A2A Stock

Good afternoon, ladies and gentlemen. Welcome to A2A's First Half 2026 Consolidated Results. [Operator Instructions] Please be advised that today's conference is being recorded.

Now I would like to hand the conference over to our host, Marco Porro, Head of Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us. Today, our CEO, Renato Mazzoncini; and our CFO, Luca Moroni, will present our first half 2026 results, which confirm the group's operational and financial strength and the progress of our strategic investments. We will be happy to take your questions at the end of the presentation.

Let me leave the floor to Renato.

Okay. Thank you, Marco, and good afternoon, everyone, and thank you also from my side to -- for you for joining us. So reacting effectively to change delivers results today, challenging change over time is what builds sustainable results tomorrow. It is what distinguishes short-term responses from long-term value creation. And I think this perfectly encapsulates the first half of '26 for A2A, continuing to deliver today while building the foundations for tomorrow's growth.

And to illustrate this, let me start with some of the key achievements delivered during the first half of '26 across both our 2 pillars of energy transition and the circular economy. On renewables, we further scaled our platform, adding 35 megawatts of wind capacity and bringing installed capacity in wind from resources to over 300 megawatts. We also continued to develop our PPA platform. This is really key for me with agreements signed with Sosteneo and Polytechnic of Milano, so large platform, as well as the launch of our first A2A open PPA designed to support the small business enterprises through long-term contracts. Through these initiatives, A2A promotes the development of renewable by making green energy more widespread, more accessible and less exposed to market dynamics. This is also a concrete example of how PPAs enable the integration of renewable sources into industrial consumption, promoting long-term procurement models that provide greater stability and sustainability.

And today, really A2A is the only energy company that try to change this paradigm of renewable with products for every kind of customers long term. So the PPA mass market, 120,000 contracts signed, more or less 260 gigawatt hours sold with this kind of PPAs, of course, PPA classical B2B and now also this small business enterprise that is a kind of customers super interesting that without standard PPAs can really arrive to the change of paradigm of renewable. Also in this case, the duration of the contract is 10 years or 20 years depending on the negotiation. And so we are really very happy to have in our market, let's say, a product PPA for every kind of customers.

At the same time, we increased our role as a strategic infrastructure operator. Some example of the 250 construction sites that we have in this moment active. For example, Monfalcone construction site is running is PGT super large 870 megawatts of thermal capacity is running at full capacity, supported by extended shift partner with commercial operation confirmed for next year. Power network capacity increased by 5%, reaching 9,300 megawatts ampere and 2 new wastewater treatment plants have the treatment capacity for the equivalent of 30,000 inhabitants. In this context, grid capacity is not just a technical metric. It is what makes the transition executable.

By reinforcing our networks, we create the condition to connect more renewable energy, support new electric uses, so the demand and ensure continuity and quality services for the community that we serve. As water resources come under increasing pressure also in this month in Italy, wastewater treatment plays a key role in protecting water quality and increase the resilience of integrated water cycle. But delivering today's results is only a part of the story. At the same time, we are advancing a number of strategic initiatives that underpin long-term value creation.

So let's start at Slide #3, talking about our data center platform. So let me now turn in one of the areas where our industrial approach can unlock significant future potential exactly the data center. Today, the sector is benefiting very well from a number of favorable structural trends. Growing attention to data sovereignty and digital infrastructure resilience is driving demand for domestic and European data center capacity, making digital infrastructure and increasing strategic asset.

At the same time, Lombardy, our core area, an area in which A2A is incumbent for both generation and network offers a particular supportive environment for development promoting brownfield redevelopment and recovery solution, so this heating, let's say, 2 areas that are fully aligned with A2A's industrial footprint and long-term strategy. Against this backdrop, we believe A2A is a unique position to capture this opportunity. And our approach is based on energy-efficient power shell solution developed on A2A owned sites near our electrical production generation. We will connect them behind the meter, leveraging our generation assets. This enables us to offer faster time to market, lower energy cost and reduce environmental footprint. And so let's say, also looking the new DC development, this is a key point. On our data center platform, we are well on track with our strategic road map. You remember the 12th of November with the update of industrial plan, we launched our platform, where we are now?

The 2 sites, Lamarmora, Brescia is designed for around 20 megawatts of IT capacity, so 30 megawatt electrical megawatts, serving AI workloads and colocation services with a behind-the-meter connection to our waste-to-energy plant. Our waste-to-energy plant in Brescia is around 70, 80 megawatt so is ready to feed this new data center and proximity to our district heating network that means to have a data center with PUE super low and WE approx to 0.

Cassano Data a province of Milano is also moving forward with preliminary design already completed site, our site, once again, a site in our property for at least 80-megawatt IT at least is designed to support workloads with potential for modular densification. It would benefit from a behind-the-meter connection to CCGT plant, once again, more or less 800 megawatt of CCGT plant. And from the ability of existing gas peaker as backup power, 110 megawatt of peaker that can work as backup power, providing potential advantages in terms of permitting time lines that means no environment impact assessment required. So in this case, the time to market for this plant is really incredible because we have the connection in high voltage. We have the generation to feed the baseload the plant, and we have a backup and we don't need environment impact assessment.

Okay. In Slide 4, we underline our strategic partnership with Equinix because as our data center platform continues to progress, we are, of course, also advancing our role as an energy partner. And our partnership with Equinix is a clear example of this. We are in near Milano once again, Settimo Milanese, and we will transform the heat produced by service hosted at Equinix campus in Settimo Milanese into the energy resources for local communities. The model is going forward and effective. It generated as a byproduct of data center workloads is captured by Equinix and transported to A2A energy center where A2A upgrades it with 72 megawatts of large-scale heat pumps because the temperature coming out from data center is not enough, backed by storage, water storage, 6,000 cubic meters of thermal storage.

The heat is then delivered into the Milan district heating network. To understand the dimension of only one data center like this, expected contribution is incredible up to 225 gigawatt hours of recovered thermal energy per year, enabling further network expansion and increasing the carbonized heater distributing in Milano around 20%. So more 20% of district heating in Milano. That is also, let's say, the only way really to decarbonize Milano because it's not easy with the typology of building that we have in Milano to substitute the thermal plant with heat pumps in every kind of building. It is a pioneering partnership with Equinix that illustrate how strategic collaboration can pave the way for future opportunity.

Looking Slide #5, let me turn now turn of our first half results. These results, despite the different trends across our businesses highlight the value of A2A's diversified industrial platform, enabling us to mitigate external pressure while capturing opportunities across our portfolio. The EBITDA remained broadly stable at EUR 1.2 billion despite higher concession fees for hydro and less favorable energy price environment. Excluding this effect, group EBITDA would have a growth by around 2% year-on-year. This was supported by the natural hedge in hydro generation, in particular, in this case, between Northern and Southern Italy and by continued EBITDA growth in electricity distribution driven by ongoing investment because in this half, the relative production in the Southern Italy either was much, much higher than the average level of the last year. In the North we had a reduction due to less snow in the winter in the month. So strong financial discipline with net financial position to EBITDA ratio at 2.6 in line with our target, supported resilient results and continued strategic evolution.

