WACC at the end of '25 happened in the period in which France was downgraded, but the downgraded happened outside of the reference period. It starts, as you know, October until September. So it was downgraded in -- after September '25. So correctly, the regulator included because the reference period was October '24, September '25. In that period, France was a AA country.

Now France is not anymore a AA country. So for me, the discussion about to be included or not is not a discussion. Will -- should not be included because it's not anymore a AA country. And we are in a period of the observation period from October '25 until September '26 in which France is not a AA country.

In terms of the new smart meters, our Nimbus, we are talking about a significant number that has been already installed. We are close to 200,000 Nimbus installed, close, not yet there, but the number looks better, 200,000. But more than that, more than the numbers is the performance is absolutely outstanding in respect of the -- any of the other. I mean we were able to design, to develop together with some of the suppliers, the best ever smart meter in terms of communication, in terms of the ability to close the smart meter remotely, in terms of accuracy of the reading, in terms of cybersecurity, I mean, best ever.

So we are extremely pleased and this number will significantly increase throughout 2026. We have already placed order for more than 0.5 million, and we are going to place more order to other supplier. And the Nimbus will soon see -- will soon be seen also in Greece. So it's another -- let me say, it's another generation of smart meters in respect of the existing one.

[Operator Instructions] Ms. Scaglia, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

I think I would like to thank you, everybody, for attending this meeting, and I would like to thank you also for the fact that you have raised so many questions, even if you had a limited time to review the numbers. We were late in providing the numbers. I'm sorry for that. Next time, we will do it. Thank you to all. Have a good afternoon.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephone.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Italgas Full Year 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Anna Maria Scaglia, Head of Investor Relations of Italgas. Please go ahead, madam.

Hi. Good afternoon, and good morning to everyone, and thank you for joining us. I'm here with our CEO, Paolo Gallo; and our CFO, Gianfranco Amoroso, who will be running us through the presentation. I now pass the floor to our CEO.

Good afternoon, everyone. It's truly a pleasure today to present to you the result of a historical year for Italgas. In fact, if -- and we are on Page 2. If you look what happened during 2025, you can understand that there has been an incredible year for the group, strategy implementation, execution, value creation in particular for our shareholders. Today, we will go through the main achievement that just to recall the major achievement we achieved in 2025.

Let me start just recalling that on the April 1, we closed the acquisition of 2i Rete Gas well ahead of schedule in only 6 months from signing, we completed one of the most strategic transaction in the European gas industry, positioning Italgas as the largest operator in Italy, we were already the largest but also now in Europe. In June, we successfully launched and executed a EUR 1.02 billion capital increase with 100% finance subscription. This allowed us to strengthen our financial structure immediately few months after the acquisition.

A month later, on July 1, we completed the integration of 2i Rete Gas into Italgas Reti from organizational redesign to IT migration without any significant problem from day 1, thanks to the extraordinary effort of all our people, both from Italgas and 2i Rete Gas. As you know, the antitrust oblige us to sell a number of redelivery points more than 600,000. We completed last year as of October, we received all the offer. The offer were only valid for less than 250 redelivery point. And as of today, so March 2, the first package has been already closed, generating nearly EUR 110 million in terms of revenues.

Finally, in October last year, we presented a new strategic plan, which reflect not only our enlarged perimeter but also our record high investment and a clear path in numbers regarding synergies and efficiency. In short, 2025 has been a year in which we reshaped completely our group to capture the full potential of the energy transition as well as digital transformation and consolidated our leadership at the European level.

If we move on just to give you the idea of the size of the group today, coupled with unparalleled expertise and innovation capability. We manage nearly 160,000 kilometers of gas network in Italy and in Greece with nearly 13 million customers. We also serve more than 6.3 million directly and indirectly customer in the water sector. This makes our infrastructure footprint, the largest by redelivery point and by far, the most advanced in Europe.

We operate more than 4,000 concession, reflecting our position, unique position in the different territories where we operate. Our regulated asset base combined with the -- combining gas distribution and water activity has reached nearly EUR 16 billion. And finally, the scale is not only about size, but it's about capability and technology. And this reflects the strength of our people, 6,500 that now works together as a one group bringing the best of both Italgas and legacy organization into a unified innovation-driven platform.

Let's move now into the Slide #4 that shows the results. Our operating performance was very strong in '25, benefiting from the consolidation, mainly benefiting from the consolidation of 2i Rete Gas starting from April 1. As you remember, last October, we raised our 2025 guidance, even if we raised today, we are showing our results that are even better than the expected numbers that we showed to you in October at EBITDA, EBIT and net debt level.

Gas Distribution revenue in Italy grew thanks to the updated OpEx recovering previous GAAP, benefiting from RAB growth, thanks to the investment we made, and we will show you in a moment, the level of investment that we reached in 2025. Thanks to these 2 elements, we were able to offset even more the impact of the lower allowed WACC. To mention Greece and ESCo because both of them show a good progress during the period.

We continue to deliver an OpEx reduction, as you can see, benefiting from the first contribution of the initial synergies from 2i Rete Gas integration. I think one number that is extremely significant is the level of synergies that we achieved in 2025 compared to 2023 cost 14% of the overall synergies that we target were already achieved in 2025, only in 9 months, not even on the full year.

And in fact, if you look at the EBITDA margin, even in an enlarged perimeter, we were able to keep the same level of EBITDA margin that we experienced last year. EBIT recorded a robust nearly 14% increase, passing the EUR 1.2 billion. Net profit landed slightly above EUR 675 million, a record by level for the group.

On the debt side, the net financial debt increased significantly as a result of the acquisition of 2i Rete Gas, consolidation of their debt, partially offset by the capital increase. Nevertheless, we were able to be below what we expected and what we announced during the October guidance. The result of that is that we are going to propose at the next general assembly, a dividend per share equal to EUR 0.432, an increase of 13.3% compared to the DPS we paid in 2024.

Let me just take a look that is on the next page at the efficiency to give you more color and flavor about what we have already achieved in 2025, in the 9 months of 2025. First of all, the integration is fully in line with our plan. It's moving very fast. And we are fully confident that the target of EUR 250 million will be achieved. And in fact, in 9 months of 2025, we were able already to capture EUR 35 million of synergy that represents, as I said before, 14% of the overall target. This is a very strong and fast start and that's the reason why we are fully confident that the overall target will be reached in line and according to the profile time that we have showed to you last October.

Let me just give you some flavor, especially about the last progress -- the progress we made in the last quarter. We completed the replacement. If you remember, we mentioned that 2i Rete Gas has already some in place some traditional meters. We completed the replacement of all the 2i Rete Gas traditional meter. We started to replace some of the gas reduction station with new digital ones, 50 former were already replaced. We bring inside, so we make a decision to bring inside all the emergency response activity as well as the laboratory testing activity for instrument calibration that 2i Rete Gas at the time was given to a third party.

We renegotiated a number -- a significant number of third-party contracts in order to align all the KPIs, including the economic KPI, to our current contract, securing -- in that way, securing better terms and the efficiency. As far as the corporate concerned, we -- in the 9 months of 2025, we were able to close 24 offices. Four of them were closed in the last quarter of '25 as well as we were able to reduce the car fleet, optimizing the use of the cars for the operation. We renegotiated insurance policy, we renegotiated bank guarantee.

But last but not least, we started to introduce digital and AI algorithm in order to increase our productivity. So scheduling tools was already impacted by AI algorithm that we develop in our digital factory. We introduced generative AI solution to automate meter reading workflow, and we launched a number of AI agents to support IT ticketing issue resolution. So even in the first 9 months, we were able to achieve a very ambitious target in terms of synergies as well as we were able already to start significantly AI implementation in our processes.

And it is just the beginning. 2026, as you can see by the bar chart, is going to be challenging, but is going to be extremely positive in terms of synergies that will be achieved and the bar chart reflects our real numbers.

Let me move to still some framework regulatory updates, what happened in 2025. I think it's important to recall we have already described in our conference call, but I want just to summarize them. First of all, in March, ARERA recovered the regulatory gaps for the period 2025, updating the allowed OpEx and X-factor following the ruling of the Council of State. In addition, the RAB deflator, if you remember, like we call it, was aligned to a different Italian indicator that is more coherent and predictable over the years.

Another important element was the decision to extend the current regulatory period until the end of '27 while X-factor set at 0 for both '26 and '27, recognize that the previous efficiency were already given back in full to the end user. Extension was part of the ruling confirming the proposal to introduce the ROSS or if you want to call it, for gas distribution in '28.

Finally, ARERA confirmed the allowed WACC for 2026 at 5.9% as the trigger mechanism was not activated. I think what is important to highlight that is common to all of these events is that someone may say, oh, it's favorable to the gas distribution sector. It is not true at all. That is the resulting of a strict and diligent application of the current regulation while the decision to postpone introduction of ROSS in gas DSO is totally understandable given the complexity and the peculiarity of the gas distribution sector.

Just to complete the overview, I would like to talk about the Budget Law and the Energy Bill Decree and what is impacting -- how it is impacting Italgas. Regarding the first one, the Budget Law that was issued at the beginning of 2026. I think it's extremely important the measure regarding biomethane. First of all, the Budget Law introduced mandatory grid connection for the new biomethane plants, established new reverse flow regulation and even more important, revised the cost sharing between developers or producer of biomethane and the system we switch from an 80-20 to 30-70 in case of connection costs and to 0-100 in terms of metering. So now the system is bearing the 70% of connection cost, 100% of the metering cost and that will help, and we have already seen in terms of number of requests arriving, will help the biomethane development.

And that is important, considering that biomethane is a green gas, is locally produced and it's going to be a significant part of the solution of the energy transition. This measure represents a clear signal of the renewed commitment by the Italian government to biomethane because, as I said, biomethane is extremely important in the energy transition future.

The energy decree includes measure aimed to reduce gas bill for industrial user, limiting gas price volatility and narrowing the spread between the Italian PSV hub and the Northern European TTF. At the same time, introduced a temporary 2% increase for 2026 and '27 of the IRAP tax rate for energy companies. From an Italgas perspective, while temporary tax increases are limited and clearly the fine time horizon, then decree either Budget Law and Energy Bills Decree ultimately reinforce the role of gas infrastructure in the transition accelerates biomethane development and support affordability for both industrial and domestic use.

Now is the time to get into more details about the number of 2025. So I will start from the revenues. As you all know, 2i Rete Gas was consolidated for 9 months, and the full integration with Italgas Reti started on July 1. And in fact, from July 1, it is practically impossible to split the contribution of 2i Rete Gas and the previous Italgas Reti in terms of revenues, but even more in terms of cost and all the other lines. So the representation just put together the contribution of 2i Rete Gas that is the main contributor, but also the growth of the gas distribution, the legacy, what we call the legacy of Italgas Reti and the Greece.

So if we look at the overall results, revenues were up nearly by 40% in the period and the regulated gas distribution business in Italy and Greece increased by more than EUR 700 million, thanks to the 2i Rete Gas mainly, but also the investment we made last year in -- especially in -- on the -- we will see the investment in a moment and Greece. And then all the other components that I already mentioned about revaluation factor and allowed OpEx. This effect combined compensate more than the decline in regulatory WACC that represent an impact in respect of 2024 of nearly EUR 52 million.

What is also important to notice is the 2025 also mark a turnaround year for the ESCo because the ESCo contributed to the majority of EUR 48 million. That is the last column that you see on the graph. So the 2025 was also for the ESCo a significant year in respect of 2024. If I look at the operating cost, the incremental cost in respect of last year is mainly driven by -- is explained by majority by the 2i Rete Gas and of course, the second line is the ESCo. We recorded a significant increase in the revenue. We also recorded an increase on the cost, but the margin it is significant because we passed the 15% EBITDA margin on the ESCo. On a like-for-like basis, operating costs declined by more than 5% equal to more than EUR 30 million only in the year 2024, thanks to the -- our focus on the operational efficiency but mainly driven by the early integration of 2i Rete Gas and the early integration synergies ramp up that I described before, and there has been -- that have seen an acceleration, especially in the last 2 quarters of the year.

Coming now to EBITDA. I'm on Slide 11. Adjusted EBITDA, you see reports an increase by almost 40%. The figure now reached EUR 1.883 billion, with a strong contribution coming from all the business. Having said that, gas distribution in Italy and Greece remains the main growth driver, supported by the consolidation of the new perimeter of 2i Rete Gas that has been added while the recovery of the energy efficiency segment contributed to strengthen the overall performance.

On top of that, EBITDA margin remained broadly unchanged despite the change in mix and the lower WACC as described before, supported by strong operational execution and efficiency delivery.

Now on Slide 12, we have adjusted EBIT. You see growth of about 46.9% compared to the previous year. And now we can have an EBIT that reached for the first time in the group history the level -- the record level of EUR 1.2 billion, largely driven by the EBITDA increase, only partially offset by higher D&A of about EUR 147 million. Regarding the D&A, the increase of D&A is mainly related to the consolidation of 2i Rete Gas that includes, of course, the PPA effects, investment carryout in the previous period, partially offset by the well-known positive impact of the end of the Rome concession.

Strong performance achieved is reflected in the EBIT RAB ratio that exceeds now 8.4% on an adjusted basis. Now on the adjusted net profit. I'm on Slide 13. Adjusted net profit after minorities reached EUR 674.5 million with an increase of 33% versus last year. This was mainly driven by 2i Rete Gas acquisition contribution and by the solid operating performance. So you see higher EBIT contribution of -- for EBIT of EUR 385 million, partially offset by an increase of adjusted net financial expenses that now include, firstly, the cost of the debt related to the acquisition financing of 2i Rete Gas equities for the price paid, secondly, the cost of 2i Rete Gas consolidated debt and lastly, the interest charges related to the higher cost of new bonds that had been issued during the year.

Then going forward, there is a lower -- marginally lower contribution coming from equity investments and higher adjusted taxes of EUR 103.6 million due to the higher taxable income and a tax rate of 28.4%, above last year level of 24.8% that in terms included the benefit of the patent-box. If we exclude the patent-box impact, tax rate is slightly higher, reflecting the different business mix of the company. Increasing minorities for EUR 3 million finally reflects the positive business performance.

As I told you before, I would like to go through also the technical investment we did in 2025 that reflects the full year for Italgas and the 9 months for 2i Rete Gas. And we passed the EUR 1.2 billion technical investment. As you can see, that is fully in line with the guidance but still is a significant number in respect of the previous year. It's up to nearly 36%. Development and repurposing activity reached and passed the EUR 700 million while you can see the digitization continues to grow. That is thanks to 2, let me say, trends.

One is that we have completed in the previous Italgas Reti digitization, still there's something going on always, but we are seeing already the increase due to the starting of the investment that we are making on the 2i Rete Gas network. And we will see this number going up also in the coming years. On the other that you see a significant increase in respect of last year, there is the investment -- the impact of 2i Rete Gas on centralized CapEx mainly linked to the IT system and the impact of the renewal of the car fleet, as you know. The long-term agreement on the car fleet is reflecting in the IFRS 16.

In terms of physical investment, we laid down nearly 1,000 kilometers, 40% of that in Greece, and as I said before, we started to upgrade in digital, the legacy of 2i Rete Gas network. This investment effort continue to support our long-term strategic objective to make the full network, including 2i Rete Gas now is -- the focus is on 2i Rete Gas network, to make it fully digitized.

Our RAB at the end of '25 reached EUR 15.7 billion, an increase of more than 54% due to 2i Rete Gas consolidation but also due to the investment that we made in the period.

Let me take a look before giving back the floor to Gianfranco for the final analysis, let me take just a look about the ESG performance of the group. And as you can see on a like-for-like and year-for-year basis, net energy consumption was reduced by 6% in respect of 2024. Scope 1 and 2 emission supported primarily by lower gas leakage level were down by 3.8% despite we significantly increased the number of kilometers inspected.

If you look at only the -- our gas leakage rate is 0.05%. You remember that when we started to measure the gas leakage rate was back in 2021, we were 0.1%. So we reduced by 50% the gas leakage rate over 4 years' time. That is thanks to the Picarro technology application and our continuous effort to reduce the time of intervention when we find a leakage.

When we look at the social dimension of ESG to mention is the increase of number of training hours per employee. We have already reached the target that we set last year for 2030 -- 2 years ago for 2030. Gender gap is still not at the 2030 level, but is moving toward the target. And I think we are fully confident that we will reach the target as well as for women in role of responsibility.

Finally, in terms of governance and external recognition, our ESG rating remains strong across all the major benchmark. You see below all the benchmark in which we are evaluated are either at the same level of last year, and the majority of them, we are above what we have achieved last year.

Cash flow on Page 16 is another record level data point, reaching now EUR 1.6 billion with a quite impressive EBITDA cash conversion of 86%. This important result is also due to the positive evolution of the net working capital in the year. This is mainly related to the super bonus impact, the residual one and in addition, the new contracts signed during the year and some other component linked to the business seasonality of the gas distribution and some other also positive cash component paid by the regulator by ARERA.

So this amount allowed us to entirely cover the net cash investment of EUR 1.1 billion as well as the dividend paid in May of EUR 349 million, including the minorities. So if you take out from the picture the amounts linked to the acquisition, we can affirm that the level of the debt remained broadly flat.

The 2 components linked to the acquisition are basically the EUR 4.1 billion for the price paid for the acquisition of 2i Rete Gas of EUR 2 billion, and the net financial debt consolidated of EUR 3.1 billion, net of the capital increase proceeds of EUR 1.02 billion.

Going to the net debt structure, you have more or less the same picture but on a enlarged basis. So the net debt at the year-end reached the amount of EUR 10.734 billion with an increase of around EUR 4 billion compared to the previous exercise. The average cost of debt is around 2% for '25 and the structure is 80% fixed rate, 20% floating.

You can appreciate also from the chart below that the floating component now include also some bank loans that has been executing during the year for some refinancing of certain maturities. The -- on the right side, you have also the maturity profile, starting from '26 going forward that now have the contribution of the, let's say, legacy bonds of 2i Rete Gas in addition to our bonds issued.

Let me close this presentation with Page 18 and talking about shareholder returns. As we know, we have looked over the years to provide to our shareholders an attractive and visible return in terms of dividends coupled with the benefit from the growth that we were able to deliver throughout the years. In 2025, with the big acquisition of 2i Rete Gas demonstrate again the validity of this principle.

Last -- yesterday, Board of Director of Italgas decided to propose a DPS of EUR 0.432 equivalent to the 65% payout. Again, so we confirm that principle. And once again, higher than the 5% annual increase floor that we declared in our policy. Just to remind you, we have never used in all the years the floor. We have been always above the floor. And if we look at the increase of this year, increase has been 13.3%. That is the result of the correction of the dividends we paid last year with the factor that is issued by the Borsa Italiana to take into account increased capital.