So look Slide #6 to our investment program. In the first half, we continue to execute on our strategic road map with CapEx reaching in this half EUR 718 million, up to 5% year-on-year. This was mainly driven by the ramp-up of investment at the Monfalcone CGT expected to be completed next year with an EBITDA contribution of EUR 120 million once fully operational, so in the second half of '27. With an allotment of new Corteolona wind to energy plant province of Pavia, Lombardy expected to be commissioned in '28 with a full run rate EBITDA of EUR 40 million and a continued investment in electricity distribution and regulated assets. And I want to underline that we reached EUR 4 billion of RAB considering the RAB coming from a power grid, the most important gas grid and the water cycles. Development CapEx increased by 17%, confirming the progress of projects that will drive our future growth. Importantly, 59% of our future big investments are aligned with the EU taxonomy, confirming the strong sustainability profile of our growth plan.

With that, let me turn to Luca for a more detailed analysis of our results. Please, Luca.

Thanks, Renato. Good afternoon, everyone. As Renato just highlighted, our first half results once again demonstrate the value of A2A diversified and integrated business model. The slide shows how the strength of our portfolio allow us to balance different market dynamics to seize opportunities and mitigate headwinds. As a result, we delivered an EBITDA of EUR 1.181 billion, broadly in line with the last year.

This reflects 3 main factors: higher solar and wind energy production, the ability to capture trading opportunities and strong energy management performances, solid contribution from our regulated business, mainly electricity distribution and resilience in the market business despite the challenged competitive scenario. Albeit mitigated by the impact from higher hydroelectric concession fees and lower our production, the lower waste contribution and the nonorganic reduction in gas distribution. Now I will unpack our results in more detail, starting with Generation & Trading, where I walk you through the main driver of our performance.

In Slide 8, Generation & Trading, increased wind and solar production and a strong performance in energy management helped offset the impact of our concession fees. EBITDA was EUR 394 million, a decrease of EUR 26 million compared to the first half of '25. Starting with renewables, we delivered high wind and solar production. However, it was partly offset by 2 factors: higher hydroelectric concession fees, which had a EUR 37 million impact, including around EUR 25 million related to prior years and lower hydroelectric production. On hydro production, there is also a positive point worth highlighting. Lower water availability in the Northern Italy, particularly in May and June, was partially offset by better hydrological conditions in Calabria. This once again shows the value of our diversified generation portfolio and its ability to reduce local volatility.

Moving to flexibility, a good performance in trading and energy management confirmed our ability to capture market opportunities. To sum up, our operational performance remains solid with our production volumes and effective trading execution, while higher concession fees and weaker hydro condition represented a headwind during the semester.

Let me now move to market. Looking at the market segment, the first semester confirmed the persistence of our commercial performance. EBITDA was EUR 232 million with an increase of EUR 3 million compared to the first half of 2025. Performance was primarily driven by our electricity volumes, particularly in the free market segment. At the same time, unit margins were lower than last year, reflecting a more competitive market environment. While competition remained high, we have seen progressive reduction in churn rates over the last few months, in particular, in June, July. Overall, the business delivered another solid set of results with volume growth offsetting margin pressures.

Let me now turn to performance of the circular economy. Adjusted EBITDA was EUR 293 million, a decrease of EUR 29 million compared with the first half of 2025. The decline was mainly driven by temporary factoring waste, lower availability of Parona waste-to-energy and other treatment plants due to maintenance activities, new Acerra service contract signed in February 2025, higher cost fuel cost in collection. On the positive side, treatment prices showed a slight increase, while the integrated water cycle benefited from higher and lower revenues. In district heating, performances were lower year-on-year, mainly due to the lower volumes and reduced contribution from white certificates. Overall, the softer results reflect temporary operational factors, primarily related to plant maintenance in waste. Excluding these effects, the underlying performance of the business remained broadly robust with a support from integrated water cycle, partially offsetting the pressure on waste.

Then let me turn to Smart Infrastructure. In Smart Infrastructure, the overall performance reflects growth in allowed revenues that more than offset the negative perimeter effect in gas distribution. EBITDA of this business unit was EUR 285 million, an increase of 3% compared to the first half of 2025. In electricity network, EBITDA benefited from higher allowed revenues driven by the new ROSS tariff methodology, the regulatory lag alignment and the continued growth of RAB driven by CapEx deployment. In gas network, we saw a negative year-on-year contribution, mainly due to the disposal of gas distribution assets completed in July 2025 and the absence of nonrecurring OpEx recognition that benefit the first half 2025. Okay. We have unpacked the results for each business unit.

I'd like to conclude by illustrating the combined contribution to our EBITDA mix, group net profit and cash flow. So Slide 12, starting from EBITDA of EUR 1,181 million D&A amounted to almost EUR 500 million, up EUR 21 million versus last year, mainly reflecting the continued deployment of CapEx. Provisions were EUR 41 million, slightly higher than last year, mainly due to our result in the market business.

Net financial expenses stood at EUR 87 million, broadly in line with last year. Despite ongoing market volatility, the cost of debt remained stable at 2.7%. Adjusted taxes amount to EUR 165 million, EUR 18 million lower year-on-year. The tax rate stood at 29.5%, excluding the impact of the ERAP increase introduced by Energy Decree, which has been accounted for as a special item. As a result, adjusted group net profit came in at EUR 374 million compared with EUR 419 million in the first half of '25. In the first half, we continue to deliver solid returns with a return on investment and return on equity around 9% and 11%, respectively, well aligned with our targets.

Let me move to cash flows. In the first half 2025, the group recorded negative change in net financial position of EUR 312 million. As of June 30, our net financial position stood at EUR 5.8 billion with a leverage ratio of 2.6x, which confirm the overall stability of our financial profile and remain fully aligned with our capital structure target. Looking at the cash generation, we delivered an operating cash flows of EUR 749 million, fully supporting the financing of our organic growth during the period.

So let me briefly walk through the main drivers. Starting with the net working capital, the variation of minus EUR 287 million was mainly driven by 2 one-off events. The first was the reduction in payment terms to CSEA following the 2026 energy decree, the Decreto Bollette. And the second was the payment of the past due state concession fees for hydroelectric concessions.

Moving below operating cash flows, we paid EUR 145 million of taxes, EUR 76 million and net financial expenses, EUR 69 million. After accounting for EUR 718 million of CapEx, the operating cash flow before dividends amounted to EUR 31 million. Following the dividend payments, net free cash flows stood at EUR 295 million -- minus EUR 295 million. The change in the consolidation perimeter had a negative impact of EUR 2 million, mainly driven by EUR 27 million related to M&A, partially offset by the EUR 25 million price adjustment related to the partial disposal of our gas asset to Ascopiave completed in 2025.

Finally, after also having taken into account the EUR 15 million spent on our share buyback program, the overall change in net financial position for the period amounted to minus EUR 312 million. Looking ahead, we remain confident that the strength and the diversification of our integrated business will continue to be a key competitive advantage. It provides the flexibility needed to navigate changing market conditions. It reduced our exposure to market volatility. It bolsters the stability of our cash flows and net financial position.

So now I hand back to Renato for the final part of the presentation.

Okay. Thank you, Luca. And our guidance is confirmed. I'm really confident to confirm our guidance for '26 with an adjusted EBITDA between EUR 2.210 billion and EUR 2.250 billion and adjusted net profit between EUR 0.63 billion and EUR 0.66 billion, reflecting the robustness and visibility of our business mix. The resilience of our diversified business portfolio and our ability to capture opportunities leave us really fully confident in achieving this target our progress.

And so let me conclude by bringing together all these elements that we have discussed. Our strategy aims to deliver today while continually building tomorrow's growth. It is a strategy built on disciplined execution, industrial excellence and future-fit growth. So disciplined execution underpins our ability to deliver our commitments with clear priorities and rigorous capital allocation and we are on target. Industrial excellence is rooted in the strength of our integrated portfolio across energy, environment and infrastructure, and we are on track and future-fit growth comes from investing in platform that respond to long-term structural trends from decarbonization and electrification to digitalization, and we are on trend. In short, this is an architecture built to last, resilient, integrated and designed to convert opportunities into sustainable growth.

So thank you very much for your attention. And now let's open the Q&A session.

[Operator Instructions] The first question comes from the line of Javier Suarez Hernandez of Mediobanca.

I have several. The first one is on the generation business. There are probably 2 different dynamics. One is higher electricity prices and probably higher contribution from ancillary service activity positively impacting your activity. So I just wanted to have latest data on forward selling for electricity in 2026 and 2027 and what this upward pressure on electricity prices may be impacting your business.

On the contrary, probably hydro conditions during the second quarter has been lower than versus previous year. So which is your expectation on the company production with hydroelectric facility by the year-end how that assumptions compare with your assumption in the recently presented business plan. That would be the first question.

And the second question is more strategically is on the interest on renewable energy. So can you help us to understand your latest views on developing new renewable energies in Italy, is value for the group and the relative preference for brownfield assets versus greenfield assets and also latest views on new battery system.

And the third question is, if you have any comment on the consultation document opened by ARERA implementation for gas distribution in Italy from 2028?

Javier. Talking about generation, consider and you know very well that we hedge our production. So for '26, more or less is all hedged not all because with flexibility exactly in the hydro production, we maintain a margin to be able to -- not to arrive in a situation of over hedging. But the prices was fixed months ago. And also for '27, considering that the scenario in this moment seems high, but the volatility is super high. So it's enough that as probably all we hope tomorrow between Trump and Iran may try to find a solution and the scenario prices come back normal, let's say. And so we have 70% of the production '27 all covered with a price higher than EUR 100 per megawatt. So it's fine, but is on budget, let's say.

And talking about the hydro condition in this moment for its way in this first half worked super well the south. Consider that in March, as probably I said in the last call, we beat all the production of '25. And for this reason, in this moment, our forecast is around 3.9 terawatt hours compared with an average of 4.1. So yes, there is a little reduction, but absolutely not really material.

Talking about renewable, I think that absolutely, we need in Italy and in Europe to increase the renewable production because it's the only way to come out from this incredible situation of external dependencies in particular from gas, petrol and so on. And for a company like A2A, let's say, works well, both brownfield and greenfield. Overall in Italy, of course, we need new renewable because that means also repowering. For example, for wind, repowering is surely the key element to increase the total production. And so we are absolutely committed in our plan of EUR 3.7 billion of investment for another 3 gigawatt of renewable production in the next year. And our pipeline is solid, is interesting and is well balanced between sun and wind.

Talking about battery is a good question. I think that the business of battery can work inside mass tender because mass tender is really too difficult to imagine to develop this business. The next tender is in November, as you know, we are working to participate. You'll see in which way, in which configuration. But A2A, like other large energy company has some plants, some sites already connected with high voltage power grid that is key to develop large-scale storage plant, battery plant. And so we think to be able to participate to the next tender with an interesting proposition.

Okay. Yes. Maybe the last question for the ARERA document of consultation, the gas distribution, I think you are referring to the introduction of the ROSS mechanism also on gas, which, frankly speaking, we think not affecting so much our network. I remember that we manage today only Milan network, and we already did the tender. So it is something that will affect player -- bigger player than us with point of delivery higher than 300,000. So it would not have any impact really on us.

The next question comes from the line of Emanuele Oggioni of Kepler.

The first one is on the guidance apart the numbers, the figures, what are the moving parts expected in H2? We know that, for example, apart the usual flexibility in the hedging volumes depending on the weather, depending on the water availability and the next weather, you are not included the potential positive effect for power prices. So what are the moving parts in general by business unit in waste, as there is a recovery in waste expected or higher pressure in other -- in energy supply in other business units. This is the first more qualitative question on H2 outlook.

The second is on the ETS reform, the EU ETS reform, which came out better than expected or not so bad than feel by investors. So what is your comment and opinion on this?

And the third one is on the market supply in Q1 you were able to increase by 1%, but in case it was still an increase, a small increase, but an increase in the free market customer base. While according to the H1 data, there is a minus. So you lost free customer base in Q2. So what are the current dynamics for you and this turn down compared with the Q1 in Q2?

Okay. Maybe Luca start the moving parts of the guidance.

Well, I will give you an answer on guidance and maybe some about market supply. So on guidance, we are pretty comfortable about the guidance. So we confirm it with some positive expectation on Generation & Trading business unit. Having also considered the negative impact related to hydro concession fees with an impact for the total year of more than EUR 50 million. So we are able to offset it and to stay in line with the result of the last year.

Market, have you seen that it has been performing very well with strong resiliency on the marginality, even though they are slightly below last year, but with an increase on the volumes sold. The churn rate is going to improve in the next month with an expectation to stay below the end of the last year, at the end of 2026. And with -- as a consequence, with the opportunity to revert somehow the number of acquisition and the total customer, in particular, in electricity market in the free market. So we have positive expectation also in terms of marginality to stay slightly below or near the level of 2025.

Smart Infrastructure, very good, very positive. The fact that the ROSS mechanism of the tariff have given us quite good result and opportunities for the first semester and also for the second one, offsetting the negative effect on the gas distribution. So all in all, with an opportunity to end the year higher than the last one. Circular economy, it is the business which is more suffering for the maintenance activities of the first part of the year with a shape of recovery in the second half and ending in line with 2025. So all in all, this is what let us comfortable on the ending of 2026 results.

Okay. Talking about ETS, the reform in this moment presented by the commission is better than our expectation for a couple of things. The first is that talking about the proposal of change, the merit order of the plant working on ETS, the answer from the commission was absolutely clear. So not to action ETS and what we need to really give to renewable the strong to win against the other sources. The second, on the opposite side is because one of the discussion was about the application of ETS on the waste-to-energy plant that was under discussion. And in this moment, the decision was to shift this hypothesis from '28 to '31 or later because, frankly speaking, in this moment, there are no technology worldwide to -- better than the waste-to-energy plant to phase the part of waste not the -- rather the new material. And so what we see is in ETS that try to be more useful for Europe but don't change the strategic rationale that brought ETS to be invented some years ago.

Talking about supply, our strong commitment is on free market electricity. And also in the second quarter, so in the second -- in this first half, Decree Energy, pay attention, Decree Energy growth 0.2%, 0.3%. The little differences in this number is linked to our second brand, in particular, the multi utility ID in Brianza [ Achigray ] in the northern of Lombardy that has some brands that are not really able to stay with the strong competition in terms of marketing, advertising and so on. And we don't want to push second brand because it's absolutely inefficient. So frankly speaking, we are happy that with the situation of a churn rate so high like in the first half, the capacity of acquisition of A2A Energy remained high. In June and July and August, the churn rate fall down. And so we expect it to be able this year to grow also with our electrical customer base.

The next question comes from the line of Roberto Letizia of Equita.

I would like to go back briefly to a couple of questions already answered, but if you can tell us exactly how much is the coverage on your production in '27 and eventually in '28, if you did any for even the following year? An additional clarification because I had the same question, but actually Javier, but partially, you skip it, so I want to recover it. So I got the sense of you being interested in the RAS, the amount of gigawatt you want to do and the pipeline, which supports both solar and wind.