But let me make 2 comments on that. Even if you look at the absolute number without correcting that, if you just take the dividends that we pay for share last year and the dividend that we are going to pay this year, the growth is still above 5%, 6.4%. I would like to remind you that the more than 200 million shares that we issued last year were issued in June. And these new shareholders or new share will take full benefit of the result of 2025, even though they have been issued only for 6 months.

So you can make the math and see which is the growth, the real growth for the new shareholders that entered in June with the capital increase, and you will see that is a very huge number. Again, I would like to thank you for being here at the presentation, and we are now open for the questions you may have on this presentation. Thank you.

[Operator Instructions] The first questions from Aleksandra Arsova, Equita.

Thank you for the comprehensive presentation. Three questions on my end. The first one is on the clarification on Slide 5 on synergies you expect for 2026. As you mentioned, if the bar chart is represented correctly, I read it as at least EUR 100 million in synergies expected for last year -- for next year. So if you could confirm this. And if this could lead actually to double-digit growth again in 2026 of both EBITDA and on the bottom line, so net income.

The second one is on the regulatory framework on the concession for gas distribution in Italy. Also in previous occasions, we spoke about the fact that the government was thinking of some changes to the concession framework. So how this, let's say, procedure is going on? And if you think that the current situation in the Middle East, and the potential new energy crisis we may have, if this could move to the background, these potential changes to the framework?

And the last one, again, on gas tenders. If I remember correctly, a few months ago, you mentioned that you submitted 5 -- proposal for 5 tenders covering 600,000 redelivery points. So are you expecting the outcome? You already received some outcomes? So just a check on this.

Okay. Regarding the synergies, I told you the bar chart is correct. So you need to make a better, let me say, calculation because 2026, we expect to pass the 50% of the overall synergies. So it's more than EUR 100 million like you mentioned. So we expect to be about 50% of the overall synergies. So make your math 250 divided by 2. That is what we expect.

Regarding what is going to happen for the EBITDA and the net income for 2026, you should be a little bit patient and wait for our plan, a new strategic plan that will be presented in June. And by that time, we should release the guidance. Eventually, we are discussing if we need -- because it's going to be the end of June, maybe we can release the guidance probably with the first quarter result of 2026, so by early May. So that is what we think about. We will see but we will not release a guidance before that time.

Regarding the tenders, let me say that what we have seen in the last months of last year, a significant number of tenders coming up. So there are -- I don't know which one you are referring to, the one that you mentioned. But what we can tell you is that there has been a number of -- a couple of tenders that has been already closed and assigned to us . There are other 5 that are under in the period of, let me say, results. So they have been -- we already submitted the offer. The offer has been evaluated.

We are just waiting for the final word for which we expect all of 5 to be assigned to us. That is our expectation based on the results that were shown by the commission. And then there are another 7 that should be that -- for which we expect to submit the offer between, let me say, May and September. That is based on the picture that we have today.

So overall, if you look at the overall picture, we have seen a significant movement in the tenders, even without any change in the law. So hopefully, this movement will continue. So we should -- we hopefully will see some other tenders coming up in 2026. But numbers are -- so 5 they will be assigned and they will be closed very soon. Another 3 -- now is -- another 7 that will see the submission of the offer. Then I think it's a number that is changing a little bit the picture of the tender, more promising for an acceleration on the tender itself, even without the change in the law.

Next question is from Julius Nickelsen of Bank of America.

Thanks for the presentation. Just 2 from my side. The first, a follow-up on what you just said on the tenders. Is it then fair to say with the 5 that are basically imminent and the 7 that you expect that this is quite a bit better than what you expected at the strategic plan? Because if I look at that old chart there, 2026 still looks quite low at least in that -- those assumptions.

And then the other one is just on the cost efficiencies, the 5.2% that you flagged. I assume a big part from that is like in Italy, but could you also split out how the cost efficiencies in Greece and Water are going, that would be quite useful.

Okay. On the first one, I think the answer to you is that the tenders progress is probably slightly better than what we had planned last October. We were surprised by the number. Honestly, we are surprised by the number of tenders coming up. So if I have to say, the tenders are better than the plan. So we may see some acceleration in respect of the tender that we will probably see in the next strategic plan.

So we will include in the next strategic plan. Probably, it will be the first time in which we see an acceleration and not a delay in the tender progress.

Regarding cost efficiency, the cost efficiency, it is, I would probably say, mainly for gas distribution. So there is even it's a small contribution from Greece. Remember that the Water, the consolidation perimeter is very limited. Even though we present the Water sector as the overall -- remember that in Acqualatina and Siciliacque, we don't consolidate the numbers. So you don't see -- we may saving also there in terms of cost savings, no doubt about that. But you don't see that in our operating expenses because they are not in the perimeter of consolidation.

So let me say, the cost saving on a like-for-like basis is coming from the gas distribution, mainly Italy and also a small contribution coming from Greece.

The next question is from James Brand, Deutsche Bank.

I just had one question, and that was around your expectations for anything coming up on the regulatory side. Obviously, there's kind of the whole debate around TOTEX and when that comes in and what form. I think for you, that's the only thing that we're kind of expecting this year? If that's the case, kind of do you have any expectations for rough timing around that? And if there are other things that we should be looking out for, what are they?

As I told you, the regulator said that the TOTEX, the raw system will took place in a simplified version, starting from January 1, 2028. We have not seen up to now any consultation document. So we expect probably first consultation document to happen in the second half of the year.

So what I can tell you is that we are absolutely confident that the ROSS system will help let us be more -- even more flexible and be able to capture all the industrial opportunity we have to switch from CapEx to OpEx and vice versa that today we cannot do it because they are completely separating one to the other.

So we are waiting to see consultation document to better understanding how the regulator would like to shape the ROSS in the simplified version. But as soon as the consultation document will be issued, we will report to you in more detail what we think about the picture that the regulator will start to envisage.

The next question is from Javier Suarez from Mediobanca.

The first one is on the rationale for updating the market again with the business plan presentation in June. I think that your business plan presentation was by the end of October. So it's less than a year that you are going to update the business plan.

So I wanted to have your statement on the rationale for that. Is that linked for to what you see as an acceleration on AI implementation and digital transformation of the company? And therefore, you are seeing that acceleration as something instrumental to update the market.

And also, I guess the comment that you make, the acceleration on the gas and distribution tendering process would be another factor that explain that rationale for updating the market on the business plan so quickly. That would be the first question.

The second question is on the government decision to increase IRAP taxation for the next 2 years. The reason is that if you could consider as a fair assumption that from 2028 that additional taxation should be part of the new regulation given the IRAP taxes regulatory framework in Italy.

And then third question, I'm interesting to see your latest views on the operational improvement in Greece, how that operational improvement is comparing with what you are doing with 2i Rete Gas in Italy and also the evolution of the ESCo business that you are seeing as we speak.

The first answer is very simple. If you remember, we always updated the strategic plan in June, considering that is a nice period in which we have time to share with our shareholders and stakeholders, our view and the vision on the future. So we are going back to this, let me say, habit. Considering that when if you remember, when last October, we presented the strategic plan, we also at the time presented the 9 months result. So it was a little bit a mix of the 2. So our habit has been since the beginning, if you remember since 2017, to present strategic plan in June. So we want to go back.

And there is also, if you want another reason why -- that is the main reason. The other reason is that by June, we will probably report a better, let me say, advance of the synergies because at the time, it will be more than 1 year. And therefore, we can say, okay, 1 year has passed by since the acquisition of 2i Rete Gas, we can mark the line and say where we are. So the main reason is the first one. The second is, let me say, a collateral one, if you want, a by-product one, if you want.

Still the main reason is we want to go back to our habits to present our view and the vision of the future in June when there are no other, let me say, reports from us in terms of results that will either make the result itself less interesting because everybody will look at the strategic plan or vice versa. So we want to have a proper time in which strategic plan will be the only element, the only document that the analysts will consider.

On the second one, I think what if the taxation will continue or will be part of the new regulation. Always remember that when the regulator will consider the -- will recalculate the WACC, we have to assume a level of tax rate. So if IRAP will remain inside, there will be a different tax rate that will be used for the WACC. So honestly, I don't see that problem significantly.

If we look at the EBITDA margin. I think that regarding Greece, I always told you that we have an ambition about Greece. Ambition is to bring Greece as close as possible to the Italian, will never be as close because it's not -- does not have the economy or scale that we have in Italy. But I can tell you that today, Greece is 73.5% in respect to our 75% of the -- in term of EBITDA margin. So I think that is quite significant. So Greece is closing the gap very, very quickly, and we are very happy about the operation.

And I think that is -- last, on the ESCo side. You remember '24 has been a terrible year for ESCo. Remember that I told you and to the others that we will -- '24 will be terrible, and that has been terrible, but that was the foundation for a new cycle of the energy efficiency. And I think the numbers that we were be able to achieve in '25 is the starting point of a significant turnaround. Because if you look at the EBITDA contribution of ESCo, we passed the 15% in 2025. So it's -- even though the absolute number has not -- is not huge, but still, it's an incredible turnaround that we were able to make in 12 months, 2024, and we have started to see the results in 2025.

And they are extremely -- I'm extremely happy about such a result, demonstrating that there is room for the energy efficiency, there is room to do activity on the energy efficiency, maintaining a high profitability margin above 15%, and that is not our goal. Our goal is to reach 18%. So there's still room, there's still growth to be done, but we are -- we moved from less than 9% last year as an EBITDA margin to more than 15%. So the step forward, the increase has been significant and we are very happy about that.

The next question is from Christabel Kelly, UBS.

Yes, one question regarding Greece. This year were in the last year for the current regulatory period. When should we expect the 2027 allowed WACC to be confirmed, please?

I think you are right. This year is the last year, and then we will see the next 4 years regulatory cycle. We will start discussion with the Greek regulator immediately after summertime when we are going to present the new development plan. So I'm going back to the Mediobanca request, why we -- there is another reason why that I forget, having the strategic plan in June is because the numbers will help us also to give the same investment plan to the regulator in Greece that is normally requested in the month of September.

So it's fully aligned with that. So I forgot about that. So we are going to present the new development plan to the Greek regulator as well as the tariff as well as a proposal for the new WACC that, of course, will take into consideration all the difference in terms of framework, in terms of economic framework that we will have in Greece. So we will start discussion I imagine around September time. So development plan, that is the investment plan that is important as well as tariff as well, of course, inside the tariff, the WACC proposal. And then by year-end, we should have approval of the investment plan, approval of the WACC, approval of the tariff for the next 4 years.

The next question is from Alberto de Antonio of BNP Paribas Exane.

My first question will be a follow-up on Greece. Maybe if you could disclose a few additional numbers regarding revenues, CapEx and RAB by the end of fiscal year 2025. The second question will be a follow-up on tenders. You mentioned that there's -- there are 5 tenders to be assigned in the next few months. I was wondering how many of them -- of those are already managed by you? And what will be the incremental RAB if you win all of them?

And another question will be a follow-up on the TOTEX regulation. You have mentioned that you are expecting a simplified version of the ROSS based regulation. This means a simplified version versus the regulation that ones have . And finally, and I know that you don't bear any commodity risk, but I would like to know your views about the current situation regarding gas supply in Italy and if you foresee any potential physical risk of not receiving enough gas to cope with demand in Italy due to the current geopolitical situation.

I will give you some number about Greece. Revenues are around EUR 190 million. EBITDA, as I told you, is 73.5% is about EUR 140 million. And the RAB at the end of '25 is EUR 910 million. We invested in 2025 around EUR 130 million. Those are the big picture of Greece.

Regarding the tenders, I don't remember which was the question. So maybe you can help me? Can you repeat the question on the tender because I forgot? I just...

Yes, you mentioned that you have like 5 tenders to be assigned. And I was wondering how many of them are you already managing. And if you finally received the 5 tenders, what will be the incremental RAB that you will win from them?

Yes. We are present in all of them. So part of the -- let me say, with the new assignment, we are already about 80% of them. So part of the new RAB will come from 20%, and we are talking about EUR 70 million of RAB, EUR 70 million, EUR 80 million of RAB.

Third question on the ROSS side, it's always difficult to say. What I'm saying is what the regulator has told, has said that they want to apply a simplified ROSS base to few operators and between the few -- among the few operators, there is by definition, Italgas. So -- but except that, it's difficult to say any other words.

You mentioned but they have been in the ROSS discussion since, I think, at least a couple of years. So it's difficult to compare what is going to happen also because on their situation, they are the only one operator. So there is no other one, not only, but also the regulation is slightly different even at the beginning. So they had always to be -- to receive approval for their investment plan while we don't have that situation.

The ROSS will involve some sort of approvement of investment plan, combined with the cost. So today, it's difficult to give you more details than we know. We can guess what is going to happen. What I told you already is that we think that the ROSS will let -- give us more freedom from an industrial perspective to do in a simplified world make or buy, cost, OpEx or CapEx.

So to me, that's an important flexibility elements that will improve our ability to be even more efficient because we can switch from one to another in a framework that contain both what is called slow money and fast money.

On the last question that is very general, let me say that we have faced in 2022 a very big crisis about what happened in Russia and the invasion of Russia -- the invasion by the Russian of Ukraine and the crisis relevant to the gas supply. I think we were able, thanks to the gas infrastructure managed by Snam and ENI, to manage that in a very effective way. And I think today, the situation may look critical, but I think we have learned as a system how to react to such a situation for which I'm very confident that we will be able to manage also this situation.

The next question is from Davide Candela, Intesa Sanpaolo.

I have 2. The first one is regarding the WACC regulated in Italy. If you provide -- if you can provide us your latest assessment on the mark-to-market basis for 2027 WACC. And within that, if you can update us regarding the potential talks still on the formula regarding the fact that the -- for the calculation of the country's premium you have the spread in between Italy and in which France is not there anymore. So an update on that and if there would be updates from the watchdog in the next months?

And second question as regards the ESCo but on the working capital you built after the super bonus, if you just recall us, how much of the receivables you are yet to be -- are yet to be collected after 2025?

On the first question is, I mean, the observation period started October, so October, November, December, January and February, 5 months, 5 out of 12. Well, if you go to any, I think, Bloomberg and stuff like that, you can have the mark-to-market. It is significant. It may give you some idea, yes and no. Because in the next 7 months, everything can change. .

So honestly, I don't even know which is the mark-to-market. So I will tell you very frankly, but I think it's not relevant today to look at the mark-to-market today also because in this day is a lot of fluctuation.

Regarding the country premium, so the discussion about which are the countries that has to be included in a panel in order to face -- to make the comparison. I think we are still at what we said, and I think it has been already used. France should not be included. Remember that last year discussion is that the change from the country risk premium up and during -- after the observation period, honestly. So they have applied strictly the rule. So applying strictly the rule, we expect that this time, France will not be part of the panel anymore. It's not a country that has the rating to be included in the panel.

So that is our interpretation. Was applied last year correctly because what happened in France was after September 30, and therefore, should not have been used for which they have included France in the panel. Next time, France should not be in the panel because they are -- they don't have the characteristic to be included in the panel. I think that is what is going to happen. 7 months from now, well, many things may change. Honestly, I think it is too early to say what may happen to the WACC.

On the tax credit for the energy efficiency, we have in front of us a couple of years, so '26 and '27 in which we will have the benefit of the receivable generated in the past years, so '22, '23. And in addition, the new one, '24 and '25. And the amount will average around [ EUR 160 million and EUR 130 million].

Then afterwards, there will be a significant scale down because for the time being, we do not have any other receivable provided that there will be maybe some further receivables, some other projects coming this year and next year. But the picture now is the one that I provided to you.

The next question is from Walker-Hunt, Citi.

Just 1 quick question for me, if that's okay. I was wondering, do you think there is a risk about the 2% extra IRAP tax could be extended past 2027?

We don't see that risk. I mean the law is what it says, but then the law can be changed, but we don't see that risk right now. But as I told you the way in which the WACC is calculated should consider that difference in tax rate sooner or later.

The next question is from Tommaso Marabini at Banca Akros.

I wanted to ask you 2 questions. One is related to the tax rate that you see for the year 2026 to 2028 considering the 2% IRAP tax increase? The second question would be on the synergies again. You targeted of the EUR 250 million to 2031 in 2026. Do you already have some visibility on what is going to happen in the years 2027 to 2031? Is it going to be 2027 again a peak year? Or is it going to be distributed evenly in the rest of the years?

The impact of the increase of the tax rate IRAP is more or less 2% on the overall. Regarding the synergies, synergy, there is a big ramp up in '26. Then of course, I think we are going to have, if I remember well, 80% by 2028. So '26 will be very strong, '27 will continue to grow the overall amount and '28. So -- but the peak year will be this year and then the additional amount will be, of course, lower.

So that '26 would be probably the peak year in terms of absolute number. But then, of course, '27 will be higher than '26 because that will account for what we have already achieved in '26 will be translated in '27 but the additional amount is not what you will see from '26 in respect to '25.

But if you go to the Page 19 of our plan presentation, you have exactly the ramping up of the EUR 250 million synergies. What I can tell you that in '27, we will start seeing a significant number coming from AI. To me, is also an important element. And then in Page 20 and 21 of the strategic plan, you will have also some details about that. Some of them I have already mentioned before when I presented the synergy.

[Operator Instructions] Ladies and gentlemen, Ms. Scaglia, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

Thank you very much. And for anyone that has got any follow-up, please reach out the Investor Relations team. Thank you.

Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.

Hi. Good afternoon, and good morning to everyone, depending where you are located. We are very proud here to be today to present our strategic plan to 2031. I'm joined today by our Chairman, Mr. Paolo Ciocca; Mr. Paolo Gallo, our CEO; Pier Lorenzo Dell’Orco, CEO of Italgas Reti and Gianfranco Amoroso that you all know, our CFO. I leave now the floor to the Chairman.

So good morning and good afternoon, ladies and gentlemen, and thank you for attending today's presentation of Italgas 2025-2031 strategic plan. There are moments in our company's history when progress isn't just represented by financial or industrial results, but rather by recognition of its deepest identity. And by the way, Italgas' history is not at all a short one. This said by, as you well know, a young newcomer to the company.

Italgas identity is the cornerstone around which the group has developed in recent years, the cornerstone of an exciting journey that has seen the group establish itself as a global benchmark for innovation, model transformation, anticipation of the future. Today, 1 year after the previous strategic plan, we can say that our future mapping worked out well and ahead of schedule.