Just wondering how much of that can be looked into brownfield deals rather than greenfield, considering that the market is very open this morning Enel announced another acquisition of 85 megawatts in the country. We saw additional M&A deal for power generator trying to increase as rapid as possible their presence. So wondering if any change in the strategy may occur from you by leading you in having a higher exposure of the growth through brownfield acquisition as there is a market and an opportunity.

If you can give us the most recent trend in retail long-term PPA. Just wondering if you'll keep going to growth on those kind of contracts. And then just wondering if there is any potential impact from the heat waves that we saw 1 month ago and also in this day, there was a fire in distribution connection center in Milan just this morning and a lot of accident during the heat wave. Just wondering if we have to consider any potential negative impact from extraordinary maintenance to the distribution plants that follow the heat wave.

Okay. Starting from the hedging, the coverage is '27 -- 70%. The price is higher than EUR 100. So it is good is on line with our budget, with our scenario. And for '28, is a put in this moment, but it's typical to look forward 18 months, let's say.

Talking about renewable, consider that our strategy, since the first moment was a mix between brownfield; for you, brownfield is M&A, let's say, and greenfield. And you remember very well that we both the pipeline from Octopus solar from Ambiente wind. We are working in repowering of some of the portfolio wind from Ambiente. And from the other side, pipeline and new greenfield projects, for example, in Friuli Venezia Giulia in the North, 160 megawatt of solar plant, super interesting for the position and the strong demand that we have in the north of Italy.

So if you look at our 700 megawatt today is a mix of strategy. And I think that this is a good solution also for the future, probably we maintain a solution like this because if our opportunity is correct to look and if there is the opportunity also to buy something. But from the other side, it's fundamental to have a pipeline. And in this moment, we have a strong pipeline because to be able to deliver power industrial plan of course, we don't include into the count the M&A. So our pipeline must be enough to deliver our industrial plan. Then M&A can be an opportunity to increase the return of investment if there are opportunity against our pipeline, our greenfield development. So I think that this is the situation. Looking Italy, once again, we need to increase the number of solar panel and wind capacity. So it's clear that there is not enough M&A in which you pass an asset from one end to the other.

Talking about retail, yes, we are absolutely on track with PPA mass market. Consider that is interesting because the price, I remember that in this moment, the price of a PPA, let's say, with a normal profile, B2B is -- can be around EUR 80, EUR 85 per megawatt hour. The mass market is around EUR 105 and it's typical to have more marginality from B2C and from B2B. The number of contracts in this moment is more than 120,000 and the number of gigawatt hours that we allocated with PPAs mass market is slightly higher than the number of gigawatt hours allocated with B2B.

In particular, if I will remember, is 23 gigawatt hours of total allocation for energy for PPAs mass market. The reason why we decided to put on the market also PPA for small businesses is that I think absolutely that the change of paradigm for renewable is exactly the capacity to fix the price for long term. And we absolutely -- we must build products for every kind of customers. And we absolutely know that for a large company imagine a steel plant and so on, is normal to deal with our energy management to find the correct PPA, the correct profile, the correct price. But for a retailer, and also for a company, a small business without expertise knowhow in energy management or we are able to put on the market standard PPAs or it is impossible to sign a contract for 10 years, 20 years, 15 years and so on. And so I think that really will arrive to have 1 million customers with PPAs mass market or small business.

And talking about the heat, yes, in this moment, the heat it's crucial. But if you look at the performance of our power grid in Milano compared with the last year is much better. The number of blackout is absolutely minimum and all the indicators, the KPI that underlying the performance are good. And absolutely, there are no extraordinary maintenance that we have to do. Simply, we have to continue to invest in new secondary cabin, new primary substation, so to new cable and so on, but online with our planned plan. So -- and we are absolutely happy to say that also in situation in which there are 40,000 degrees that is incredible, we are able to face the situation with a good level of satisfaction for customers.

The only problem that we had, frankly speaking, was in the grid, so in the company that we built last year from which company. And in Unareti, we have not the track record of CapEx that we did in Unareti in the last years.

The next question comes from the line of Francesco Sala of Banca Akros.

The first one is on the treatment business. When should we expect the treatment business to go back to normal, whether it's going to be something already in the third quarter or, let's say, towards the end of the 2026. The second one is on the single national price.

Francesco, sorry, can you come back because I didn't understand the question, the quality of --

The first question is on the treatment business. There have been some -- yes, some issues in the first half. I was just wondering when should we expect the business to be back to normal, whether it's a third quarter thing or more, let's say, towards the end of the year?

The second question is on the single national price. There have been discussions for a while about the end of the single national price also on the demand side. I wonder if you can share with us your initial thoughts on the consequences you think they are going to be for you and the market?

And the third one, if there are updates, if any, on the extension of hydro concession and also electricity distribution concessions.

Okay. Coming from -- starting from electricity and hydro. For electricity the last activity is in terms of Veneto to produce the final decree and I told the [ manager in Veneto ] some weeks ago is on production let's say with the decree. The tender -- the historical date for the tender was at 2030 and simply the laws says that the 5 years in advance the government to start working for the tender. This is the reason why in December '25 -- '24-'25, in the balance law they included the law to change the needs of tender. Only to say, Francesco that probably is not the priority #1 in this moment talking about 2030. But we are confident to see in September the text of the decree coming in discussion to be closed this year.

Talking about the hydro concession is interesting because the reason why we didn't solve the problem of hydro concession until now is mainly due to the PNRR because you remember that inside the PNRR agreement, there was in the competition law the commitment for the government to put tender on hydro. So my personal position is that we see something different after August because -- simply because in August, will end, finally and totally the PNRR with the tender part of the money coming arriving from Europe.

If the question is there is a discussion about tender, frankly speaking, in this moment, no. The only super legal, super [ penal massive ] tender in Lombardy in one of our plants in [ Valle Sanmonica ] was stopped by the court, the civil court of Brescia because region Lombardy didn't do correctly the procedure to put on the market this concession. So I think that also this dossier after August can come back on the correct table.

Your question about the single national price. The question is if we think that it is possible for a customer to have a different price, which is your question. Because in this moment, the price is zone by zone for the producer. But if you ask, if I think that it is possible to have a different national price for final customers, I think that is impossible because really, if in a country like Italy, in which the discussion about the price of electricity, you divided in 7 different part of the country, the price. And the different price is mainly linked to the power grid, the national power grid by Terna so let's say, that is not enough strong to produce a unique market, you can imagine what can happen. Because it's not a structural problem because it's normal to produce more sun in the south or wind essentially in southern than in -- and more hydro production in Lombardy, Demonte or Dalmine. But we are a country in which the different energy capacity of the single region can absolutely remain in such a huge market if the power grid is enough stronger to connect completely the country exactly like in the plan, CapEx plan of them. So I think really that is impossible to, politically impossible, to have something different from a single tool.

And treatment business, the question is the performance. Yes. In the first half, in particular, we had a problem with the plant in -- a waste to energy plant in Pavia , Arona and it is not a economical problem because it's well covered with an insurance. But surely in the first half, we had some problem of production of some plants that we forecast to recover in the second half. So in particular, consider that one of the reasons why we confirm with confidence the guidance is because we are looking also in the treatment business situation normalized in the second half.

The next question comes from the line of Davide Candela of Intesa Sanpaolo.

I have a few regarding the current energy scenario and so the curves and the dynamics of energy prices. You spoke briefly about generation, but I was wondering if you can provide a bit broader view also on other businesses like, for example, energy supply, if this current scenario is changing your approach commercially and this -- there are some emerging risk with regards to your potential sourcing costs from next year and so on, if you can provide a picture on that?

And secondly, on waste, I was wondering if you can or maybe incur some higher costs mostly related to oil prices increasing and that could be beared by your numbers and the recovery in the second half. So just a bit on that.

And last one, still on renewables. I was wondering if you can provide more visibility about your pipeline and which is the breakdown in terms of how many projects are ready to build or closer to final investment decision. And on that -- on the return environment, if -- apart from the higher prices we are seeing in power, if the high interest rates or the equipment costs are challenging in a way the return environment also for you or this is not an issue at all?

Okay. Well, for the energy scenario, the situation in the last month is a little bit incredible because from one side, all of us see price for gas and of course, electricity super high. From the other side, if you look the forward '27, '28, the price for that. Why? Because the storytelling is that the war in the gulf must finish where the effect of a decrease for later will reduce a little bit the full price with -- not with ATS, but with the gas distribution cost, so some euros per megawatt hours and so on. And so we continue to be in a field with a real price super high and forecast more, quite more. Consider that for a company A2A that works with a strong hedging, what I can say, Davide, is that we are able to remain on budget. So you know our industrial plan and the target that we introduced in the industrial plan is absolutely confirmed.

One year ago, the discussion was if the scenario embedded in our industrial plan of more or less EUR 100 per megawatt hour was correct or too high. And you remember that I said, for me is correct simply because we are linked to GNL. GNL in this moment has OpEx, so liquefaction, transport gasification that brings the base cost of GNL to EUR 30 per megawatt hours. That means EUR 60 considering 50% of efficiency of thermal plant, more or less you arrive to EUR 100. In this moment, the price remain higher for probably for speculation for the situation that you know in the Pacific Ocean. And so I can say simply that if I look at the next 2, 3 years, surely our budget is correct, and we are able to hedge the price at the level that we have in our industrial plan.

For the waste, I imagine you talk about collection considering the cost of oil, so gasoline, I think, consider that compared, for example, with the public transport, our fleet do a number of kilometer [ super speed up ]. If you look a truck for collection is every time stopped and the number of kilometer is really not material. So, also the total consumption of oil compared with the other cost is not enough to change the result of our economics. Much more, for example, the cost of labor and what is interesting is that not negotiation of -- on the cost of labor brings total cost that is slightly lower than our expectation. We are not alone because it is a national negotiation probably we are the biggest company. And so the average cost for the other players remain lower and this is a benefit also for us. So more or less also on this collection, we are absolutely on budget.

And about the pipeline, consider that our goal is to be able to build every year 300 megawatts of new solar and wind renewable. And pipeline is 10x more. And of course, like every pipeline has a part of ready to build, a part of advanced and part on, let's say, ongoing. And in this moment, what is important is to select well what really can be merchant and what is too high like SOE to be mentioned. Because it's clear that the pressure on the electricity price brings all of us to build a plant with low SOE to be able to stay well on the market, to be able to contribute really to reduce the price without reduction of our marginality. And the best way is to be able to build well, to build a plant with low SOE. That means to reduce the cost of land, of authorization, permitting gas and so on. So all the supply chain that reduce the final cost of energy because the solar plant or also the competition in oil pool between some Chinese players and the historical EU is working to reduce like but also in this case.

So to close, surely we are absolutely able to deliver our 300 megawatts every year starting from the regime, I think, from '28, '29. In this moment, for example, we have under construction 100 megawatt of solar plant in the north of Friuli Venezia Giulia. As you have seen, we delivered 35 new megawatts of wind capacity. So also in this half '26, the new quantity of renewable is more than 100 megawatts.

Yes. I will answer to your last question regarding the cost of debt. We closed the first half with the same cost of debt as we closed the fiscal year '25 that is 2.7% and we are expecting to maintain it for all the year '26, considering the fact that we are funding ourselves with an average cost in line with our quantities, as you've seen as the result of the cash flow analysis, but with a slightly lower or the same cost we already experienced in the first half of the year.

We are also proactively managing the cost of debt, taking some position on the market with some swap activities. And this also help us to lower the impact of the cost. So we are comfortable about the future resiliency of the cost. I have to say also that generally speaking, the weighted average cost of capital has been lowered in such a way. And this gives us the opportunity to stay currently to the spread of 200 basis points between the work with the return, the average return of our capital allocation, our projects.

At this time, we will not be taking any further questions. I will, therefore, hand the conference back to the speakers for any closing comments.

So thank you, everyone, for participating to the first half results. If you need any additional follow-up, please contact the IR department, and happy summer break to everyone. Bye-bye. Thank you.

Bye. Thank you very much.

Ladies and gentlemen, this concludes today's presentation.

Hello, ladies and gentlemen, and welcome to the A2A 2026 Q1 results presentation conference call. My name is Zach, and I will be your operator for today's event. Please note this conference is being recorded. [Operator Instructions] I will now hand you over to your host, Marco Porro, Head of Investor Relations to begin the conference. Please go ahead.

Good afternoon, everyone, and thank you for joining for the first quarter 2026 results. Today, the results will be illustrated by our CEO, Mr. Renato Mazzoncini; and the CFO, Luca Moroni. I will immediately lead the floor to Renato.

Okay. Thank you. Thank you, and good afternoon, everyone. Thank you for joining our call today. I'll start with a statement Alfred North Whitehead once said, that the art of progress is to preserve order amid change, and to preserve change amid order. And let's say, in the last 3 months, we have seen a lot of changing inside the energy landscape in Italy and in Europe. So let me start with a brief overview of the macro scenario and how we are responding to preserve both order and change in our mission to be ready to power. So in Q1, Q1 was marked by uncertainty and super like volatility in the energy market, fueled principally by two external factors.

The first is the proposed measures in Italy and in Europe to mitigate the impact of rising energy costs and industrial competitiveness. In Italy, it's the [ societad decreto ] for Decreto Bollette, the decree for the tariff. And after a couple of days, the geopolitical tension in the Middle East in Iran. So what happened in Slide #2 is that, for example, the PSU gas price peaked at around EUR 6 per megawatt hour, while the PUN spot price ranged around EUR 80 to EUR 170 per megawatt hours amid continued moves in the forward curves. So visibility is still limited, but conditions are well below the 22 extremes. You can see in the graph at Slide 2 in the left part of the slide.

Against this backdrop, our action are geared to support short-term system stability and to deliver on the targets we have communicated to shareholders. And our first step was to give customers, especially households, greater stability by maintaining our fixed price contract offers. And this now account for around half of our mass market exposure. So consider that 50% of our customer base mass market is in fixed price. Our '26 renewable generation, in line with our policy, is already hedged for more than 70%, giving us full visibility for this year. We will continue to closely monitor developments and to respond as necessary navigating an environment that remains highly fluid. So that's the short-term picture.

But as you know, A2A's vision is built on long-term resilience. And this commitment remains unchanged. And let me say that exactly in this situation, to have a 10-year industrial plan is fantastic because in this situation, where short term is a problem to face, but it's not, let's say, the polar star. So the contingent geopolitical phenomenon of today only serve to underscore the long-term importance of Italy's energy independence. And for this reason, the expansion of our renewable and high efficiency flexible capacity remains a key driver. For example, during the quarter, we commissioned the [indiscernible] plant, adding around 30-megawatt of wind capacity in Southern Italy. And we reiterated our investment strategy, almost half of the quarter spending direct towards generation plants and in our power grid to remain the backbone of the energy transition. Electrification of consumption remains a sector trend underpinning our capital allocation choices.