The group is further strengthened by its international leadership and has established itself also in terms of size as the leader in gas distribution in Europe. But it is not just a question of numbers. It is a question of vision and responsibility and the ability to drive energy transformation as enablers of decarbonization.

Our commitment is clear. We want industrial innovation with energy transition. We create networks that don't just distribute energy, but also enable molecules to change their nature from fossil fuel to renewables, from natural gas to biomethane, hydrogen and synthetic methane. We believe in technological neutrality as a guiding principle. This means evaluating all available solutions, building a resilient, competitive energy system that is ready to meet the needs of family, businesses and institutions.

In these recent years, we have demonstrated that the energy transition can be substantive, a substantive project. We have done so by extending and digitizing our networks, developing a market around the various areas, let's say, uses of hydrogen in the network and focusing on research and development.

Our aim is to make things happen. The plan we are about to present to you today is at the heart of this new phase and outlines how we intend to remain true to our nature, continuously evolving, faithful that our vision of the future of energy and our values because Italgas is changing, growing and expanding, at the same time, it keeps its 188 years old distinction in Italy, a force that builds a real progress and generates value at the service of communities and territories.

Now let's go to the [indiscernible] and let me welcome Paolo and its leadership team. Thank you.

[Presentation]

Good afternoon, everyone, and good morning for the person that are connected from abroad. It is for me a great pleasure to be here to present this strategic plan that represent the first strategic plan after the acquisition of 2i Rete Gas.

In this plan, we are setting a commitment that has never taken in the whole history of Italgas, a clear sign of confidence that we have for the future and the vision that we have for the future about our infrastructure. And we feel that today, we are going to share the vision with you, the investment, the technology and the people that will make this plan happen, shaping the energy of the future. But let me start with the where we stand today.

One year ago, we announced the acquisition of 2i Rete Gas, the largest -- the second largest gas DSO in Italy. And we have created with such acquisition, the largest European DSO. As you can see, those are the numbers. We serve nearly 13 million customers in the gas distribution. We serve directly and indirectly 6.3 million customers in Italy and Greece.

We manage nearly 160,000 kilometers of network. But moreover than that, we do all this activity, thanks to an incredible 6,400 employees that is the result of the combining of the 2 company. 7 months ago, we closed the deal, and now we wanted to show you the progress that we have made in such a short period of time. At the same time, we want to show you and share with you our vision for the next 7 years.

Let's take -- show you about our strategic vision. We want to maintain our leadership in innovation, in technology, in digital transformation, maximizing the value for all our stakeholders. The vision is built around, as I said, innovation, AI transformation, energy transition and with a focus, a never-ending focus on operational efficiency.

Three business area, you know very well that they are gas distribution in Italy and Greece, which remain in our core business. Water service, a sector where our digital capability that we can apply from our experience in gas distribution can make a difference. Energy efficiency that we feel it has been a little bit forgotten, but it's a key element for the energy transition, and we strongly believe on that. And on top of that, we think we can take a great advantage from unlocking all the possibilities and opportunities coming from the massive application of [ AI ] to our processes, our assets and our way in which we manage the company.

But before going on, let me take for a few moments, a look at the past. I think the past 9 years at Italgas has been extremely exciting and successful. And I think it is worth spending a few words about what we have achieved, where we stand today and which is our ambition.

We have invested up to the end of 2024, nearly EUR 7.5 billion growing the RAB up to EUR 10 billion before the acquisition of 2i Rete Gas.

We delivered an impressive OpEx reduction, minus 40% since 2018. We distributed more than EUR 2 billion dividends to our shareholders. At the same time, we were able to maintain a solid financial structure.

And we have done all of that reducing our carbon footprint, reducing our energy consumption.

Then 2025 make the difference.

We acquired the second largest DSO in Italy, and we become the first DSO in Europe.

We were already the first DSO in terms of innovation and technology, not in terms of size.

Now we cover also the size parts. And we achieved in Italy a market share of 55% -- now we are planning that is the ambition to invest in the next 7 years, EUR 16.5 billion, including the acquisition. That includes, of course, the acquisition of 2i Rete Gas.

And we expect that our EBITDA and our EPS will grow at double-digit numbers, starting from 2024 based. And the financial structure, as Gianfranco will show you later, is very strong, very robust, and we start deleveraging already in 2028.

But let me move more on the -- what we see the scenario of the gas for the future. I remember that in the industry, I was probably one of the first person to talk about the energy trilemma. And I remember that I was talking about that in London a few years ago during an interview that I had with Bloomberg. At the time, nobody were talking about the energy trilemma. Since then, as you can see from the trilemma today, something has changed, has shifted.

After the Ukraine invasion, the focus was to guarantee the energy supply, security of supply was at the top. And since then, since 2022, I think the situation in Europe has significantly changed. Most of the country have been able to get rid of the Russian gas and be able to build a different supplier, different supply flow.

Today, the focus has shifted to the cost of energy. And the cost of energy has become get the major attention of all the European countries, not only for industry because industry means competition, being able to compete at the world level, but also for the end customers, for the residential.

And I think one of the solution is the use of the gas infrastructure. DSO is part, is the heart of the solution. And there is a growing recognition that the trilemma cannot be solved just using ideological position, but a more pragmatic, a more neutral approach from a technological point of view will bring the solution. It's not going to be easy. It's not going to be linear, but that's the only way in which we can solve a complex problem like the energy.

And I think -- and we feel that the gas network bringing in the future, today in the future, renewable gases will help to solve the trilemma from a cost point of view and security point of view.

Let me show you some numbers, very interesting one. The evolution of the energy price and the gas price in Italy before the Ukraine invasion and today. As you can see, the cost of energy, the gas in terms of euro per megawatt hour has gone back more or less, not yet, but it's not very far from the price that we had before the Ukrainian invasion.

We cannot say the same for the electricity. Electricity price is 3x the gas price. And that makes even more difficult to think about electrification in certain sector. And if you couple that with the fact that we are going to see in the coming months and years, an increased demand of electricity, think about AI data-driven consumption, then will pose even more problem. The gap may even become bigger, not only, but if you think about what happened in Spain just before summer, more renewable you put in the system and you need to recover the rigidity that the renewable put in the energy system because renewable, it's production is not capacity.

And in this context, gas will continue to be in different form, crucial to maintain an energy system stable, efficient, secure with a cost that is affordable by everybody.

And we -- I brought you an example of the day-by-day life of the life of ourselves when we need to face certain decision to change, for example, a very traditional gas boiler for the heating system. And we made this comparison based on the number that you saw with no subsidies. That means that we are comparing apple with apple. 3 options: one that I consider probably the best effective one, very simple, high-efficiency boiler gas.

The second one is heat pumps with limited modification of the heating system. The third one is probably the one that the ideological people will say that is the best solution. Heat pumps change all your heating system, put what is the underfloor coils, you will be happy.

For 25 years, you will be happy because it will take 25 years to pay back the investments. What does it mean that by -- in 25 years, you will probably change everything. So you will never get there. And that is when you compare apple with apple with no subsidies.

But there is the solution. And the solution part of the solution is let's go back to what the European Commission made it years ago after Ukraine's invasion that probably has been forgotten for a long time. That is the REPowerEU. They clearly identify 3 path in order to reduce the dependence on Russia and at the same time, to reduce also the cost. That is the development of biomethane, the development of hydrogen production and importation and the last one, increase the energy efficiency in our real estate activities in everything in our industry, everywhere.

Why it has been forgotten? Because it's too difficult, again, -- that's the problem. But that is the solution because biomethane is something that is today available is competitive. Hydrogen, we will talk in a moment. And energy efficiency is the other area where there is a lack of interest, but it's -- again, it's one of the most effective tools that we have in order to reduce energy consumption and reduce our cost.

If I look -- if I take a look at the same situation in Italy, what we can say is that biomethane is a very high potential area. Many studies and our evidence about connection request to show that we will have an increase of biomethane production as an average by 50% every single year through 2030. That will let us reaching the goal of 5 billion cubic meters of production that represent about 7% to 8% of the total demand of gas in Italy.

And there are positive signal. One is the latest auction that was made about awarding the grants from our resilience recovery plant to upgrade the existing biogas into biomethane.

Hydrogen. Hydrogen is let me say, a longer-term opportunity because of the cost. But I think we should continue to invest in research and development to research in the use of hydrogen.

Our plant in Sardinia, Pier Lorenzo will talk to you about that. I around, it's a clear demonstration that we can build an ecosystem that is based on hydrogen. Is it competitive? Not yet, but still, there are very nice signal about that competition. Think about that the energy conversion into hydrogen is 55% in a small plant. So if you scale up the plant, you can even reach higher efficiency.

And finally, the e-Methane that is for us and for Europe is probably the new frontier. For Japan, it's not. Japan is testing significantly e-Methane. See, e-Methane as the solution for gas supply in Japan. It's the combination of CO2 capture with hydrogen. So what I'm telling you with this example is that with a pragmatic approach, you find many solutions that can bring you security of supply, energy transition and cost of the energy altogether as a solution.

And the fact that the gas will continue to be there today, fossil, tomorrow, renewable is also shown by this graph.

After the shock in 2022, we have already seen some recovery in '24. And if I look at the first semester of '25 in respect of '24, we saw an increase in 6% -- and we have just closed the numbers at the end of September, and we look at what we injected in our network in respect of the previous year and the growth is still close to 6% also at the end of September '25.

And as I said before, more electrification expands, more renewable in the picture and the more we need the molecule to compensate the rigidity of the electrification.

But let me now move and give a quick outlook about the progress that we made on the 2i Rete Gas integration. You remember, I don't want to go through all the story about the different steps, but I wanted just to stay on the fact that 1st of July, we merged Italgas Reti with 2i Rete Gas.

And I think that has been an incredible achievement, 90 days to complete that process. And then to complete the all 2i Rete Gas acquisition, we need to satisfy also the mandatory request by the antitrust. As you know, that has been recently closed, let me say, the agreement with the 4 buyers, the 600,000 redelivery point that were requested to be put on sale, we received 12 acceptable from a price floor point of view offers for a total of less than 250 redelivery point, which were considered also acceptable from the antitrust point of view in terms of requirement that the buyers should have.

The process will involve the disposal of the delivery point together with the personnel, the systems and all the assets that are needed to operate this redelivery point, this network.

The RAB value associated is EUR 218 million. The overall price that is paid will be paid is set at EUR 253 million, significant premium paid over the RAB.

We expect the closing to be happened before the end of the first quarter of 2026. But of course, it will depend about also the buyer.

Regarding what has not been sold, so the remaining 350,000 redelivery point, we don't have to do any second round of disposal on this redelivery point in this network will be applied the so-called soft remedies that will be applied when the tender process of the award of this asset will take place.

So -- but let me say, I wanted to share with you another point that is we always said and I have already said at the beginning that we are -- that we are the best in our industry. But I wanted to bring you data facts to show you that our statement is true. So we made a comparison with our international peers. And we have looked at the different topics that for us makes the difference.

So smart meters, we are close to 100%. If you look around Europe and worldwide, there is no one that is passing 50% of the installation. And the majority are below that number significantly.

Network digitization, this is where the gap is huge. there is no one, no one that has made such an upgrade of the network. And when I say network digitized means that I can control remotely everything that I can manage the network remotely everything. Pier Lorenzo will tell you more in detail what does it mean that. And on top of that, we are going to implement the AI transformation in which we see some other example. But to me, to be extremely effective and to be able to adopt on a massive -- at a massive level AI, you need to have a network fully digitized and you need to have a collection of billions of data in order to be able to really leverage the application of AI.

On the biomethane, that buys from country to country. We know that there are other countries that are better positioned than us. But I think Italy will recover this gap very soon.

On the network ready for hydrogen. If I look at our plant in Sardinia, we can say that our network is 100% ready to accept 2% or 20% of hydrogen. In fact, we have a protocol with the Ministry of Industry and Energy to scale up the 2% that is the minimum up to 20%.

If I look at the average of the network in Italy, then we can say that 80% is ready for 20% blending. But I also can say that by the end of the plan, we will have 100% of our network ready for a blending of hydrogen up to 20%.

Let me go through some more significant progress we have made in the months since the acquisition of 2i Rete Gas very quickly, but I think extremely representative of our ability to make things happen.

On the operational point of view, we have fully reorganized our territorial footprint, redesigning our territorial model, reducing the area of overlapping. At the same time, we have closed 19 office. We have reduced our fleet car by 13%, thanks to the to the synergy that we are starting to extract.

The core of the activity has been the IT. We moved 1 petabyte of data, 1 petabyte of data. I don't know how many 0 they have it. So forgive me for that, in 90 days with no problem at all. And I think that makes -- that show our -- let me say, the strength of our IT infrastructure in dealing with such a large number.

We have started in-sourcing activity, and I start mentioning Picarro. We have the largest fleet in the world of Picarro machines. We know how to manage, we know how to drive them, we know how to use them. We immediately stopped the third-party contract that 2i Rete Gas had, and we immediately start in sourcing that as well as we started to in-source activity like the integrated supervision center and other ones with a termination of a number of contracts with third party.

And finally, we started to implement the digitization plan that we have for 2i Rete Gas. But let me start now to look at the numbers because I think you are here also not only to listen my and our vision, but also to see the numbers. And I'm starting from the ones that you like most, synergies in cost and revenues.

So I'm starting from the synergies from revenues. From April, when we closed the acquisition, we had several working groups working together between Italgas and 2i Rete Gas, Ex-Ri-Rete Gas people in order to find out the area of synergies and to find out the area where we have to invest in order to upgrade the network to the level that we have in Italgas.

And we find out that there are more investment that we expected that we presented to you last year, EUR 800 million. And we find out that there are more up to EUR 900 million. At the same time, the revenue contribution from this additional investment moved from EUR 80 million to EUR 100 million at the end of the plan.

Just to mention some of the initiatives that are included in this EUR 900 million investment replacement, we find out that there are still some traditional meters in 2i Rete Gas network that are not be replaced. So that is the first thing that we started. We will finish by early 2026.

But then we find out all the area where we need to upgrade, not only upgrade the single equipment, but also changing, for example, the authorization system to our standard. And based on that, we have a clear and detailed digitization plan that has already started and will deliver the EUR 900 million additional investment and the EUR 100 million additional revenue. But probably the most interesting one for you are the cost of synergy that you have already seen in our plan.

And I want to remind you that last year, some of you, I don't know if many of you or a few of you were very skeptical about our ability to reach the EUR 200 million. We raised the bar. Now we are at EUR 250 million. And I think our history and our track record makes this number credible. And how we find out this EUR 250 million over time, because, as I said, the working groups have been working for months, identifying which are the areas that we can improve, where we can extract value, when we can have synergies and we have a detailed plan for each of the activities. So we know also in terms of time frame when this synergy will happen.

And you can see in this graph, the previous plan in terms of time, in terms of value and the new plan in terms of time, in terms of value. So the upgrade was driven by a shift from an outside in to an inside in perspective. And it clearly reflects an optimized. There are a lot of activity that will be in-sourced -- with our ambition to avoid any redundancy, there will be no redundancy in our plan. There is no redundancy in our plan, but we will maximize in-sourcing, bringing inside the company what we feel are the core activity of the company and with the ambition to retain our top talent.

We -- if you remember, last year, we were talking about 3 pillars of synergies, traditional digital and AI. Well, during the activity of the working group, we realized that the first 2 pillars sometimes are crossing one to each other. So now you will see only 2 pillars, traditional and digital and AI. And I promise to you that I will show you the time frame of the 2 categories, and I will show you and give you an example of what we are doing and what we will do.

So the first one represent traditional and digital. If you remember, the sum of the 2 last year were in the range of EUR 120 million, EUR 140 million. We gave you the range. Now we are EUR 180 million. So the delta in the EUR 50 million that we are talking about are concentrated in this area.

The cost saving benefits related to such initiative will be fully visible already in 2025, some of them, a few of them, still they will be visible. And you have already noticed in the 9 months result that there are some cost savings that are coming from the synergies from the acquisition of 2i Rete Gas.

In '26 and '29, we will continue in-sourcing core activity. That is the main driver, including some example, authorization measurement, metrology inspection, emergency response service, those are core activity that we cannot leave to a third party. And we will use digitization and AI to work on an approach that is applying the predictive maintenance.

Supplier will be part of this effort. Supplier base will be rationalized. We want our supplier to grow because we are a different company in terms of size with respect to the past, and we want to improve from a quality and economic point of view, the procurement condition. This initiative combined together will let us achieving the majority of the EUR 180 million by 2028.

And then in the last 3 years, we will see a massive rollout of our Nimbus smart meter, and we will complete the digitization of 2i Rete Gas network.

Regarding the AI, AI is a little bit more difficult in a sense that is from one side, the most exciting journey. From the other side is less predictable because we don't have any example, especially in our industry.

The numbers today is set at EUR 70 million and does not include any additional initiatives that may arise in the future, but have not been yet identified. We have tried to list for you some of the initiatives, some of the use case that we have already been working, we have been identified use case that we have identified for which we have started working on that. These initiatives are expected to deliver most of the anticipated benefit over the next few years.

Some examples, you can read it, AI-driven automatic scheduling algorithm, which allows to improve planning optimization, increase intervention sussection rate, taking into account external factor.

We have already developed, I have already mentioned to you a couple of times, a predictive algorithm for faulty smart meters that is capable to anticipate by a few days. The occurrence of faults, optimizing our intervention and reducing the penalty risk.

We have also identified AI opportunities also in the same IT. For example, we are implementing the first level end user support agentic automation for the IT system and application, very difficult to explain. So don't ask me what is exactly meaning. But what I can tell you that these initiatives application has been recently awarded by Databricks that is a leading platform for data engineering.

We will use agentic AI also in the commercial activities in order to manage requests and claims reducing external cost and increasing our productivity.

To do all that, we have set up AI rooms. So you know that we have a digital factory. Well, now the digital factory is split into 50% is always devoted to develop digital application. The remaining 50% is devoted to develop AI application, AI algorithms. So we are going to have not only digital rooms, but also AI rooms. That is what we have already planned and that is covering the portion of the synergy that is evidenced that are underlying in this chart.

For the remaining, so we are talking on a medium, long term, there are a number of use cases that we have already identified that will be approach later in the plan that regard virtual coach for productivity enhancement, basic drafting, so we'll touch the engineering activities, autonomous network management, smart meter activation, remote smart meter activation.