And it is super interesting, the fact that in Italy, the demand was up to 3% in Q1. You know that there is sometimes a discussion if really, the demand will grow. And we can say that in this Q1, there is a visible growth of the demand, especially in Lombardy, in which the growth arrives in double digit, 10%. And this is encouraging, an encouraging signal, of course. Equally, encouraging is the fact that data centers will continue to emerge as a new high consumption customer segment.

And we see confirmation of this in the fact that the connection request in our electricity distribution network, in particular, and in the province of Milan, in particular, Duereti, that is the company that we bought 2 years ago from Enel, now amount around 330-megawatt. Consider that is medium voltage, let's say, non-broadband 10 megawatt. That means 33 new data center, at least, that ask for new connection only on Milan. So despite ongoing volatility, I can confirm that our resilient business model, diversification, and the long-term perspective, supported by strong execution, enable us to maintain our investment commitments. So let me give you a few highlights.

Looking at Slide #3, in which you can see our numbers, our economics. Also, we see both positive and downward variance in these figures taken together underscore two crucial factors. Our financial resilience and our commitment on targeted investments. And I think the most evident metric of this is our net financial position, which remains sound and under control at EUR 5.6 billion versus EUR 5.5 billion at year end '25. The movement is entirely consistent with the typical business seasonality. The leverage ratio also at 2.5, broadly stable year-on-year, confirming the group financial discipline and balance sheet resilience, even in a quarter of active capital deployment. In short, the figures confirm our resilience with -- which is far confirmed by our continued commitment to target the investment.

And the Slide #4, we continue in our CapEx plan deployment confirming our commitment on our long-term strategic vision, you can see 4% more of CapEx compared with last year. But what is super important is that we have 21% of growth in the development CapEx, EUR 210 million refers to development project. And the key pillars of our investment strategy are improving the efficiency of power distribution networks, accelerating our development path towards renewable energy, increasing the flexibility of generation plants. And of course, the CapEx in circular economy, if you remember, it's also district heating and water cycle. So that's a big picture. Now let me turn to Luca for a more detailed analysis of the results. Please, Luca.

Thank you, Renato. Thank you, everybody, and good afternoon. As Renato pointed out, at the beginning of 2026 presented a challenging conversion of contingent external factors. So as I unpack our EBITDA performance, I wish to emphasize how we respond to this. I think this slide is a clear summary of how diversified and integrated portfolio of activities underpins our ability to optimize our risk profile. By leveraging the diversification of our business, we were able to face negative effects, including some unpredictable costs, delivering an EBITDA of EUR 647 million. In particular, this reflects our higher renewable energy production, the ability to capture trading opportunities, and the strong performance in market and electricity distribution business mitigated the adverse impact from hydroelectric concession fees, lower achieved price, and lower contribution from treatment plants.

Naturally, this performance start with how we generate an optimized energy. So let me turn to Generation and Trading. In Generation and Trading, increased production during the quarter helped offset the impact of adverse headwinds. EBITDA was EUR 202 million, a decrease of EUR 22 million compared to Q1 '25. Starting with renewables. We delivered higher renewable production. Also, this positive contribution was impacted by two contingent factor beyond our control, higher hydroelectric concession fees, which affected by EUR 11 million, of which EUR 6 million related to previous years, and lower achieved price based on the scenario.

Moving to flexibility. A good performance in trading confirmed our ability to capture market opportunities, although this was partially undermined by fewer chance in gas portfolio management. To sum up, our operational performance remains solid with our production volume and affecting trading execution in face of market condition and regulated cost component that represent a headwind in the quarter. Overall, this confirm both the resilience of our integrated model and the importance of diversification across generation and trading activities to take volatility, but of course, generation energy is only half of the equation. The real impact happened when we connect it to customers.

So let me turn to the encouraging results that emerged in Q1 for supply business. Looking at the market segment, the first quarter confirmed the persistence of our commercial performance. EBITDA was EUR 136 million, with an increase of EUR 3 million compared to Q1 2025. In market, our performance was primarily supported by the growth in electricity volumes, particularly in the free market segment. At the same time, profitability was partially impacted by lower unitary margins, reflecting a more competitive environment on pricing dynamics. Overall, the quarter was marked by solid volume-driven growth, with margin pressure partially offset by the underlying strength of the business. But of course, the future of the energy isn't just about consumption. It is also by circularity.

So let me turn to the performance of the circular economy. In the circular economy, the quarter shows a performance affected by a lower margin in Treatment segment in particular. Adjusted EBITDA was EUR 190 million, a decrease of EUR 12 million compared to Q1 2025. The pressure on margin in treatment was mainly due to the new Acerra service contract signed in February 2025, and the lower availability of Parona and Trezzo plant for maintenance activities. Prices showed a slight increase, and we also saw positive contribution from district heating in particular, related to white certificates sold -- some white certificates sold and higher allowed returns from the integrated water cycle.

Overall, performance was slightly softer mainly due to operational and contractual factors in waste-to-energies, with some support from positive trend in other activities. That said, let me turn to Smart Infrastructure. In Smart Infrastructure, the overall performance reflect growth in allowed revenues, partially offset by a change in the gas distribution perimeter, as you remember. The EBITDA on the business unit was EUR 129 million, an increase of 6% on the Q1 '25. In electricity network, EBITDA took advantage from higher allowed revenues driven by the new ROSS tariff methodology and the continued growth in the RAB driven by CapEx development. In gas network, we saw a negative contribution mainly due to the perimeter effect following the asset disposal completed in July 2025.

Now, give a look at the profit and loss, starting from adjusted EBITDA, EUR 647 million. We recorded EUR 250 million of D&A, EUR 12 million-plus compared to the same period of 2025. The increase is mainly due to the higher CapEx deployed. Provision and net financial expenses were equivalent to EUR 25 million and EUR 41 million, respectively, in line with the same period. Adjusted taxes amounted to EUR 98 million, a decrease of EUR 10 million compared to 2025, driven by lower taxable base. The tax rate stood at 29.5%, excluding the impact of the IRAP increase introduced by the Energy Decree accounting for as a special item, as we said already. Adjusted group net profit was EUR 221 million, a decrease of 11% compared to 2025 at EUR 249 million.

And finally, in Q1, we achieved a solid ROI and ROE above 9% and 10%, respectively, well aligned with our target. So let me conclude my comments, giving you an overview on the net free cash flows. Cash flows of Q1 '26 showed a negative change in net financial position of EUR 154 million as a result of business seasonality. As of March 31, the group reported a net financial position of EUR 5.628 billion, with a leverage ratio of 2.5x, ensuring the full stability of the leverage position.

During the period, the operating cash flow generated EUR 149 million. Let me give you an explanation in which way. Net working capital variation was minus EUR 460 million, primarily driven by the increase of trade receivable due to the business seasonality and the energy prices increase starting from March 2026, following the escalation of the conflict in Iran. Payment of net financial expense is EUR 38 million. Operating cash flow stand at EUR 149 million. Accounting CapEx, EUR 315 million. The net free cash flow amounts at EUR 166 million negative. The change in the consolidation perimeter during the period was positive and amounted to EUR 22 million, mainly due to the price adjustment, EUR 25 million, related to the sale of the part of the gas asset to Ascopiave in 2025, partially offset by EUR 3 million in other transactions.

Overall, considering EUR 10 million spent on the share buyback, the total change in the net financial position amounts to EUR 154 million. So to conclude my comments, our businesses are not separate stories, but rather one integrated system that assure our financial results, results that show how by leveraging the resilience and diversification of business, we were able to navigate the challenges of geopolitical effects, including the ones that nobody saw coming, and to deliver an EBITDA of EUR 647 million. Let me now hand back to Renato for the final part of the presentation.

Okay. Thank you, Luca. So to close guys, Slide #12, we confirm our '26 guidance. Slide #13, on the same concept about our robust industrial execution. So let me now briefly really focus on the key highlights supporting our performance and outlook. Starting with execution year-to-date, we have seen solid operational trends across our core businesses. In renewable, hydro production benefited from the geographical diversification across Italy. It's interesting, the fact that this year, is Calabria, the first class of our hydro production. And more and more, it's difficult to have all the plants from the south to the north and northeast, northwest at the same level of production. So to have diversification like A2A in Lombardy including Calabria is super nice because it's easier to maintain our target.

On the commercial side, electricity volumes recorded double-digit growth, and in particular, three mass market customer base continuing to expand. And starting from Q2, we are seeing early signs of improving churn rate dynamics. You can imagine, it's, of course, also linked to the exceptional growth of PUN, and the typical situation in this case is that the churn fall down. And our visibility in June is a reduction of the churn super strong. But what is important for us is that you remember our strategy is to increase the market share of electricity customer and our strategy is on track. Our power grid activities delivered a sound performance supported by ongoing CapEx deployment. And as I said in our last call, in particular, Duereti, the company that we bought from Enel, is working very well in terms of CapEx deployment and also EBITDA.

At the same time, we continue to deliver on our strategic projects. In power generation, we are progressing in Monfalcone, the new class H thermal plant. Corteolona is a new waste-to-energy plant. A2A remains the only company in the last years that is working to build new waste-to-energy plant and further, renewable deploy -- development. And we have also identified the brownfield sites for our data center platform. In data center, we are working quickly. If you remember, we have three projects on track, and we are working to be able to start with some site next year, and all suitable for behind-the-meter connection, enabling so faster grid access and competitive energy cost, as you know. Finally, our electricity distribution business is well on track to reach 2028 RAB target that is high.

Overall, this confirms our ability to execute consistently across all businesses while continuing to invest where it matters most in order to generate sustainable value. In the last slide, #14, only to say that -- let's see the architecture that support our strategy over time. First, the diversified and integrated portfolio of activities, enabling us to optimize our risk profile. All our natural hedging in generation, in collection and treatment in regulated market, regulated business and business on the market. Second, exactly the exposure to regulated businesses, providing stability and clear visibility on cash generation. And third, our discipline in capital allocation to unlock new growth opportunities.

So I began today by underpinning our commitment to preserve the delicate balance between order and change. And to do so, our takeaway today is we will continue to invest where it matters most, while maintaining financial resilience and control, turning the mega trend that are reshaping the energy landscape into sustainable result over time and are reshaping the role of the multiutility company in this new landscape. Thank you very much. And I'm sure that there is space and the interest for Q&A. So the floor is yours. Thanks.

[Operator Instructions] And the first question comes from the line of Emanuele Oggioni of Kepler Cheuvreux.

The first one is on the '26 guidance. To what extent is the visibility, considering that, if I remember well, in your guidance, it's not included, the change of the scenario for the short term at least. So past Q1, but starting from Q2, indeed, starting from March, the wholesale price will be higher year-on-year, at least for Q2 than we see in H1 -- in H2. And for this 30% roughly merchant exposure for the expected volume from hydro and waste-to-energy in '26, we should expect a benefit from this situation, which is not included in the guidance.

So my question is about the outlook for the next three quarters, with an update of the guidance compared with the updated macro scenario. This is the first question. The second one is still on the generation business and the market design, but in this case, more, in '27 onwards. We know that the Italian government is under discussion with the European Commission to define a new market design and the capping of the power price from gas and all this, all the renewables from gas will be through ETS change or will be through other component or the price of the gas, et cetera, we'll see. But in any case, it's under study. So what is your update and your opinion on this situation?

And finally, in the market supply, I saw a good resiliency in the profitability in spite of a slightly down number in customer, but indeed, it was related only to STG and the protect market, not the free market, which experienced a slight increase. So the commercial policy seems to be effective in, at least, in Q1. So what is the update about the competitive pressure and your commercial strategy in this respect? Also considering that you think that there are also portfolio, at least according to the Italian press, there are also a portfolio of customers to be sold in the market you're interested in.

Okay. Thank you, Emanuele. Well, on question #1, I say we are hedged for '26. So it's clear that -- and consider that in this moment, our hedge, as I said, is more or less 70%. That means that, yes, if they will remain until the end of '26, and I think that all of us hope that in Iran, something can change over the next weeks. I don't know, but we have to see. But we can have an upside that is limited due to our hedging. And so this is for the first question. For the second, talking about ETS. Talking about ETS, I can answer using the communication from the commission about the Temporary Iran Crisis Energy Framework, 23 of April, okay?

Let's say that the member states can also consider transitory measures to mitigate the impact of high gas prices on electricity generation, but, let's say, not only limited only to '26. And you consider that the formula linked to the ETS proposed by our government, we start from '27, and this is enough to say that it's impossible to -- okay. But it's also interesting that European Commission understood perfectly the risk and say that there are some conditions. The first is the transitory measures. They are clearly defined and time limited, so not structural. The second, they are designed to prevent internal market distortion, ensuring no impact on the merit order and no restrictions to cross-border trade and electricity flow. The third, they preserve long-term investment signals for clean energy. The fourth, they only compensate certain gas cost increase and do not cover ETS cost. Therefore, maintaining the obligation and incentives of the ETS.

Okay. So without reading more, I can say that we imagine that it is impossible to have structural changes and also, due to the road map '26 to '27. We don't think that basically, the Italian decree can have effect and that can change the position of EU that is very clear. Also because, frankly speaking, Italy is the only industrial country in which ETS is really attacked because it's the only country in which 2.9 billion or 3.5 billion is really used to serve a public debt. In all the other countries, starting from Germany or France, 100% of ETS is a cap-and-trade system.

And so there are companies, corporate, that receive money from ETS. So this is the easy reason for why this country says, no thanks. We don't want to change ETS. Talking about the mass market, your analysis is correct. For us, in this moment, it's clear that the good news is that we have a 1% of increasing of the free mass market electrical in a phase in which the churn in the first quarter was high in all the markets and in a situation in which our visibility of the churn in the second half of the year is much, much lower. And so we imagine to be able to reach our budget that is a budget in which a customer base electricity free market will grow. The pressure -- the competitiveness, the pressure is the reality. And this is the reason for why since the first industrial plant, every year, we imagine to have a reduction of marginality of 3%.

If you remember, it's a discussion that we did a lot of times. Until now, frankly speaking, a reduction of marginality is not on the table, but in our industrial plan, including '26 and '27, we forecast a reduction and we see, let's say, in this moment, we are happy to have, in particular, some interesting products, for example, the PPA mass market for our customer. And the customer base for PPA mass market in this moment is more than 100,000, so 110,000, 120,000. But to understand how it's important in this moment, the total energy sold in PPA mass market is slightly higher than the PPA B2B. So it's a proof that working in the customer base, also out of the box, with instruments like PPA mass market 10 years long, is a good idea and works well.

Just a follow-up on the first question. The question was not only on generation and achieved power price compared with the -- embedded in the guidance, but also the other moving parts in H2, for Q2 onwards, compared with the expectation of business, as you remember, when you provided the guidance for the first time.