And finally, to use the autonomous driving for leak detection. In that case, we need to have a policy approval, but I can tell you that we have already started working with the Politecnico the University, Politecnico di Milano and di Torino in order to have the first prototype of autonomous driving for gas leakage research next year. It is important to highlight that this transformation will be also an opportunity for our personnel to change their skills to reskill and upskill and move from low added value activity to, let me call it, AI governance that is much more interesting than not doing the low value-added activity.

Now I will move in the numbers. I have already anticipated the total investment for the plan period, including the acquisition already done of 2i Rete Gas is EUR 16.5 billion, plus 5.7%. If we take out -- if we exclude the acquisition of 2i Rete Gas and the tenders, the increase is 10%, more than 10%.

In order to facilitate the comparison, we have reclassified -- last year plan, you remember that to avoid to share publicly what was our expectation about antitrust disposal, we merged the 2 numbers together, tenders and disposal. So now we took out the disposal. So now the tenders that you see are the gross tender or gross tender are the tenders in order to facilitate the comparison.

And you can see that the 2 numbers of 2i are different, are higher in this plan, not because we pay more, but in fact, the reality is that we pay less than expected, but we retain more assets than not the one requested by the antitrust. So the EUR 4.8 billion, EUR 4.9 billion that is the explanation.

Regarding the other area, the driver and Pier Lorenzo will tell you in a moment, is the gas distribution in Italy, an increase of EUR 1 billion. Greece remains stable in terms of EUR 1 billion investment as well as the other 2 activities, water and energy efficiency.

Finally, the tenders, 1 year has passed and 1 year has been, let me say, another year of delay. That's normal. I mean that is common to the last 10 plans that we presented to you. So nothing new. And that is the reason why we reduced the number from EUR 1.7 billion to EUR 1.5 billion. That number accounts for less than 10% of the overall investment. If we look at different perspective, that is also interesting, I would like to ask your attention on the right part of the slide, it's interesting to look about the different areas.

Largest amount of investment is allocated roughly for 40% of the total on network development and upgrade of the network in Italy and Greece, nearly 20%, 19% of digitization and AI. I would like to ask you if you know any other gas DSO that is investing such significant amount of money in digital and AI.

And finally, Water and ESCo accounts for 5%, while tenders account for 9%. Trying again to give you a full picture of our investment plan. Our effort is focused on 3 main pillars. As we said before, network development upgrade and maintenance.

We are leveraging our scale. We are leveraging our skill in order to move to a predictive maintenance that is driving and will drive our CapEx plan to improve reliability and performance of the network.

The second pillar is asset digitization. We need to bring the 2i Rete Gas at the same level of our network as well as AI transformation. That is where we have the bigger difference from our competitors. There is where we have the big expertise in terms of network automation, in terms of digital transformation and in the coming years in terms of the AI application.

The third pillar referred to the other initiative, water and energy efficiency. Here, we think that extending all the innovation that we have brought to the gas distribution into water and energy efficiency will make the difference. We'll make the difference because on the water sector, we will see significant reduction of leaks as well as gas, but gas is already very low.

And then we will enhance infrastructure resilience in gas and water. We will improve operational efficiency. You have already seen some results, reducing energy consumption and dispatching green gases. These are the things that are taking together all these activities. But now I will go into more details, and I will leave the floor to Pier Lorenzo, who will talk to you about gas distribution in Italy and Greece, please.

Thank you, Paolo. I'm really excited to be today on this stage to present the investment plan on gas distribution in Italy and Greece of Italgas, which is the largest in our long history. And let's start with the biggest chunk of the plan, which is dedicated to our core network investments in Italy and in Greece. It accounts for EUR 7.7 billion, and we will develop the plan along 3 lines. starting from repurposing of the grids, basically by replacement of older assets driven by predictive maintenance and active leak search through our cutting-edge technology, Picarro, which you already know.

But on top of that, we will invest on grid development and extension basically to execute the commitments that we have undertaken as a result of the already awarded tenders and in Greece for the extension of the existing grid, driven by the requests for new connections.

Furthermore, we plan to invest more on top of that as a result of the awarding of new tenders. And last but not least, we will invest on the infrastructure enhancement with several initiatives ranging from the installation of small-scale LNG plants in Sardinia and again in Greece, development with -- of reverse flow plants, innovative reverse flow plants, which will help us debottlenecking the existing grid to promote biomethane connections and power-to-gas pilot project plant, which has been already put in operation just a few weeks ago.

Let's deep dive into the investments that we are planning in Italy, the organic investments dedicated to network. So these investments accounts for EUR 5.4 billion, and they include network development and centralized investment. They do not include new tenders.

Amongst others, we will invest to execute the commitments that we have undertaken as a result of the 8 items that we have already been awarded all across Italy, plus 2 additional items tenders that we expect to be awarded in a very short period of time. This piece of plan accounts for about EUR 1 billion, and it underpins about 2,000 kilometers of networks in terms of both extensions, new networks and repurposing of existing networks.

Along with that, we will invest -- continue to invest in Sardinia, where we have completed 100% of the network, more than 1,000 kilometers. We will invest basically to convert the large cities of the region, namely Oristano, Sassari, Cagliari and Nuoro by 2026. We will do that by deploying against small-scale LNG plants where the cities cannot be connected directly to a methane pipeline.

Moving to the tenders. As of today, in Italy, all in all, we can record 11 officially awarded tenders -- and there is still a long road to do to the end of this process. We have still 166 tenders to go. So this year, as always, we have reviewed the schedule of the tender based on the actual progress status of the process. We believe strongly that the tenders represent a great opportunity for Italgas to further consolidate the markets.

We can leverage on our current features to be best positioned to win the tenders. We have a strong track record. We have recorded 8 wins out of 11 tenders, but I should say out of 9 tenders because we took part to 9 tenders out of the 11. So the track record is really very successful. And all in all, with this plan, we are devoting EUR 1.5 billion to the new tenders, which will result in an increase in delivery points that we project to step up to EUR 2 million by the end of the plan horizon.

Moving to Greece. As Paolo anticipated, we're basically confirming EUR 1 billion of investments. In this area, the investment will be dedicated primarily to the extension of the network driven by the request for new connections. This will result in the realization of 2,500 kilometers of new networks with an increase in terms of RAB up to EUR 1.3 billion by the end of the plan horizon.

And in parallel, a sharp increase in terms of number of users, stepping up from more than 600,000 to nearly 1 million redelivery points by the end of the plan with a CAGR of plus 6.5%.

Let's talk about green gases. We confirm our full commitment in promoting green gases and in particularly biomethane and hydrogen. Concerning biomethane, we can record as of today, 11 connections of biomethane plants to our networks. We had only just 3 years ago. So this is a sharp increase. But what's more, we have more than 38 new projects of connections under development.

What's more, we have installed 3 reverse flow plants. This is a very innovative type of plants, which is vital to debottleneck the local distribution grids in order to promote the full injection of biomethane into the grids. So all in all, we are projecting by the end of 2030 to increase the production capacity of biomethane injected into Italgas grids up to 1.2 billion cubic meters per year.

Talking about hydrogen. We have inaugurated just a few weeks ago, the hydrogen hyround project. This is a very innovative project, basically a power-to-gas hydrogen plant. It is in Sardinia, near Calgary, and it stands out as of today due to its very high efficiency, 55%. But what's more, it is really a showcase of the entire supply chain of hydrogen, starting from the production of real green hydrogen from a photovoltaic plant nearby, which produces the electricity needed to generate the hydrogen. Then we have storage. And then we have the demonstration of various end users of the hydrogen.

We have a refueling station for vehicles over there. We have a pipeline for direct connection to a nearby industrial site. And the most distinctive feature, we are blending the hydrogen together with natural gas to feed the local gas distribution network of the city of H2.

And we plan in the next 12 months to increase the percentage of blending starting from the current 2% of hydrogen up to 20% of hydrogen. This will make hyround project a unique site all over Europe.

Let's move to digitization. We have dedicated in this plan EUR 3.1 billion of investment in Italy and in Greece. We will develop the investment addressing basically 3 clusters of initiatives. First of all, we are going to digitize all the assets that we have acquired from 2i Rete Gas, so that these assets will be completely controlled and monitored remotely by DANA from our control rooms in Turin and Florence.

Second cluster, we are going to deploy our brand-new smart meter, Nimbus in Italy. We have validated the project. We have patented that meter. It is patented in Italy, in Eurasia, and we have a patent pending in Europe. The meters has confirmed to have superior performances compared to all the smart meters presently available on the market. So we have decided to massively roll out the meters in Italy and in Greece.

And the third cluster will concern AI transformation and IT infrastructure upgrade in order to develop AI-driven new algorithms.

Talking about digitization in Italy. This has become basically a trademark for Italgas. We are dedicating this plan EUR 2.9 billion in order to complete the digitization of all the assets that we have acquired from 2i Rete Gas. It's quite a large portfolio of assets. I recall that 2i Rete Gas has brought to us more than 1,200 City Gates, 12,000 district governors, more than 70,000 kilometers of networks, and we have to digitize all the bunch of pieces of equipment in a very short period of time.

So we have envisaged a step-by-step approach. The first step will come to completion by the end of 2027. We will fully digitize the 1,200 City Gates so that the entire network will be remotely controlled by DANA from our control rooms in Turin and Florence in Italy.

In parallel, we will digitize the 12,000 district governors, which are basically smaller plants. so that by the end of the plan horizon 2013, we will have completely digitized the entire asset portfolio of former 2i Rete Gas.

AI. Let me first recall what we have done so far. We started in 2017 with a visionary approach to digitize our operation and our assets. We set up a digital factory at our headquarters in Milano. And I think that we have been very successful. Over the period of time, 2017, 2024, we have deployed more than 50 innovative digital solutions. We have reviewed more than 300 processes. But what's more, we have involved a huge amount of our employees -- and this makes the digital factory and the digital approach a change management project, more than 750 people involved in the last 18 months only.

So now we have to face the second stage, the second phase starting from this year to the end of this plan, which will be focused on AI transformation. And Paolo has mentioned some of the first projects that we are already executing. So for sure, we will address data quality. We will develop algorithms in order to achieve operational excellence, and we will improve in general, our operational skills.

We will evolve the digital factory from digital rooms to AI rooms in order to design all the AI stuff that is needed for this transformation.

DANA will evolve, will change, will transform from a basic software for remote control and command of the network to a real platform for AI-enabled automation. And as I've mentioned before, we have already 100% of our network legacy 2i Gas Rete fully controlled by DANA. By the end of 2027, we will extend this control capability to the new grids, the new assets acquired from the former 2i Rete Gas.

And meantime, we will deploy DANA by the end of 2026 also in Greece, so that DANA will cover the entire portfolio of assets of the group.

The other important cluster of investment concerns metering. As I said, in this plan, we are planning a massive deployment of our Nimbus meter in Italy, primarily in order to address the replacement of the first generation of smart meters, which are based on GPRS technology or 2.5G. This technology will soon come to obsolescence. So we have decided to massive replace these meters with the Nimbus.

In parallel, we will do the same thing in Greece, where the installation is driven by the need of replacing traditional meters, not even smart meters. And on top of that, the new connection, the new users, which will be driven by the extension of the grid that I already mentioned.

Let me conclude my presentation by confirming here our full commitment to reach the challenging targets in terms of reduction in net energy consumption and green gas emissions -- greenhouse gas emissions, sorry. We have reviewed these targets on the basis of the successful performances that we have recorded so far. We are ahead of our original schedule, together with the extension of perimeter resulting from the recent acquisition of 2i Rete Gas.

So in this plan, we're setting these new targets. In terms of reduction of net energy consumption, we aim at reaching a target of minus 35% by the end of 2030 compared to the baseline of 2020 and minus 11% compared to the baseline of 2024. We will do that progressing with the project initiatives that we have already undertaken on our legacy networks and will extend to the former 2i Rete Gas networks.

So energy efficiency projects for industrial consumption and for civil consumptions, optimized fleet -- car fleet management and also a reduction of the uses of cars driven by AI.

Concerning emissions, we are setting new targets on Scope 1 and 2. The new targets are a reduction of minus 55% by the end of 2030 compared to the baseline of 2020 and minus 26% compared to the baseline of 2024. We will do that with our innovative technology of Picarro for gas leak detection with smart maintenance and also with the energy efficiency initiatives that reduces energy consumption, but as a byproduct reduces also emissions to the atmosphere. These targets are in full alignment with the 1.5-degree Celsius scenario of the Paris Agreement, and we will target net zero by 2050.

Scope 3 emission, again, -- we are confirming our commitment towards achieving the target in terms of reduction of minus 24% by 2030 compared to the baseline of 2024. This, of course, we will achieve by tight collaboration with our partners, vendors and suppliers.

So thank you very much, and I give the floor back to Paolo for Water and ESCo.

Before getting into the numbers before giving the floor to Gianfranco, I would like just to spend a few words regarding the other 2 activities that we have in the group that are water distribution and energy efficiency. As I said before, our approach is whatever we have developed in the gas distribution, we are going to apply, especially in the water side, but also we are using in a mutual support, the energy efficiency as energy efficiency company is testing the solution to us. We are providing them ideas about innovation and then the tested solution will be put on the market. So that is the -- what is behind the link between gas distribution, water distribution and energy efficiency. On top of that, on the water, Pier Lorenzo described DANA. We will have very soon a DANA for water exactly the same as long as we will have digitized the network, we will be able to manage the network, the water distribution network remotely similar to what we are doing on the gas distribution.

On the water, we will carry out large-scale replacement of all pipelines in order to reduce together with the digitization, also the water leakages. In the energy efficiency, there has been a change in respect to the previous plan. We have less M&A. We find that was not the best way to grow the business. We are moving to let me say, traditional between brackets because it's not really traditional EPC business development. So it's going to be organic development.

We will have -- we will see in the numbers, less revenues, higher profitability. We are going to apply in that case, I'm saying it traditional, but it's not really traditional. We are going to apply advanced technical solution, innovative solution in order to manage and to keep the customer loyal to us. And always remember that energy efficiency is also helping us in order to reduce and to achieve the targets that Lorenzo has described before.

Give you a few examples about the water, what we are doing. Since the acquisition, we have managed the company independently of the consolidation perimeter. So we manage the company being the industrial partner. And we are committed over the plan period to invest EUR 450 million. [indiscernible] EUR 450 million is what we consolidate in our numbers. If you look at the overall numbers, independently of the consolidation, the number looks bigger, it's EUR 800 million. That includes network replacement, extension, completing the development of infrastructure to increase water availability. We show you in the picture the desalinization plant that we have already built in Sicily to improve the availability of water.

And on the other side, Ventotene Water Treatment Plant that has been also done. You probably know the Ventotene Island was a way to increase the quality of the water. Of course, we use a lot of funds, local and the national resilience recovery fund in order to accelerate what we feel it is essential to transform the water distribution in a better service for the customers.

The plan is very -- the plan is written in this presentation. You see that our goal is to digitize the water distribution. There are a difference between the first 2 company and the second one because the first 2 are distributing up to the final customer. The other 2 are just transportation. But apart from that, the approach is exactly the same. We want to fully control the network remotely, and we want in that way to reduce significantly the water losses.

The numbers of the sector, investing EUR 450 million will bring the RAB at the end of the plan over EUR 300 million. Revenue will be EUR 220 million higher than the previous plan as well as the EBITDA that will pass the EUR 100 million. That is the numbers. But to me, more -- even more important are the other objective that is the leak reduction.

We want to bring down significantly the leakages of water to a number that is well below the average -- the Italian average, either in distribution and transportation. We can do that only if we digitize the network, only if we replace the older pipelines. And this objective can be reached only if we are going to invest the numbers that I mentioned before.

In the meantime, energy efficiency, our company, ESCo, will work to support this company to reduce the energy consumption. 33% is our goal by 2030, even though we have experienced in 2024, a significant increase in the energy consumption due to the drought that we had not only in Sicily, but also in other parts of Italy. As well, we want to reduce by 33% Scope 1 and 2 with always the same target to get to 2050 with a net zero carbon footprint.

Finally, on energy efficiency. as I told you at the beginning, was one of the 3 pillars designed by the European Commission in the REPowerEU to reduce the energy consumption, to get rid of the Russian supply energy to diversify the energy supply. That was a pillar that has been forgotten very soon. Why? As I told you, it's difficult, but it's fundamental to reach the energy transition goal. And our strategy is to offer to the 3 segments that you see, residential, industrial and public administration, innovative solution, digitized solution because that's the only way in which we can reach the targets set by the REPowerEU or in any case, set by the energy transition.

We are going to invest nearly EUR 400 million, EUR 340 million throughout the plan period, mainly on the EPC contract development with limited amount of M&A contribution to growth. That means slower revenue growth, but higher profitability. As I said, our focus is on residential and industrial segment as well as public administration. With that effort, we will reach a total revenue by the end of the plan and EUR 260 million with a margin that will be 20% of EBITDA with an EBITDA margin of 20% -- if you have look at the numbers in the first 9 months, we are already there, I mean, very close, 19%. And we will continue to be there. We don't want to have -- we don't want to offer low-value solution. Our solution will be high value, innovative from a technology point of view and digitized.

Now I leave the floor to Gianfranco for the conclusion of the presentation with the numbers.

Good afternoon, everybody. I will -- thank you, Paolo. I will give you a quick overview over the 9-month results of this year. And immediately after, we will have another deep dive into the financial performance of the strategic plan.

So let's start with this picture. I like it very much because it's very clear. is a clear demonstration of growth. Basically all the KPI of the profit and loss accounts are in the same direction. The direction is a clear growth. Italian gas distribution is the main contributor to these results made of different elements. There is the recovery of previous gap, of course, as you know very well since the first half. So the recovery of the deflator, the recovery of the OpEx recognizing the tariff by the new provision issued by the regulator. And all this, of course, together with the contribution of 2i Rete Gas consolidated starting from the 1st of April, more than offset the impact -- the negative impact of the WACC, the 60 bps this year compared to last year.

In the meanwhile, in parallel Water, Greece and ESCo are continuing their trajectory positively contributing to the performance. And most importantly, as we will comment a few later after, there is a gaining momentum on the efficiencies. So benefiting of the first contribution of the initial synergies that we are implementing in this first 6 months.

So basically, the EBIT marks a growth of more than 50%, 53.8%, notwithstanding the negative impact of the PPA, we made the preliminary allocation of the PPA starting from 1st of April, and this accounts for around EUR 10 million in this 6-month period.

Cash flow generation is massive. We exceeded EUR 1 billion, of course, a record high for this period of time in the year and will cover -- is able to cover all the technical CapEx and part of the dividend, of course. CapEx, we will comment briefly after accounted for EUR 773 million, growing 40%, 40.7% compared to last year.

And net debt, of course, increased reaching EUR 10.9 billion, of course, impacted by the acquisition. So the price paid, the debt assumed through the consolidation of the company, net of the proceed of the capital increase successfully executed in June.

So all these elements will support an improving of the guidance for 2025 that I will comment later on talking about the strategic plan. I will -- sorry, I will go directly to the performance. So revenues and operating costs.

So the most important thing that I want to remark here is the new element that you see on the right side of the slide, that is the minus 3.5% on a like-for-like basis in the efficiencies. This is the result of the first activities, the starting of the activities that we started last April. And this made of all the action that Paolo and Lorenzo explained before.

The number attached to this potential is EUR 14.6 million that is already, let's say, an indicator of the progression of the total number that we had commented before.

Going back for a while to the total revenues. I mean, the -- as you can see, the main contributor is 2i Rete Gas, of course, due to the consolidation. There is also the positive contribution in terms of RAB growth made by both the Italian gas distribution and the Greek distribution and also the impact of the resolution of ARERA that I commented before.

The negative is, of course, the negative impact of the WACC accounting for about EUR 38.7 million, while on the -- over the EUR 42.7 million water and ESCo, ESCo contributed approximately EUR 426 million.

So if you go to the following slide, we can see the performance in terms of adjusted EBITDA, a robust profitability, benefiting from the updated perimeters of the consolidation and also the action for the reduction of the cost.

EBITDA growth compared to the last year of about 35.6%. Distribution was usually the main contributor to this performance with a positive of EUR 347 million, while Water and ESCo contributed also with EUR 12.6 million.

In terms of EBIT, very short comment apart from the, let's say, contribution of the EBITDA, there is, of course, the change in the D&A that is negative. This, of course, is the impact of the consolidation of 2i Rete Gas, the CapEx executed in the last quarter and let's say, that more than offset the positive contribution due to the, let's say, termination of the Rome concession last year.

In terms of net profit in the following page, of course, the growth, as we have seen is double digit in terms of net profit adjusted, up to 36.8% versus last year. Of course, there is the impact of 2i Rete Gas acquisition in terms of positive contribution of EUR 274 million, while on the negative expected impact of the financial charges due to the increase in the debt linked to the acquisition, the bridge financing, the bond that we issued in February, the interest on the debt consolidated through the acquisition of 2i Rete Gas. And the total impact of all of that is around EUR 77 million, as you can see.

On the taxable income and tax rate, you see that there is a negative of EUR 58 million. This is due to the increase in the EBIT -- total that has driven the tax rate to 28.1%, a slight increase from the 27.6% of last year.

So if we move to the technical investments briefly, as I commented, the total amount of CapEx in the period has been of EUR 773 million, up to 40.7% compared to last year. I would underline a couple of things. The first is more than 600 kilometers of new network pipes execute deployed during the period, of which 360 in Greece. And the starting of the activity, the preparation works for the upgrade and the digitization plan of the perimeter of 2i Rete Gas.

Now on the cash flow. As I said, the remarkable number is the EUR 1 billion of operational cash flow. There is -- these results very positive as, let's say, more than offset the slightly negative impact of the net working capital, about EUR 22 million that is, let's say, typical for this period of the year due to the billing seasonality.

And then, of course, this more than EUR 1 billion of operating cash flow has fully covered the CapEx executed in the period of EUR 827 million and has also covered part of the dividend paid in May of EUR 350 million.

So all of that results, of course, in a variation of net debt that is impacted by the acquisition for, let's say, the debt and the price paid for the acquisition of 2i Rete Gas. So I think now we can move forward to the plan, back to the plan in order to comment the financial of the strategic plan.

First, let me comment on that, let's say, broad picture. Our plan has the target to deliver a 10% EPS growth that has been, let's say, made possible by a disciplined capital allocation between the different components of our CapEx plan, an improvement in the level of efficiencies. And all this, of course, make the shareholders benefiting through the dividend policy that we will comment later on.

So the 3 pillars are investment plan, of course, upgraded and increased by more than 5%, 5.7% compared to previous year, out of which the technical component reached EUR 10 billion compared to the EUR 9.1 billion of the previous plan.

Second, very important, already commented and discussed the operational efficiency and extra revenues coming from the investments. that have been improved by more or less 25% compared to last year.

Finally, but very important, the strength of our balance sheet. This is, let's say, supported by an increase in the level of operational cash flow aggregated for the whole life of the plan of more than 7%. Of course, this has made possible the full coverage of the technical investment done during the period, the payment of all the dividend. And of course, as usual, there is headroom for tenders and potential M&A activities.

So this is not to be commented because we discussed at length, but help me to explain this one, so the development of the RAB. The development of RAB as usual, let's say, clarified with tender and without tender. If you look at the figure overall, including the tender, we are moving from EUR 10.2 billion reported '24 to a level of EUR 20.3 billion, of which 90% is gas -- Italgas distribution in Italy. If we exclude from the tenders from the numbers, the overall RAB is expected to reach EUR 18.9 billion with an average CAGR of 9.2%.

Of course, tenders will contribute to EUR 1.4 billion additional RAB to the figures that I just commented of EUR 18.9 billion.

The increase of RAB compared to last year plan is upgraded. If you look at the RAB, if you remember the level of the RAB in 2030 or last year plan, there is a difference with the lending number of 2031 of around EUR 1 billion. This is, of course, due to the increased level of CapEx of this plan and also there is also the impact of the deflator that we have already explained.

Talking on the right side of the redelivery point, also in this situation, we can consider the number including the tenders, and we have a CAGR on the plan of 10.1%. If you exclude the tender, the number is 7.8%.

Talking about profitability, we have seen increased level of investment, capital allocation, increase of RAB revenues drive to an increase of EBITDA. The rate of a CAGR of EBITDA is more than 12% higher than the RAB CAGR, meaning that we have also the possibility to have an extra growth due to the extra activities and investments that we are planning into the plan and also the efficiencies.

We have done, let's say, a segmentation in order to give you the starting point of EUR 1.35 billion, the intermidpoint that will be the guidance for '25 of EUR 1.87 billion. And then the landing point at the end of EUR 3 billion of the EBITDA. Of course, most of this -- the large part of this increase is linked to the inclusion of 2i Rete Gas as expected.

Another important portion is linked to synergies, efficiencies and AI. And then we have the contribution of the tender, of course. Let me say that out of the EUR 3 billion at the end of the plan, the gas distribution of the -- Italian gas distribution will have 80% of, let's say, contribution to that number, 6% will be the contribution of Greece, while ESCo, Water and other will account for 6%, same number, 8% the tenders.

On the right side, you have the evolution and the trajectory of the OpEx cost basis in, let's say, as a starting point, we have here the 2024 on the '23 that we have commented before. Of course, you see the increase due to the consolidation of 2i Rete Gas, cost linked to the tenders and the synergy and efficiencies that, let's say, contributed to the reduction arriving to the level of 2031.

All that allow us to make a projection of the EPS jointly with the financial charges that we will comment soon. So the EBITDA expansion, financial discipline, driving a double-digit growth of 10% throughout the plan. We start from a level of EPS adjusted for IAS 33 of EUR 0.59 in 2024.

And approaching the end of the plan, there is also a very important year, the 2029 year in which the net income will exceed EUR 1 billion. So it is considered a very important achievement, of course.

All that is, say, possible also due to the financial strength of the balance sheet, the third pillar. And this is the clear evidence of that. If you look on the left side, you have the maturity profile of our debt, very well spread all over the years of the business plan. Our financial strategy is focused on, of course, maintaining a solid liquidity buffer, have a mix of fixed and floating rate around 70% and 30% and increase the duration through the issuance of the new bonds in the plan.

The strong, let's say, the improved cash generation profile allowed us to achieve in the plan the level set and agreed with the rating agencies 1 year earlier than projected last year in the plan. So we are now able to meet the 65% threshold not in '28 in '27. This is a clear situation of deleverage that allow us to have financial flexibility in our plan.

You see on the right, the evolution of the credit ratios, net debt over RAB will end at the end of 2031 more or less at 60%, but clear deleverage starting from now. And also the funds from operation over net debt has a very positive and incremental trajectory. The result of this strategy is a cost of debt that, of course, will evolve during the year due to the refinancing of the maturities of older bonds, but we remain well below 3% throughout the plan.

So finally, let me recap and give you the guidance. For the current year '25, supported by the result of the third quarter, we are improving our guidance with adjusted revenues of EUR 2.5 billion versus previous EUR 2.45 billion, adjusted EBITDA of EUR 1.87 billion versus a range that we gave of EUR 1.85 billion, adjusted EBIT of EUR 1.19 billion versus previous range of EUR 1.12 billion, EUR 1.16, while we are confirming our expectation in terms of technical CapEx around EUR 1.2 billion and net debt, excluding IFRS 16, around EUR 10.8 billion.

Jumping to the final year of the plan 2031, including tenders, we are projecting revenues of approximately EUR 3.8 billion above the previous plan of EUR 3.6 at the year before 2030. EBITDA of EUR 3 billion above the previous 2030 level of EUR 2.8 billion, EBIT of EUR 2 billion above the last year plan of EUR 1.8 billion in 2030.

The intermediate year 2029 will have revenues for EUR 3.4 billion, EBITDA of EUR 2.7 billion and EBIT of EUR 1.8 billion. RAB will surpass EUR 20 billion, EUR 20.3 billion versus EUR 19.2 billion of the previous plan ending in 2030.

The leverage, as discussed, is improving and will end, as I said, at 60% at the end of 2031. Now I give back the floor to Paolo for the dividend policy.

Thank you. I'm going to the end. The last but not least, the dividend policy. And I'm closing that. I will leave just final remarks on slide, and then I will open the floor for questions. Let me say that has been approved yesterday by our Board of Directors, and we decided based on the results of the 9 months based on the plan that we have approved to extend the dividend policy up to 2028, maintaining the same payout ratio, 65% on adjusted EPS. And we have just changed the floor -- so instead of starting from 2023, we started from -- we use 2024 DPS as a reference point and with an increase of 5% per annum. It's not insignificant.

Anna Maria will tell me that the number is not 5%, but I disagree with her, but that I will mention also Anna Maria point of view. I think it's not insignificant because not only we extend the dividend policy by 2 years, but we significantly increased the reference point. But I also would like to remind you that in the past year, we have never, never used the floor. So our result has been always above the floor and the increase provided by the floor. According to Anna Maria and probably IAS33 for which don't ask me what it is, adjustment, the increase is not -- the increase expected -- the minimum increase expected in 2025 is not 5%, but is 11.7%. You know that you know better than me IAS 33, but still, I'm very basic person. So I'm saying I want to guarantee an increase of 5% over the last dividend that we paid this year over 2024 result. That's the end of the presentation. Thank you for your patience. It has been quite long, but we are here for -- to answer to any question you may have. Maybe not all of them, but some of them, yes. Thank you.

So thank you to everyone. [Operator Instructions] James for a long time. So we start from the back there, James Brand. James, if you can stand up and...

It's James Brown from Deutsche Bank. I wanted to just, obviously, a very impressive plan and a lot of synergies and cost efficiencies that you're delivering. I just wanted to ask what you're assuming in terms of any potential regulatory clawback at some point? Because as I understand it, there's a cost review that will be coming in 2027 for 2028. And there's also this whole debate about do we switch to like a TOTEX system, but nobody seems to know exactly what that will mean at the moment. So I was just wondering, I guess, what you've assumed in your plan? And perhaps it's impossible to know, but maybe you could just talk us through a little bit how you think about the risk of getting some of the cost efficiencies claw back from you and how you think about TOTEX. And that was kind of going to be one question, but I think it's probably about 3 already. So I'll leave it at that, and I'd be very grateful to you.

Let me say that we are more than happy to give our efficiency for a time horizon back to the system. It's the way to repay institution to repay our customers, to repay the market. Just to give you a number, and then I will go back to your answer. Just to give you a number. In between '18 and '24, we gave back EUR 300 million to the system. So I think that is the game. I think we have demonstrated in the last 9 years that no matter we give the money back to the system, we are able to achieve better performance. And we have never changed that approach. So let me say, the focus on cost efficiency is one and then the regulatory is another one. But I -- the whole management is focused on cost efficiency, forgetting that the regulatory period will somehow later asking something back.

To your point, what we have assumed in the plan, we have assumed an X-factor consistent with what we have experienced up to now. So we have already embedded in the plan less revenues as a way to give this money back, this efficiency back to the system. And regarding '28, '28 is difficult to shape because, as you know, there will be a new system, the TOTEX, we call ROS, but it's the same. I think that will change the rules of the game.

For us, we see an opportunity because we can become even more -- we can even more implement an industrial approach because you mix altogether OpEx and CapEx and you make -- and you decide based on which is the best solution for you as an industry to allocate, let me say, money on the OpEx or on the CapEx. But because we don't have -- because there is no consultation yet on the market, we don't know how the regulatory body will shape the ROS. We know the general terms of the ROS. So what we have thought about is it's another opportunity for us to be even more efficient. But in the plan is embedded and X-factor similar to what we have experienced up to now.

We have Julius there.

Julius Nickelsen from Bank of America. Two questions on the synergies and then just one clarification. The first one, I mean, I understand that the last time you put out the EUR 200 million, this was before you actually run the assets and now you upgraded it. Is that number now here to stay? Or are there any surprises left where you think some areas in the business that could still bring some more synergies? I don't want to be greedy. And then in terms of what have you already achieved in 2025 and what is left in 2026? I see you saw the EUR 14.6 million of cost synergies in this quarter, but could you maybe give a little bit more precise split? And then lastly, just to have ask, I assume these numbers assume that the allowed return will stay at 5.9% for the plan.

Okay. Starting from the last question, we have assumed that 5.9% will remain. So we assume flat WACC. Regarding the first question, we have already presented -- we just presented a new plan. Now you are asking me, there is something more. We need to wait 1 year and maybe we will find something more, not now. I think -- but apart the joke, I think that what we have done, thanks to -- mainly to Pier Lorenzo because he has run all the -- and the other team has run all the detailed analysis.

We were able to build on a bottom-up basis really the -- all the activities that are needed to be put in place in order to achieve the synergies. So while 1 year ago, we were -- we made more an approach top-down saying, okay, what we can achieve, what with a similarity of the results that we have achieved in the past in Italgas Today, we are here and we say EUR 250 million that again, it's a round number, but it's EUR 252 million. So if you want, you can get another EUR 2 million on top of that. It's a true number based on all the detailed activities and results that we expect to achieve. What has been already achieved in '25 is the number that you have seen. It's a combination of synergies and ongoing focus on cost cutting.

We cannot -- from now on, we will not be able to separate what it was if we were alone and what it is now because now 2i Rete Gas is not an entity anymore since July 1. So you should look at the numbers as the total -- so our ability to continue to reduce the cost, our ability to produce synergies, I would say, mainly in the traditional and digital part. AI will come later. It will not come. We'll probably see some numbers in '26. But as you have seen in the curve of the graph, it will come later. But I cannot tell you, if you are asking me in '26, what are the synergies, what you have -- it's impossible because now the company is one company, the organization is one organization. So I will be focused on what we will be able to achieve as a cost cutting and synergies in comparison to what was the baseline in 2023.

We have Francesco,

Francesco Sala, Banca Akros. Congratulations for your results and the presentation. The first one is on the -- your inflation assumption, especially for the RAB until 2031. The second is what makes you think there's going to be a pickup in tender activity in the next few years? And if there is any evidence you have to back this assumption or if something has changed in the last few months? And thirdly, you wish that there were more opportunities in the water segment, but there have been very few in the last few years. I wonder whether you think something is going to change in this regard in the next future?

The first one, I mean, we have assumed on the long run an inflation rate of 2%, very simple. So we were not so creative. So we just flat the inflation to 2%.

On the tender side, we have seen a 2025 that probably has been the best year ever since the launch of the tender in terms of number of the tenders that has been awarded and tendered, '26 look similar. My point is, and probably you have read on the newspaper, my point is that as the Ministry [indiscernible] said, tenders process need to be reviewed. And I think the point is need to be reviewed in terms of size of the tender, so increase the size of each single item, reducing the number of items. And on the other side, having let me say, an institution on an authority that authority is not the right term. A body that is running the tender that is more effective, can be local, can be regional, can be central, but should run the tender. The problem is as of today is that there are so many that have not taken this as a clear commitment to run the tender and to complete the tender.

What you said on the water distribution is true. You said few, I would said 0 opportunity. I will make it few to 0, not only, but each opportunity, we need to look very carefully because we don't want to have an opportunity that is not an opportunity that is a problem. So we will look only if there are serious opportunity in the market. As of today, there is none. But on the other side, the plan will continue to deliver better quality of the service, less leaks, operational efficiency in the perimeter that we have acquired from Veolia.

So we have...

We will answer to all your questions. So don't worry.

Okay. So Aleksandra there and then we go in the line.

Aleksandra Arsova from Equita. So 3 questions on my end. The first one, so again, not to be too greedy, but maybe on dividend since you provided an improved growth profile, faster deleverage. So I'm thinking maybe is there any room maybe next year to further improve either the payout or the growth in EPS? This is the first one.

The second one is maybe more a curiosity. You are mentioning the potential changes to the concession regulatory framework. But if this -- the timing of these changes, I mean, are quite uncertain. And so I was thinking maybe on the other hand, is there any possibility or is it viable from an antitrust point of view to do further M&A in Italy, maybe many bolt-on M&As?

And the third one is a follow-up, a clarification on the unitary OpEx tariff. So you said previously, if I understood it correctly, that you assumed the X factor, which is similar to the one you have at the moment. But if I remember correctly, the consultation paper under review currently assumes a lower X factor at least for '26, '27. So you are more conservative at the moment vis-a-vis the proposal by ARERA?

On the first question, you know the answer, so I don't answer to you exactly. I said that I don't know how many times. I think -- and I'm -- on that point, you can be flexible. But the point is that with that dividend policy that we applied over 9 years, we were able to acquire 2i Rete Gas. So the answer is there.

On the second one, there are many discussions around tender and concession. I don't think it is viable to extend the validity of the concession because the concession has been expired in '12. So it's strange to because somebody is proposing to extend the concession. But the problem is different. The problem is tenders have been set 13 years ago. The process didn't work. I think we need to face this situation and try to solve it.

Further M&A, while the tenders are going on, you will be scrutiny again by the antitrust. And as of today, there is nothing again on the market. for the OpEx. We have used the -- for '26 and '27, we have used the numbers in the consultation, but then from '28, we use a flat number higher than the ones for '26 and '27.

And then Fernando. Okay.

First question is regarding the slide in Page 19. This is related to the time line of cost savings. I mean I was doing a visual calculation there. It looks like you are getting around 50% of the cost savings already in 2026. My question here is this is something that you expect in 2026 or maybe more end of the year. I'm saying this is because this could have significant implications of next year earnings. So that is my first question.

Then second question, I think that you say that you assume a flat WACC for the period until 2031. So there, I would like to know what is your expectation in terms of the activation of the trigger mechanism for next year. I assume that you don't expect it, but you can clarify.

And a follow-up question on that is France lost the AA rating in October. I would like to know your opinion on what has to be done in this scenario? And what could be the implications for the sector?

Always remember, you referred to Page 19 that this number is as a reference of 2023 cost. So part of that has been already achieved in '24. Part of that will be achieved in '25. So the '26 is already a cumulative number that takes into consideration what was already achieved. It will be, as you see, mainly traditional in '26, some digital, and they represent about, let's say, 40% of the total.

On the second one, we have -- on the WACC, we have assumed, as you said, flat period, so trigger will not apply according to us also because France should be out of the reference country because they lost the AA rating. They are now in A+. So according to the regulatory framework that set the characteristic of the countries to be compared with, they said they should be AA countries. France is not anymore AA countries. So I think that is my -- I mean, reading the paper of the regulatory and applying just in a very simple way.

Last year, France was probably still considered because if you remember last year, France was AA-. So they still have the AA somehow. Today, 1A is lost completely. So they have A+ only. Next...

We have Sarah there. Yes, Alberto, [indiscernible] to you.

Sarah Lester from Morgan Stanley. And I really do apologize one more on synergies, and then I think we'll stop on the synergies. '27, '28. So tying a bow on, I think it's Slide 15, 19 and 20, it feels like you're in the ballpark of EUR 180 million in '27, 2028. Just doing a sense, check if they're kind of sensible numbers. And then I also have a high-level question on future mapping. You're obviously incredibly strong at extracting value from acquisitions. Would you consider expanding outside of Europe?

If you go back to page -- page, I'm coming to Page 20, you will see that by 2028, the majority of the synergies that are EUR 180 million are reached, not all, but a significant portion of that. So you're right.

The second question is relevant to potential acquisition. I'm not saying nothing about that because it's -- we don't have anything in our end. I always say which are the principles that drive us. First of all, Europe is our area of interest, of course. But the second point for which we look at the outside Italy are, first of all, macroeconomic scenario of the country and then even more important, the regulatory framework. That is what we did in Greece. At the time, macroeconomic scenario was not looking very good, but we saw at the time, significant signal of improvement. So we strongly believe at the time that Greece, and we were right, would come out of the situation that they were and now they are in a very good macroeconomic condition.

And the second element, even more important, regulatory framework was very stable, was clear, was similar to our. So those are the 2 elements that we normally look before considering anything outside Italy. Europe, of course, is the best area where we would like eventually to invest if the 2 conditions that I mentioned to you are met. And there is somebody that is willing to sell, of course. There is no one that there is no interest.

Yes, so Christabel. There?

Chris from UBS here. Just one question on the financing strategy. I noticed that this time, you're aiming for a fixed floating ratio of 70% to 30% and an increased duration. Can I assume that that's reflective of your view on where interest rates are going, cost of financing for Italy and for Italgas going forward?

Yes. I think if I well understood your point, the strategy is based on the expected structure of the rates in the future, of course. In this plan, we are assuming a level of the fixed rate more or less stabilized on the current levels, while we are expecting a decrease -- a sharp decrease in the short-term rates. For this reason, the ratio changed a bit from the previous 20% to 80% to 30% to 70%, meaning that we will go more for, let's say, short-term or variable rates that could be also a long-term fixed rate swap into a variable in order to take benefit of this situation of the rates. And the combination of the 2 situation, coupled with also the increased duration will result in the level of cost of debt that I have commented in the slide. Next.

Alberto de Antonio from BNP Paribas. My first question will be on Greece. You have given the targets for 2021 in terms of revenues, EBITDA and RAB. Maybe could you disclose what your assumptions behind in terms of WACC inflation, X-factor or any additional potential revenues? And my second question will be regarding the biomethane opportunity. And let me understand if -- are you investing directly in any plans or how this business works and how this is going to impact your company in terms of maybe CapEx, potential additional revenues or just decarbonation of the molecules?

Okay. Regarding Greece assumption, if I well understood, we have assumed similar to the overall plan, flat rate, flat interest rate, flat allowed return similar to what we have today. There may be some correction over time, but we don't think this is going to be significant. That was the assumption that we used. and inflation as well. So we use the same numbers that we are using for Italy, we use also for Greece because, as I said before, the 2 countries are very similar today as well as the other.

Regarding biomethane, what we have assumed in the biomethane, maybe Pier Lorenzo can elaborate a little bit more is not that we are investing in biomethane production plant, but we are making the connection easier for them to accelerate the development of biomethane new plant and the connection. Maybe Pier Lorenzo can say a little bit more about our approach in how we can help biomethane production plant to be connected.

Yes. As Paolo anticipated, we see biomethane not really as an opportunity to invest in directly, but as a gigantic opportunity for our country to address the decarbonization of the end user and consumptions together with the security and supply because biomethane, we have to remember here in U.K., you have a lot of production as well, is made locally. So looking at Europe as a whole continent, which is strongly dependent on importation of gas, biomethane production can mitigate this issue concerning security of supply.

So all in all, our approach here is to promote the development of the industry in Italy, facilitating, making easier to connect these plants to the local grids. And we do that, we have done in the past, and we will do more and more by streamlining the design of the connections so that they cost less and less and by investing in reverse flow projects. The main issue that can arise in a project of connection of biomethane to a local grid is the fact that the local grid at the exact site where the developer of the plant wants to install the biomethane plant is not fully capable of receiving the entire amount of production of gases in every hour of the year, especially when the demand is very low.

So thanks to reverse plants, we can debottleneck the local network so that virtually we can -- or really not virtually, we can connect any kind of biomethane plants wherever the developer wants to develop the plant. And connecting a biomethane plant to a local distribution network is definitely less expensive than connecting the same biomethane plant to a transportation network, which is run operated at definitely higher pressure, so they need compression and blah, blah, blah.

So we have to promote and we want to do that, the connection of biomethane plants to local low-pressure distribution network. That is our aim. Of course, we reflect all these in our CapEx investment plan in terms of CapEx strictly related to the connection of the plants. So pipes and pieces of equipment that we need to connect.

Ella from Citi.

I have 3 questions, if that's okay. First question is to do with the WACC trigger. The WACC trigger. -- if it is triggered, can you just give us a sensitivity of us know how the earnings would be impacted if there was a downside trigger. My second question relates to AI synergies. So I remember in the last plan when you were discussing your EUR 200 million synergies, you said that EUR 80 million were going to come from AI synergies. And then in this plan, it's more like EUR 70 million. So can you just talk about the difference there in terms of the EUR 80 million and EUR 70 million?

And then my last question refers to the tenders. So you -- in terms of the 247,000 connection points that you're selling, you sold them at a great price, 16% premium to RAB. But if you do -- if we do a quick back of the envelope calculation in terms of your plan, then you have EUR 1.5 billion CapEx for the tenders to bring on EUR 1.4 billion RAB. So it's like 7% premium to RAB. So I was just wondering about the difference there. So why do you think -- I guess, yes, just the acquisition price at a much lower premium versus what you sold at?

The last question we need to interact because it was not very clear to me. Let's start from the first one. The impact of a potential trigger for which we don't believe is going to happen is EUR 45 million. EUR 15 billion of RAB multiplied by 30 bps, that's the impact in terms of less revenues. AI synergy, which -- what is the difference?

Let me say what we said is, of course, pretax revenue, the EUR 45 million is pretax. In terms of AI synergies, let me say that last year, we have estimated between -- I remember, I said EUR 70 million to EUR 80 million, but it's true. We mentioned EUR 80 million because we thought the number came out from the fact that the impact that was generated the digital transformation in the 7 years previous plan that generated a certain number would have been similar or better. The synergy impact would have been similar to what was generated by the digital transformation previous plan, and that the number came out from. So it was not a bottom-up. It was a clear top-down numbers.

Now we were more -- much more detailed in building see -- AI cases and say what is going to happen with the application of the AI. There will be more productivity, less personnel involved, less use of cars and other stuff like that. So we were able to detail and the number came up to be EUR 70 million. So I strongly believe the EUR 70 million is more reliable than 80 million of last year. EUR 80 million was, and I always said was taking as a similarity. But I have also to say that between now and the next couple of years, other AI uses will come up. So I would take this as a floor, the EUR 70 million, and I will not take it as a final number.

Based on the knowledge that we have today, that is the best reliable number we can give it to you with the time frame that we have envisaged. But it's going to be changed. Yes, because AI is something that is evolving. I don't think anyone -- anyone in our industry, but in general, anyone in industry like ours has been able to predict with such detailed way the AI impact on the cost of the company.

The last one I have -- let me just recap, okay? We bought what we bought at a limited premium. And then we sold RAB EUR 218 million with a certain premium higher than what we bought, okay? That's the end of the deal. Tender is another matter. You know the tender we buy at RAB by definition because there is no competition on the value of their assets. So that is the fact that has been reduced the amount of the tender is only due by the delay.

Remember that the number is made of acquisition of existing network plus CapEx that is requested to upgrade this new network acquired through a tender. So the delay in the tender means that there may be some items that are not in the plan period anymore. But if you delay the tender also the CapEx, technical CapEx connected to the tender may be delayed, too. But there is nothing to do with premium. I don't know if I'm clear. Okay.

If there are no more questions from the room, we can take the question from the conference call.

The first question is from Javier Suarez of Mediobanca.

I'm really sorry to jump with questions after a long presentation. So the first question is on the EBITDA margin that is embedded into your plan. That means -- that means an expansion versus 79%...

Can you start again because now your voice is back.

Okay. Can you hear me now? So the first question is related to the expansion on the EBITDA margin to 79%, which is the number that is embedded into your guidance for 2029 and '31. So the question for you is that if you can help us to understand that expansion in the EBITDA margin that is going to be by the end of the plan, significantly different between the old Italgas 2i Rete Gas, Depa and the water business. So further detail on EBITDA marginality between your different activities would be very helpful.

The second question is on the tendering process and what may be done to incentivize and to stimulate the process. So you can share with us any proposal to the new -- to the administration in Italy to make the system more virtuous and probably quick. And if you think that what it is happening or is the discussion for the electricity distribution concession is something that could be replicated to the gas distribution concessions as well?

And the very final question is on Slide 60, when you are showing the credit metrics. So there is a vertical a significant decrease on net debt to RAB and a significant increase in the FFO versus net debt. So the question is, philosophically, where do you think that a company like Italgas should be seated if it is a correct interpretation to say that beyond, say, 2028, the company is maintaining some financial flexibility to capture additional opportunities related to M&A or the tendering process, if that is a correct interpretation?

Okay. Let me start -- maybe start Frank, on the first EBITDA... EBITDA trajectory in the plan. clear, you are right, meaning that it is true that there is a clear direction in terms of improving the EBITDA margin, both for Italian gas distribution. We are approaching at the end of the plan a level of 88% basically. And so starting from a level now that is around 80%. In terms of the same trajectory is also followed by -- in parallel by Enon, by Greece, but on the lower scale, of course, you remember that in the past, we considered Enon as, let's say, like [indiscernible] in Italy, so a smaller perimeter with headroom for improving efficiency. So also Enon will improve the EBITDA margin at the end of the plan, approaching 76%, 78% more or less.

The driver behind that, of course, are the operational efficiency synergies, revenue synergies that we commented, mainly I would say.

Yes. I'm just adding 2 points. EBITDA is growing because the costs are going down. There is a clear difference between -- you remember that we put the ambition of Greece and the ambition Greece, we are on the trajectory of that ambition. But we have always said that because of the size of the Greece they will never be able to achieve the same EBITDA margin that we are able to achieve, thanks to the size that we are having in Italy. But also in Greece, we are using -- we have applied digital transformation. We will fully digitize the network. We are doing that. We are very close. By the end of this year, we will complete that.

AI application will be moved to Greece too, but the scale will determine, of course, a different -- slightly different EBITDA with a margin that is probably lower than the one in Italy.

On the tender side, my only comment probably Javier didn't hear what I said before. The proposal on the electricity distribution is to extend the concession, but concessions are in full force today. So the comparison between gas distribution and electricity distribution is not comparing apple with apple because gas distribution concessions have expired by law back in 2012. We have talked for many, many years about what we can do in order to accelerate the tenders. Our opinion, our position that is shared among the association is that we need to reduce the number of items. So we need to reduce the number of tenders. And we need to have a clear commitment by whoever take the responsibility to run this tender to run this tender because otherwise, you can even reduce the number of tenders increasing the size of the item, but that if no one is taking the responsibility to run the process in in a time manner, then we will be sticking the same situation.

So 2 elements should be addressed. Number of items reduced and a clear and committed responsibility to run the tenders. I think regarding the last question, what we have presented always is deleveraging over time. And as in the past, we have always find a way to use and to invest properly eventually any additional fund we may have in order to increase the profitability of the company. So I would not -- we need to stay below 65%. That's no doubt about that. That is our target because we want to maintain the same rating that we have with the rating agency.

Apart from that, everything else, if there is a room, we will try to use in the best way like we did in the past, available funds.

Next question from the call, please.

The next question is from Davide Candela of Intesa Sanpaolo.

I have just 2. The first one is with regards to the nanometers rollout. It looks like to me that by 2030 and the year after, there could be a little bit of deceleration in the rollout in Italy. I wonder if you can share why is that if it is because you are reaching a certain point that no more should be installed or you're waiting for something and maybe some assumption behind the cost you are assuming in the plan for the rollout of those meter -- and second...

Excuse me, you are talking about rollout, but rollout of what?

Of the smart meter. Sorry for that. And second question, really high level with regards to the data centers. And we have recently seen a potential role of hydrogen with the fuel cell technology in the data centers. I was wondering if you could just share your view very high level and maybe if there is a role in future for gas distributor in there?

Regarding the first one, just to make it clear, the meters that we are going to replace are the first generation, I think Pier Lorenzo said very clearly. So the GPRS, not narrowband IoT, not the latest that we are going to install. That's the reason why we still have EUR 6 million, the combination of 2i Rete Gas and Italgas Reti of GPRS. You know the GPRS is a technology that the telco will probably soon discontinue. So we are planning to replace them. The structure should be very similar, let me say, the impact on our profit and loss and depreciation is exactly the same that we had when we replaced the traditional one with the smart one.

So we expect that the regulator in order to face a situation where at a certain moment in time, this smart meter will not transmit anymore because GPRS will disappear. They will issue a regulation for which to encourage the operator to replace the GPRS with new ones. That's the reason why there is EUR 6 million on that.

Regarding use of hydrogen for data center, if that is the request, honestly, I don't have an answer. So I don't know how to use hydrogen in the data center, if that is the question that I understood.

Next question please.

The next question is from Bartek Kubicki of Bernstein.

Congratulations. I hope you can hear me well. A few things from my side. First of all, on the regulation as such. As we remember, there is quite some volatility with regards to gas distribution regulatory framework in the last couple of years, unexpected WACC cut, OpEx cut back in 2019. My question is, what are the key -- in your opinion, what are the key upsides and downsides from the regulatory point of view to your business plan not included in the business plan? And I'm not talking about the trigger mechanism, something which is out of the common discussion, including here the potential remuneration of the smart meters of the existing smart meters and the faster depreciation of those existing smart meters.

Second thing, I would like to -- just a clarification on your leverage. Of course, you will degear very quickly from, I suppose, more than 70% net debt to RAB to 60% net debt to RAB into 2031. Just a quick question. What do you assume with regards to the famous Rome concession? Because I remember there was always some kind of EUR 0.5 billion potential payment to keep the Rome concession for longer. What do you assume here? I mean, is it still assumed in the business plan or not anymore?

And the last point on your synergies and efficiencies, will it cost anything? Meaning I know that you said there will be no redundancies, but will you be incurring any additional restructuring costs to get to those synergies?

First question is, honestly, what I can say is that for me, '26 and '27 is very clear the regulation. So we don't expect no upside, no downside. Then from 2028, there will be the ROS taking place. In the ROS, we may see maybe some remuneration of the fully amortized asset, for example, similar to what currently Enon is enjoying if they keep in proper operation, fully amortized, fully depreciated assets. That's one element, but it's not so -- it comes to my mind. But generally speaking, the ROS application or the TOTEX application starting from 2028 for me, from the vision that we have, it could be an upside from an industrial point of view for Italgas in a sense that to be constrained OpEx and CapEx will be one single box in which you really leverage your capability in managing network and deciding which is better to spend in OpEx or to spend in CapEx, depending which is the best result from an industrial point of view. So if I look at the framework, I welcome the ROS, the TOTEX framework coming because it will give us more opportunity to use our industrial competence in order to increase our results. I'm just closing on the third point, and then I will leave the floor to Gianfranco for the Rome concession. I said no redundancy. We didn't any redundancy in the past. There's no cost associated. We don't have any redundancy. Our goal is today, and we have already started is to start reskilling our personnel in order to handle different kind of process and different kind of activity.

We don't have to wait AI to be massively used. We need to do it now, and we will do it now in order to be ready when the AI will be used in a more extensive way to be able for our personnel, for our colleague to take other jobs consistent with the new organization from one side, the new process from the other side. So there is no cost associated. There will be no redundancy at all.

On the Rome concession, the assumption in the plan is very straightforward because we have a receivable for around EUR 300 million in our balance sheet. Simply the business plan assumes that this receivable is paid during the plan. Consider that the other important assumption is that we are assuming in 2028 the taking of control after the tender of Rome of the concession. So this payment can happen before this date or I would say at the latest at this date. So you will have the cash in the cash position during the plan.

The impact of deleverage, EUR 300 million over EUR 11 billion of that is..

Not meaningful.

Exactly. But the assumption is that by -- in 2028, the concession, there will be a tender completed. Our assumption is that the Comune di Roma will continue to keep the ownership of the existing infrastructure by them and that is what is inside the plan.

May I just ask one more clarification on point number one, please?

Please.

Yes. Regarding the smart meters and the remuneration of the quicker depreciation of the currently existing smart meters. How confident are you that the regulator will be happy to allow you for another smart meters rollout while you have basically just a few years ago completed the smart meters rollout, which costed you probably EUR 1 billion plus. So there's additional kind of investments going into the network, additional, let's say, impact on the customers' bill. So how are you -- how confident you are that the regulator would be happy to approve a similar scheme to what we had back in 2019, '22?

It is not a matter to be happy or not happy. It's a matter that if GPRS will be discontinued. We will have 6 million smart meter not working anymore. So it's not a matter to be happy or not happy. It's a matter to understand the reality and say, okay, the previous smart meter that was developed and installed back 12 years ago, now has to be replaced with new ones because technology has changed. So the happiness should be -- there is a new technology that is much better than the old one.

And of course, they have to consider the loss of depreciation. But consider, as I said, the first smart meter were installed back in '13, '14. There will be not a significant amount of depreciation to be paid.

Thank you, Bart. There are no more questions from the conference call. I reckon everyone here has been asking a question. IR team is available. So thank you, everyone.

Thank you. Thank you for coming.

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Italgas First Half 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Anna Maria Scaglie, Head of IR of Italgas. Please go ahead, madam.

Hi. Good morning, good afternoon to everyone, and thank you for joining us. I'm Anna Maria Scaglia. I'm here with Mr. Paolo Gallo, our CEO; and Mr. Gianfranco Amoroso, our CFO. We will address any questions at the end of the call. And while I leave the floor to our CEO, Mr. Gallo, I invite you all to read the disclaimer at the end of this presentation.

Good afternoon to everybody. Let me start this presentation. Let me start with the result that probably you have already seen that we published this morning and were approved yesterday afternoon by our Board of Directors. And I will comment the results and the integration of DE Rtagas, and then Gianfranco will help me for the financial part, and then we will open the questions. So we are on slide on Page #2.

First of all, let me clarify that the first half of 2025 contains the first 6 months, what I call the old Italgas and 3 months, so the second quarter of 2i Rete Gas, considering that the acquisition of 2i Rete Gas was completed on 1st of April 2025. If you look at the number, and then we will get into the details, gas distribution revenues grew, thanks to the -- first of all, to the RAB growth, thanks to the investment we made last year to the update of the OpEx to the RAB reevaluation factors that were introduced, both of them were introduced by the ARERA to cover mistakes and different evaluation made in the previous year.

And the overall -- so our RAB growth, thanks to the investment, review of the RAB reevaluation factor and OpEx update offsetting -- completely offset even more the reduction in WACC compared to 2024.

The other, let me say, 3 area of business, Greece, Water and ESCo, all of them contributed significantly to our results. and they have shown better results in 2024. The other element that I would like to underline that you can see here are the cash flow. The cash flow of these 6 months was significant, EUR 740 million.

The operating cash flow allowed us to cover all the CapEx, and we cover also the majority of the dividend that we paid in May. You also see that the net financial position significantly increased, and that is thanks from one side to the acquisition of 2i Rete Gas, the equity that we paid to the shareholder of 2i Rete Gas as well as the debt that we inherited from 2i Rete Gas, partially compensated by the EUR 1.02 billion capital increase that we completed successfully in June.

If we move to the next page, we have underlined 2 elements, the operating corporates major element and the regulatory highlights. First of all, let me share my satisfaction from one side and my gratitude to my colleagues, both of Italgas and 2i Rete Gas to have closed the integration, the merging in only 3 months.

if you think about 90 days, it's really a short period of time. I will show you that has not been just, let me say, legal merging. It has been much more than that. The numbers that I will show you in a couple of slides will show you -- it's a demonstration that the effort that we put in order to reach this goal.

But of course, the merging is not only -- is not the final objective. It's just the beginning of a much interesting and greater journey. In the meantime, we have completed the capital increase in June, as you know.

Just to remind you some number, EUR 1.02 billion rights issues, EUR 98.7 was completely subscribed within the end of the period. The remaining 1.3% right issue were sold in the market session of June 23, and it was sold within not even an hour, less than that.

So the rights issue was fully subscribed with no intervention by the banks that supported us in this transaction. With that EUR 1.02 billion capital increase, we already repaid the EUR 1 billion bridge financing that was given to us by the banks.

And the remaining EUR 1 billion dual tranche bond that was issued in March was already used to pay the equity price to the 2i Rete Gas shareholder.

Finally, stay on the financing. The credit rating BBB+ was confirmed by Moody's and similar rating was issued by Standard & Poor's. Regarding on the regulatory side, we have already talked about in the first quarter, the OpEx and deflator revision that covers the past, but for which we take advantage in the first quarter already. Two other updates that are significant. On May 30, regulator announced its decision to extend by 2 years until the end of 2027, the current regulatory period with the aim to introduce in 2028, what we call in Italy ROS system, but this is the totex system.

As of today, we don't have details about that because we expect a public consultation as usual, either for the extension and for the totex application for the extension before the year-end, of course, and for the totex application probably at the beginning of next year.

Regarding the process of disposal, we received expression of interest by July 14 as per the deadline, and we expect to receive binding offer by early September. So currently, the companies that have expressed interest in acquiring our assets have already got the assets to the data room as well as they have to go through an on-site visit to inspect assets that are subject to disposal.

So just to get to the point, we -- as you see, we have achieved solid results in the first semester, and we are continuously working on the remaining 6 months of the year to fully integrate 2i Rete Gas in our organization. As you know, we will have more view about the years to come in October when we will present end of October, when we will present our strategic plan together with the -- let me say, the 9 months results.

I was telling you before that I wanted to go through in more detail about what we have done between April 1 and end of June to show you the effort that we put in order to achieve this exceptional result of merging 2 large companies in 90 days.

So from an organization -- field organization point of view, you can see on the right part of the slide, the significance in terms of increase of our presence in Italy. I wanted just to remind you that the number of kilometers that we inherited from 2i Rete Gas is similar, slightly bigger than Italgas Reti.

They have less final customer than us because they are more concentrated in the country side of the country itself. As you can see, the number of areas, they have increased from 3 to 5, the number of apps from 14 to 21 and the number of technical units from 50 to 80.

So that means that we significantly increased our presence in -- throughout the country. Another important thing to mention was the IT integration. You know that we are on cloud, and then I think it has been a great advantage for us to be on cloud because we were able to migrate billions of data coming from 2i Rete Gas into our cloud.

In the meantime, we have ensured 100% service continuity and data protection. To arrive to this kind of technical organization, what we have done is in the 3 months' time, we have provided more than 60,000 hours of technical training because on July 1, all the 2i Rete Gas personnel have started to operate on our Italgas system, so they didn't have to know how to operate. So can you imagine in 3 months, 60,000 hours of technical training. It's a huge effort. And I'm proud to say that this huge effort was supported by the use -- by extensive use of artificial intelligence in order to have a more quick and more effective training activity.

Work is not yet completed. The majority has been done, but work is not yet completed. We still have task to be completed to be refined in the coming months. And that is the reason why we created 25 working groups, working teams coming from both organizations in order to analyze processes, activities and get the best out of the 2 companies. So we are trying really to leverage the competence and the skills of the 2 different companies in order to make the best and again, improve the quality of the service and improve the results.

As well, we started the plan to fully digitize the 2i Rete Gas network because that represents, as you know, the core part of our integration plan. Let's move into more details of the integration of 2i Rete Gas because, again, I want to mention that 100% of the 2i Rete Gas population was involved in the 60,000 hours of training that I mentioned before.

And if you make just a division, this equal more than 30 hours of training per person done in 3 months. And as I said, we used extensive AI as the way to generate tutorials for the field operation as well as to provide training focused on specific procedure or task. We also launched artificial intelligence chatbot that is supporting us that support the operator in the field in real time to respond to inquire doubts or problem.

And last but not least, we selected and trained more than 140 people in the field that are acting as a focal point in order to support the people in the operation. If we just look at the IT effort that was made during these 3 months, we are able, as I said, to process a massive data migration. We are talking about billions of data. We analyze more than 100 processes and processes and manage 140 application model and more than 400 interface to ensure service continuity.

Regarding smart meters, we were able to migrate all the data and to integrate narrowband IoT with radio frequency technology that is used by 2i Rete Gas. So now we have, let me say, 3 different technology that we are able to manage with the same platform that is the GPRS, the old one that is going to be discontinued very soon by the telco. That's the reason why we have launched the new Nimbus smart meter that will replace progressively this GPRS system.

Narrowband IoT and radio frequency technology are now under the same umbrella. I think that's it for the focus on the 2i Rete Gas integration. I think you can appreciate the effort that both teams have done in the 3 months and the exceptional results that we were able to achieve in only 90 days.

Let's talk about, as usual, about the environmental performance. You will see in the page -- in the following page always the evidence of 2i Rete Gas. It's probably the first and the last time that you will see this difference because, as you know, from July 1, there is no more 2i Rete Gas. There are only Italgas Ri. So we will not be able to show you anymore this difference. So if we start from environmental performance.

As you can see, the like-for-like basis was up by 1.5% in terms of energy consumption, 1.2% in terms of energy consumption versus last year. The increase of gas and fuel consumption was mainly related to lower winter temperature, leading to higher consumption of gas treating because there has been an increase of volume dispatched by the network. This was partially offset by the increased efficiency of our plant. And in fact, if we look at the specific consumption, the specific consumption went down from 1.02 to 0.94 cubic meters per 1,000 of cubic meters dispatched. Electricity consumption was lower than last year due to a higher use of auto produce electricity and increased efficiency.

Finally, if we look at the vehicle consumption, vehicle consumption was slightly higher than last year, mainly due to the number of kilometers traveled for leak detection and that is one reason. The second reason was that there are new areas in Greece methanized where we brought our new infrastructure, and that's the reason of additional kilometers traveled.

On top of this, on the like-for-like, we added the 2i Rete Gas and as well as Aqua Campana that was not in the same perimeter of last year. If we look at the other part of the energy consumption that is the CO2 emissions, that is on Page 7. The main driver of the increase in the like-for-like perimeter, the main driver is the gas leaks.

The reason is driven by 2 elements. The first one is that we have inspected a significant amount of network in respect of last year, nearly 28% more. We have already inspected nearly 100,000 kilometers. So we have already passed the number of our kilometers. So we are already in the second round of inspecting our network.

But what is the good result is that the emissions per kilometer inspected went down by more than 7%. So that means that we inspected more kilometers, but the emission specific per kilometer are lower than last year. And that is the main driver.

On top of that, we added the 2i Rete Gas and the Aqua Campana CO2 emissions. Let's move now to the number. I will go through some of the pages, then I will pass the floor to Gianfranco. Again, revenues, revenues were up significantly. The main contributor, as you can expect, is the 3 months of 2i Rete Gas. But what also is important to look at is the fact that the RAB growth, as I anticipated before, the RAB growth as well as the new reevaluation factor of the RAB as well as the OpEx update that covers previous -- let me say, I would call probably mistake, not in a positive sense that is covering the past not recognition in terms of inflation, mainly in terms of inflation.

So the total amount offset -- more than offset the reduction in WACC from 5.6 to 5.9 percentage. And then on top of that, there is, as you can see, the additional contribution of the water and on the energy efficiency, I'm very proud about the energy efficiency recover from 2024 that has been the lowest year after that we -- all of us expected because of the end of the super bonus.

So overall, this adjusted revenues increased by nearly 30% in the period compared by the previous semester in 2024. Now look about the cost, that is the next page on Page 9. Of course, as you can see on the right side of the chart, there is the cost recorded in the second quarter by 2i Rete Gas. But what is nice to see again for another time is the fact that on a like-for-like basis, we were able to record efficiency by nearly 2%.

And then similar to what we have seen in the revenues, there is more cost in Aqua Campana because we had more revenues. There is more cost in the energy efficiency. We have seen more revenues in the energy efficiency. The good part of the energy efficiency is that we have an EBITDA margin in the energy efficiency that is around 16%. Remember that our target is to reach 18%. So we are close to the target. We significantly increased the result in respect to 2024. Now I will let the floor to Gianfranco. I spent half an hour. So I think it's time to rest a little bit waiting for your questions.

Thank you, Paolo. I'm now moving to Slide 10. where maybe the key takeaway of this page is that the change in the perimeter drove growth in EBITDA and EBIT, but still, the constant perimeter reported a remarkable growth. So the EBITDA achieved a 27.8% increase at the level of adjusted EBITDA with all business contributing to the positive performance.

Of course, as expected, gas distribution, both Italy and Greece were the main contributor to the growth, thanks also to the consolidation of 2i Rete Gas for 1 quarter. Out of the EUR 178.8 million growth that we are showing more than 90% is explained by the transaction -- by the acquisition of 2i Rete Gas, while the remaining is due to the growth of the underlying distribution business, both in Italy and Greece.

On top of that, the additional month of consolidation of Aqua Campana and the growth of the ESCO, as explained by Paolo, drive to most of the EUR 7.5 million to our EBITDA for the 2 activities together. If you look at the breakdown by business area, you will appreciate that the great majority of EBITDA adjusted is related to the Italian distribution. Enaon contributed for EUR 70 million, while more than EUR 22 million came from ESCo and Water business together. If we now look on adjusted EBIT on the right side, the increase was almost 39%, reaching a level of EUR 558 million in the quarter in the 6 months, mainly driven by the EBITDA increase of EUR 186 million that I have already explained and then higher D&A for EUR 30 million, mainly related to the consolidation of 2i Rete Gas.

On a constant perimeter, the well-known positive impact of the termination of Rome concession has been partially offset by the carryover of the CapEx executed during the previous quarters.

Now moving on Slide 11. The most important thing is that net profit adjusted reported a growth of double digit, reaching a level of EUR 316 million, which is an increase of 31% versus last year. This was mainly driven by the operating performance with the EBIT that we have already seen of up to EUR 156 million, partially offset by the increase of adjusted net financial expenses of EUR 44 million.

This amount includes, first, the cost of the debt related to the acquisition of 2i Rete Gas consideration, so the equity of the transaction. That has to be splitted among the bond that we issued in the first quarter of EUR 1 billion and the bridge financing of EUR 1 billion that was drawn at the closing and was reimbursed entirely with the rights issue.

Second element is the cost of 2i Rete Gas consolidation, let's say, the consolidation of 2i Rete Gas indebtedness. Third, the interest related to the higher cost of new bond issued during 2024, so the carryover of the 2024 bond issued. During the second quarter, the capital increase of EUR 1 billion was completed, as you know, at the end of June while the acquisition was closed on April 1.

This implies that during the quarter, there was a peak of EUR 1 billion higher net financial indebtedness compared to the level reported at the end of June. The other minor element is the contribution from equity investment that was marginally lower around EUR 1.4 million compared to last year. And finally, higher adjusted taxes for EUR 32.5 million due to the higher taxable income and consequently, a tax rate of 28% that is marginally above last year level of 27.5%, also due to the higher quarter or net profit generated in Italy versus last year.

Remember that in Greece, the tax rate is marginally lower and higher interest expense nondeductible for ERA purposes. Moving quickly to Page 12 because it's just a recap of the results adjusted in the semester with the growth rate that we have already commented previously. While on the following Page 13, you can see the impact on the nonrecurring item.

So the first is the EUR 54 million of adjustment in the revenues in line with what we have reported in the first quarter and related to the positive impact of Resolution 87 concerning the allowed OpEx for the period 2024 rectified by ARERA.

In addition, the new one are the EUR 21.7 million of nonrecurring costs related to the acquisition and the integration of 2i Rete Gas, including also cost reported in the net financial expenses and the related positive tax impact.

Now about the technical investment, so our CapEx. As you can see, we have reported EUR 495 million CapEx during the period that are EUR 141 million or 40% higher than last year. Out of this EUR 141 million, more than EUR 100 million are related to 2i Rete Gas consolidation, mainly related to network upgrade and the digitization plan setup that is starting. And during the same period, 430 kilometers of new network were installed, of which 168 in Greece.

So as I mentioned before, we have also started the preparatory work for the 2i Rete Gas upgrade -- network upgrade and digitalization. If we move to the following page, you have the cash flow that we have reported in the semester. The performance was very positive with a very solid cash flow from operation close to approaching to the level of EUR 740 million, which allowed us to cover entirely the net cash investment in the period of EUR 486 million and the majority of the dividend paid in May of EUR 330 million.

Both cash flow from operation and free cash flow include the contribution of 2i Rete Gas for the 1 quarter. If you look at the working capital, positive evolution in the period is a consequence of the positive billing seasonality and the expected positive effect of super bonus related tax credit utilization, partially offset by lower tax payable.

So the increase in the net debt of EUR 4.2 billion is mainly the consequence of the price paid for 2i Rete Gas, EUR 2.71 billion and the related net financial debt of less than EUR 3.1 billion, of course, considering the capital increase proceeds of EUR 1 billion that we have completed in June. In the backup, in the annex of this presentation, you can find also the details of the balance sheet where the main, let's say, discontinuity is the capital increase and the asset and liabilities for the acquisition reflected on the asset and liability side.

Lastly, on Slide 18, we have now finally the debt structure combined, including also the maturities, as you can see, also the maturities of 2i Rete Gas, not only Italgas being a single company.

So we closed the first semester of 2025 with a net debt of EUR 10.97 billion, including IFRS 16 or EUR 10.86 billion, excluding IFRS 16. The financial structure remains, as you can see, very consistent with the past with our target structure with 86% of debt at fixed rate that give us visibility to our cost of debt going forward.

Following all the transactions that we have put in place, including the acquisition, of course, the average cost of gross debt is around 1.95%. As we -- well as we noted that following the closing of the capital increase, Moody's and Fitch confirmed the credit rating applied to the combined rating and Standard & Poor's issued for the first time a new credit rating on Italgas at BBB. With this point, I finish, and I open the floor to the Q&A.

[Operator Instructions]

The first question is from Sarah Lester of Morgan Stanley.

I've got 2 questions today, please, and they're both related to the tenders in Italy. Just firstly, wondering if you can just please talk a little bit more about the current or the in-progress tenders and your expectations for the tender pipeline from here on.

I suppose, in particular, how it relates to that EUR 1.1 billion tender CapEx guide from your strategic update last October. And then just secondly, please, wanting to also confirm that there's no prevailing antitrust issues with respect to the tenders given the backdrop of the antitrust process earlier this year that was related to the acquisition.

Regarding the -- your question, if we look at 2025, so I'm just trying to look what is happening right now because it's more difficult to have a view for the coming years. Currently, we have 5 tenders for which we have already presented the offer. Three of them were presented the offer in 2024, and they are at the, let me say, at the final stages.

So we expect the final verdict very soon. Two others have been already presented the offer. And 2 others, we are going to present the offer by immediately after summertime by September, October.

So the pictures for 2025 looks quite good in respect to the previous year. So at least we should expect 5 to be awarded by year-end as a minimum, maybe 2 of the one that we are going to present in, let me say, September, October, maybe can be awarded end of the year, maybe beginning of the year, depending which is the process of the evaluation.

But we have 7 in the pipeline. That to me is a good sign. Regarding the second point of the antitrust, considering that these are competitive tenders, we don't have any problem to participate to any of them. So we can participate to all of them. And in fact, the 7 that I mentioned to you that are currently undergoing in 5 of them, we presented the offer and the remaining 2, we are going to present the offer.

The next question is from Aleksandra Arsova of Equita.

So 2 questions on my end. The first one, maybe a follow-up on gas tenders. So a couple of weeks ago, there was a draft circulating on the potential amendments, changes to the regulation on gas tenders and on the bidding process. So it seems that it will be -- could be more shifted towards the economic conditions, discounts rather than towards the CapEx plan.

So just maybe some qualitative thoughts on your end on how do you see these potential changes and if they actually will accelerate tenders? The second one, is maybe on the acquisition and on synergies since you were -- you seem very happy on how the integration is going on.

And during the last conference call on the first quarter results, you mentioned something like EUR 10 million in synergies already, cost synergies already achieved in 2025. So since there is this acceleration in the integration, do you believe that you can achieve more synergies and maybe reach the higher end of your '25 guidance? So this is the second one.

Regarding the comments on the -- what is called the [indiscernible] review the -- some of the points. But to me, it is true. They have allocated more points, a few more points on the economic part. I think what is even more important than that is that they have introduced new area for evaluation that are linked to the innovation, to gas renewables, to digitization, all words that are very common in our company since many, many years. And they are not absolutely common to any other company.

So for me, that it is even more important because that will make the difference will increase our competitiveness because we are the only company in Italy that are able to prove that we have a fully digitized network ready to accept renewable gases like biomethane. And I mean, innovation is our trademark.

So to me, apart the shift of point from one area to another that is not so relevant to me. What is relevant is the fact that finally, this criteria for evaluation has been changed in order to, let me say, get the reality in which we are living. If you look at the old way to evaluate the only innovation was the -- like the number of smart meters as well as the cathodic protection.

I mean, 12 years ago, 15 years ago, that was innovation, sure. It's not innovation anymore today. So I'm expecting this criteria, once that will be put in place, there will be more focused by all the operator how to innovate like we did it in the last years. So I'm positive, absolutely positive.

The second -- I mean, the question is going to accelerate new tenders, I don't think so. I mean, as you probably have read about the Ministry declaration, Mr. Piceto declaration, is clearly said that the 177 A framework and tenders did not work full stop. So he said that you need to think about how to make this framework working because it has demonstrated in the last now 13 years that it didn't work at all.

The second point about synergy, you said it seems that I'm pleased. I would take out seems from the statement. I'm fully pleased that the way that we were able to merge the 2 companies. I mean, 90 days is an exceptional result and is ahead of any forecast we had at the time that we presented this acquisition.

So -- and regarding synergies, of course, if I'm -- if we are able to -- and we were able to merge the 2 company earlier than expected, there will be more synergy in 2025 than we expected before. And regarding the guidance, I can -- I'm quite confident that we will be in the, I would call, super high end inside that guidance will be very close to the high-end number.

And the confidence is coming from the fact that at the time, the guidance was based on a later integration, later merging of 2i Rete Gas with Italgas Reti. We were able to anticipate closing and more important, the merging of the 2 companies.

The next question is from Javier Suarez of Mediobanca.

First, a follow-up on a previous question on what may happen to make the process of tendering more virtuous. So it seems clear that the government is making the statement that current system is not working. And there has been a declaration by the Energy Minister on the possibility of renewing the gas concessions in a similar way of what is being done with electricity. So the question is, which is your take on this? And if you believe that this is a rational path to take and the implications for a company like Italgas? That would be the first question.

The second question is also a follow-up is on the slide, I think it's #9 on the efficiencies. So this 1.8% like-for-like efficiency gains, if you can help us to understand the origin for them from a geographical standpoint, how do you -- would split those efficiencies between the old Italian operations and the Greek operation and your latest view on extraction synergies in the old perimeter of Italgas and the Greek operation?

And also related to the previous question on the column that has to do with 2i Rete Gas, we should expect from the next quarter to come also a kind of statement on the efficiency gains from the incorporation of 2i Rete Gas, if that is an expectation that we may have. And then the third and final question is on Slide #3 on the disposal process for the disposal -- antitrust disposal process. You are seeing as next step, the binding offer by September 5. So which is your latest expectations for the completion of the whole process?

Let's start from the from the first question about the tender. I think the reason why the statement of the ministry was saying the system did not work is because there are too many concessions. 177 are too many.

And as we know in -- we have seen in the past 12 years, the complexity of the gas tender is such that has been an obstacle in order for the municipality to run those tender. We have always said that. So any ideas about reducing the number of the concessions is welcome because it will reduce the number of tenders by definition. And probably it will change who's going to launch the tender, maybe with an entity that is more equipped to handle complex tenders like this one.

Let's see what the government is thinking about. I think the declaration is important. Let's see what are the proposal that the technician of the minister will elaborate in order to find out a different framework that will help to accelerate the tenders to happen. Regarding the like-for-like synergies that probably is going to be, unfortunately, the last time that you see because, as I said, from July 1, it's going to be everything together.

So we are going to compare those costs with what we promised to be the synergies to the market with 2023 and '24 numbers. Let me say that this number that is 3.6% is same perimeter as last year is both Greece and Italy. I would say that is -- the contribution is very similar in terms of absolute value between Greece and the Italian old perimeter.

The reason -- even though, let me say, the 2 sides are significantly different. The reason is that Greece is accelerating in the efficiency, while we are still getting some efficiency from the Italian, thanks to the digital processes and activities. So I'm -- the fact that we are able to continue to reduce our cost is a good indicator. We will continue to do that, and we will probably say more in terms of absolute numbers once that we will work on the integrated company to 2i Rete Gas and Italgas Reti.

Last question, the antitrust has been just postponed by a couple of weeks because of the August time that was a request coming from a number of interested party was submitted to the antitrust. The antitrust approved that request. So we were thinking about -- I mean, if you remember, our deadline of the antitrust to complete the process of dismissal was by end of October. If you have 2 weeks, you get to mid-November. So there is not much difference in respect. So the time schedule is very strict. It's very determined by the antitrust authorization.

The 2 weeks extension approved by the antitrust just moved the final date by 2 weeks. So we are now in the beginning of November. By the time, as I recall you, the binding offer will be received by early September, September 5, and then the process will continue. Antitrust will scrutiny all the binding offer and we'll make the decision if all of them are acceptable or some does not meet the criteria set inside the documents. And then we will just put the ranking of those binding offer and then we will move forward. So I think that mid-November is a reasonable date to close all the process.

The next question is from Francesco Sala of Banca...

Congratulations for your results. Just 2 questions, if I may. The first one is on the cost of debt. Obviously, there was a spike in Q2 after the consolidation of 2i Rete Gas. So I wonder whether you can guide us to a number for the full year and how this -- the cost of debt is going to progress in the third and fourth quarter of the year?

And the second one, if you can share with us the mark-to-market on the WACC and whether we should expect a change in 2026 according to your calculations?

Yes. I take your first question for the cost of debt. As you noted in the semester, there has been the impact of the acquisition and the new bond issued in February. You remember the EUR 1 billion split into 5 and 9 years with the cost of debt between below 3% and around 3.4%.

So this, combined with the existing indebtedness drove to the level of the first semester. For the full year, I do not expect any major changes. There will be a slight increase, maybe approaching the 2% level, driven by the normal increase of the indebtedness in the second part of the year due to the inclusion of the indebtedness of the 2i Rete Gas for 2 quarters instead of 1 quarter as in the first semester, but very limited.

Regarding the WACC, of course, we monitor all the numbers about the WACC. As of today, we have not triggered the 30 basis points. Let's see. We still have another 1.5 months to cross the finger, if you want to cross the finger, one way or the other, depending on which one you like most.

The next question is from Julius Nicholson of Bank of America.

Just 2 for me. Do you have any update on your challenge with the change on the asset beta for 2025? And do you have any time line on when we maybe know more on this? And then the second question...

Can you repeat the first question? We didn't understand the.

Yes, is it my audio? Or was it just my pronunciation? I'll try again. So do you have any update on your challenge with the change on the asset beta that was in the WACC for 2025? And if you have any time line on this?

And then the second question was just to -- in terms of expectation, will we get any visibility on your disposals in the CMD in October, given that there will be binding offers in September? Or do we have to wait for mid-November, as you just said?

On the first one, sorry, it was both the -- I mean, it was mainly the audio because we didn't -- there was an interruption. The beta, okay, we have appealed the change of the beta because according to us, the number that was set by the regulator lowering the beta was not supported by according to us, a good rationale.

As you know, it takes time. If you remember, we appealed against the 2020 or 2019 resolution, end of 2018 resolution about the OpEx, and we are talking -- we talk in the first quarter of the adjustment made by the regulator after 2 level of appeal.

So it will take time. We are, let me say, confident that our appeal is quite strong, not because the regulator has not the right to review the beta because they have full -- I mean, they have the right to do it. But when they do it, they have to have a clear rationale and clear -- they have to justify why they did it very clearly. And according to us, what the explanation they brought was not according to us sufficient to explain such a reduction.

Regarding the disposal, it will mainly depend by the antitrust process to review the binding offer. If they review -- if they use less time than what they have reserved for them, we will probably have a clear picture before mid of November. Otherwise, we need to wait the process to be completed. It's not -- honestly, we are -- it's not up to us to close the process. It's really their evaluation. The reserve for themselves the evaluation to say if one binding offer has met all the criteria they set for being accepted.

So depending on how many we are going to receive, who are going to be the operator, what they can demonstrate to meet the criteria. So it may be a long process. That is the reason why they reserve on themself a significant amount of time. It's not the only job that they do. So we need to also consider that. Maybe end of October is probably -- beginning of November is probably the right time that we will know that is the outcome of the disposal.

The next question is from Alberto De Antonio of BNP Paribas Exane.

The first question is on regulation. After the extension of the 2 years until the end of 2027 of the current regulatory framework. Could you elaborate on what are the next steps that we can expect on regulation and what should we expect going forward?

And the second one will be in regarding the tenders, a follow-up. If you mentioned that there are 7 in the pipeline, 5 of them, of which you're about to or you're already presenting an offer. Could you give us a range of the sizes of these tenders? And what could be the impact in terms of RAP of them if finally you won any of them?

Regarding the first question, the 2-year extension, we will know more, as I said during my presentation by let me say, in the last quarter of the year when the regulator will issue some consultation document, tell us and tell not us, not only us, the industry, how they are going to deal with the 2 years additional regulatory period. In the meantime, as I said, we expect that after the 2 years, a totex system that is called ROS in Italy will be applied to us by sure. We are the largest by far. So if they don't apply to us, they don't apply to anybody else. in the decision taken by the antitrust, there is also mention that in 2027, they will start to do some test about the application of ROS, and they will do it on us probably.

But we will know that better when they will start issuing the new consultation document that we expect to happen at the beginning of 2026. So let me just to make the long story short. By year-end, they will set the rules, terms and conditions, let me say, for the next 2 years of regulatory period. And then starting in 2026, they will start testing, asking comments about the ROS to be applied to our industry in 2028.

What I can tell you about the tenders, we are talking about an overall of nearly 600,000 redelivery points, out of which a little bit more than 50% are already ours. So they are, let me say, on tender, let's say, 60% are ours. The remaining 40% are of third party.

The next question is from Emanuele Oggioni of Kepler...

The first one is on the synergies with Tire in general, the cost cutting and efficiency plan you have included in your business plan, if I remember well, up to EUR 200 million along the plan. If you remember -- if you explain or recall us if -- what was the impact, the benefit expected in next year in 2026.

So in the first year of the full consolidation for 12 months of the integration with 2i Rete Gas and also the existing asset base and compared with the plan after an update in -- after the first 90 days of consolidation of teas to what extent there could be an upside or not compared with your current assumption included in the business plan? This is the first question.

The second question is on the Greek gas network. I noticed that they improved the profitability, EBITDA from EUR 60 -- roughly EUR 60 million of EBITDA to EUR 70 million in H1. We know that you target the Greek assets to fill the gap with Italian ones. So I ask simply an update on this process. You are probably on track. But when this gap will be filled in your opinion?

And finally, if I remember well, in your business plan, the third question is on the allowed WACC. In your business plan, you have included 6.1% along the plan a flat assumption. We know that currently in '25 was down, was below this threshold. But in any case, you will be able to perform better to outperform in any case to release a good set of results.

But probably even not in '26, but in '27, the allowed WACC will be even lower than the current -- probably the current one. So what are your -- based on my estimates, the sensitivity is roughly for each 10 basis points, 1.5%, 2% of lower net profit, if I -- could you confirm or not?

Let me say, if I would be able to respond in precisely to all your question, I will not be here, but I would go and win the lottery, honestly, because they were so precise that -- Okay. Let me try to give you a flavor that to me is more important because it's tough. First of all, after 90 days in which we have focused ourselves on making the merging successful, so thinking more about the outcome, not being in a trouble in July 1.

We understand the many things about 2i Rete Gas. We try, as I said, to get the best of the 2 companies. You recall very well about the EUR 200 million synergies. You also should remind that there are 3 pillars, around EUR 40 million about traditional synergies, EUR 80 million digitization, another EUR 80 million AI. If you want to put in a time scale, the EUR 40 million will come between, let's say, '25, '26 and '27 maximum are the traditional, the one that you collect first. Digitization will take a little bit more because you have to adapt yourself to the new processes.

So it will happen -- start happening immediately, but then it will grow, it will take more time. AI probably will be at the end of the plan. So it's up to you. We tell that I think 75% are already achieved in 2028. That is our better forecast. I'm sure that in October, we will give you a more detailed view on that because after the merging, then we have another 3, 4 months of working together, and we will start collecting data and results. So we will be able to bring you more detailed forecast.

Remember that we have 25 working team together that are working to harmonize everything to find out the best practice to be applied, no matter if they are coming from Italgas or and stretching the whole organization. So I think I'm expecting the 25 working teams that are still working will provide us a better forecast for the coming years about the synergy. If I have to say the fact that we have anticipated the merging, of course, some saving will be anticipated by the fact that we have anticipated by a quarter the merging that we expected.

Regarding Greece, you are right, we are on the right journey. If you do some math, you will see and you have already done it, that the EBITDA margin is about 75%. In Italy, we are above 80%. So there's still a gap. I don't think we will ever close this gap because of the size. But still, we have significant -- if you go back to 2024, the EBITDA margin in Greece were below 70%.

Now we are above -- we are in the range of 75%. So we have already increased by 5 points. The EBITDA will continue to improve. As I said, Eon should reach the EBITDA margin that we can see in Toscana Energia because Toscana Energia is -- let me say, it's a company by itself, size is very similar. So still, there are a few points to be achieved. But as I said, we are on the right path.

So not this year, probably next year, will probably be fully satisfied by the performance of Greece for which there is not only the performance in terms of efficiency, but the number of kilometers that we laid down is significant. The expansion of the gas network in Greece is significant. We are progressing very well. We are very happy about the activity that we are doing in cooperation with the local community. I think also local community in Greece are very happy about our job and the fact that we are opening a new area where we can supply natural gas.

We have imported model that we have applied in Sardinia, LNG, small tank that are able to supply isolated grid. It's another advantage that we are providing to Greece based on our experience in Italy. Last question on WACC. I would not -- honestly, I will not translate -- well, if a reduction in WACC is there, there is an impact, of course, on the revenues. You know very well, we are nearly EUR 15 billion of RAB, 10 basis points is EUR 15 million.

So I mean, the math is very simple. What is not according to math is our ability to continue to reduce our cost and offset eventually this element. And you have seen in the first quarter, I mean, it was a reduction of 60 basis points, and you didn't even notice the effect of that reduction because of our investment, the RAB growth, some recovery of the past coming from the regulator, our efficiency on cost result us there.

And the WACC was reduced by 60 basis points applied at least in the oldest perimeter to EUR 10 billion of RAB, so EUR 60 million. So I mean, you see the numbers. We are playing a different game. It's not just a matter of math to say, okay, 10 bps, EUR 15 million, take the fiscal impact and then it's going to be EUR 10 million on the net impact on the profit. That is not the calculation. I mean you don't take into the picture our ability to continue to be more efficient, to continue to invest, to increase the RAB to be day after day, more efficient in terms of cutting cost. That is not the math. It's a demonstration that has been for 9 years now.

The next question is from Ella Walker-Hunt of Citi.

I have 2 questions, if that's all right. So my first question is to do with the tenders. You mentioned that you expect 5 to be awarded this year. So if you did win these 5, when could we expect the cash outflow that will be associated with buying the concessions that are not yours? That's my first question.

And then my second question is to do with the mandatory disposal. So more so asking if there's a chance that you don't end up disposing the redelivery points if, let's say, there's not -- there's a lack of buying interest. And if so, what would be the upside to your long-term guidance in that case?

Okay. First question, if the tenders are awarded, let's say, 5 this year, you normally takes between 6 to 9 months to get to the outflow in terms of payment of the RAB because you have to sign with the -- let me say, you have to sign a contract with the municipality. The RAB and the value of the asset should be adjusted to the latest value. So there is some, let me say, administrative and bureaucratic, if you want, activity that has to be performed.

Normally, we have seen it takes between -- depending 6 months is probably the right. Sometimes we -- there is a dispute about the value, the adjusted value, and therefore, it takes maybe 3 months more in terms of 9 months. So that is -- so long story short, if those 5 tenders are awarded in the second half of 2025, the outflow will happen in either first half or, let me say, mid of next year, not earlier. We don't expect that earlier.

The second question, disposal. Well, again, I don't have the probability. I really -- honestly, I don't know. What is happening if there is no interest or if the price is below the floor that we set that is not known to anyone except us and the antitrust. So there are 2 conditions for which we may not sell our assets is no interest or price that is below. In that case, we keep the asset for us, but I would like to -- so which is the impact on our plan is extremely limited.

The overall disposal is 600,000 redelivery points. Total redelivery point that we have is EUR 13 million. So we are talking about minutes. So if some of the -- let's say, 100,000 will not be disposed, just pick a number or 200,000. It's going to change something, Honestly, not really.

So this was the last question. We, as IR are available for any follow-up. And thank you, everyone, for attending the call.

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.