Yes, Emanuele, I will take the lead to answer to your question. So we see generation more or less in line with the previous year result, taking into consideration maybe some opportunities we can get in the market. As you correctly pointed out, the spot price could give us some opportunities. So let's say, around 700 is more or less in the area we are targeting market. Supply business is slightly behind in our projection by now compared last year. But slightly, I mean, a few millions. That means that there is still a good visibility, high resilience on the marginality, which stay there.

But also on the volumes, we are able to sell, which are growing and giving us opportunity to expand also the market share. Circular economy is pretty stable due to the fact that we have incorporated some maintenance works already in the first quarter, they were planned. So the target incorporated this maintenance, you have to consider that these plants are working with full capacity. So from time to time, they need to have maintenance activities.

And finally, smart infrastructure, again, more or less in line with last year, considering that in the EUR 518 million of the last year, we had EUR 22 million related to Ascopiave deal on the gas network and some one-offs that are not recurring, but we have -- we decided last year to consider this non-recurring industrial -- non-recurring item embedded in our results. So all in all, we are in line with the guidance we gave at the beginning of the year, and we have nice visibility by now. Let's see what happened in the next quarter, and we can have an update at the half year.

Maybe just to give you also a flavor on the fees asked by the region Lombardy. We have an impact in the area of EUR 40 million, EUR 50 million, half of those are related to previous years, meaning '21, '24 years. So these are, as I said, non-recurring, even though we consider that amount in the guide, in our expectation. And on the remaining part, the half, again, has been already provided in the previous year. So it has not an impact on the net profit, but only on the EBITDA, but already considered in what I already said.

The next question comes from the line of Javier Suarez from Mediobanca.

Three questions. The first one is on the generation business and electricity prices. If you can share with us the level, the pricing level for your hedging in 2026 and eventually, 2027 as well. I’m interested in the absolute level of electricity pricing hedging. And also, your latest expectations for electricity prices towards the end of the decade and beyond, or in a context on which there is a high level of concern on hydroelectricity prices impacting competitiveness of Europe, which are your latest thought on potential impact of electricity prices in Italy? That would be the first question. The second question is on the comment that you make on electricity demand increase during the first quarter. That is quite remarkable.

So if you can help us to understand in your area, in your region, in the regions in which you operate, which are the key dynamics that are underpinning this increase in electricity demand, and maybe splitting that increase in electricity demand by different -- by the different segments. In this context, when the company thinks that we’ll be able to update the market with latest update on potential development of new data centers in Northern Italy. The final question is more of a general one. That has been press articles mentioning the potential interest of the company in an M&A activity, being involved in M&A activity without entering names and second names, just as a general concept. The question for you is which would be the entity of a potential M&A target that could the company management press a button on that deal?

Talking about generation price, your question is the level of price of our hedging, '26 and '27, correct?

Correct.

Okay. Okay. Okay, yes. For '26, in this moment, we have, as I said, 70%, 70%, 72%, and the level is 111. So it's absolutely a nice, slightly higher than our budget. And talking about '26, '27, it's around 60% and is a little bit higher than 100. So also in this case, we are in pace in which we are online with our industrial plan. In this moment, there is few liquidity to cover more '27, but let's say, 60% in May '26 is a good level of hedging. The demand is interesting because it's clear that in this moment, for the sites, data centers surely are the key elements to increase the demand because if you consider that full cities like, let's say, Cremona as a peak power of 100-megawatt and is not base load like consumption, it's clear that it's enough to have a new data center of 30-megawatt to have an increasing of demand more or less similar to full cities like Cremona.

So in this moment, what is happening is that the data center are growing. There are new data center, not really super big until now in Lombardy, but are growing. And so surely, the increasing of demand is mainly linked to artificial intelligence and all the digitalization. Also talking about e-mobility, something is happening, in particular, due to the high reduction of prices of the electrical vehicle due to the competition with, in particular, BYD, Leapmotor, and others because the price was down. A good example is the price of the segment city car of Renault, for example, starting from the Renault Zoe to the new R5 electric car set the price 30% lower. And so what is happening is that really also the e-mobility is growing.

The last but not least is that looking at the gas distribution year-by-year, there are 1% -- between 1% and 2%, depending where of reduction of [ DDR ] and of course, are people that decided to electrify something. That means cooking, heat pumps, or the others. And so it's normally to see this increasing of demand. Why so concentrated in Lombardy? I think because Lombardy is every time, the local of Italy. And so all the new trend start typically from Lombardy, talking about the economy growth. That's all. To close with M&A, let's say, that -- we can say nothing about these topics. We do full disclosure through -- exactly through the media of what is correct to say to the shareholders.

So for example, the last news about our non-binding for the plans of biogas is correct, is true. Of course, we are a player in this sector, and we are interested to see the number, to have more information about the business because it's useful also for us to define our strategy, let's say. But I have not more information, Javier, to share.

Okay. And on the question on the timing for -- latest views on timing for a final -- or the announcement of an agreement with data center development?

Yes, this is correct. In this moment, if you remember that during our presentation, we put on the slides three projects. In this moment, we can say that one project is in Brescia, one project is in Cassano d’Adda, so near our super big thermal plant, and the third is under definition. So it is ongoing, let's say. We are working for authorization, of course. But consider that it's also interesting that both the national law and the regional law put some conditions to have acceleration in authorization. And the conditions are easy for us to face because it is a greenfield -- sorry, brownfield and not greenfield, is to reduce the impact on the power grid, so perfect behind-the-meter connection, connection with the district heating, and we are the sole operator able to do this. And with a good mix of renewable and -- sorry, a mix of the carbonized electricity and water cycle efficiency.

And the reason why A2A is a good player in data center is exactly because we are able to move all these parts, and so to move quickly in the authorization, because we are exactly full committed in these elements. So we are working for authorization, and our goal can be to start the first plant, the construction of the first plant next year to be able to see the first EBITDA at the end of '28.

The next question comes from the line of Francesco Sala of Banca Akros.

The first one is if you can give us an update on the concession renewals, especially in Lombardy. The second one, if you can give us -- quantify the impact of the new Acerra service contract for both -- for the full year, because there was an impact in Q1. So if we can have an estimate for the full year. And then on the retail business, I wonder what is -- what your commercial strategy is now in terms of fixed price versus variable price contracts and whether there has been a change in the market or, at least, in your approach in the last few months. And secondly, finally, as we got thermal generation and more in general, your electricity volumes that went up a lot in Q1, whether this is related to strong demand in Lombardy or whether there are other drivers behind this increase?

Okay. For the hydro concession, the situation is more or less the same as you know. So we are waiting to open the discussion for the fourth, third way, the Lombardy model, let's say. And frankly speaking, I imagine that it's much easier to open the discussion in the second part of this year after the closing of the PNRR. You can understand that without the vincula from the PNRR is much easier. Also because, frankly speaking, every time -- so we say that the fourth way is a way to accelerate the CapEx. And so it's completely online with the target of the PNRR because of the fact that the hydro concession was introduced in the competition law was, in the original idea, a way to accelerate the CapEx.

But at the end of the day, it’s the opposite because until the tender, no one invest EUR 1 in the concession. So in this moment, all the public authorities understood that, that's the only way to, really, to accelerate the CapEx, is to reassign to the actual players, the concession, with an investment plan linked to the new 20 years long concession. Talking about Acerra, the impact full year is EUR 15 million. Consider, guys, that Acerra is the only plant not owned by A2A. So we are talking about the plant in which the return on investment is super high, probably the higher in the group, simply because there are no CapEx allocation from A2A. And talking about the -- our strategy, in this moment, surely, for our customer, it's interesting, the fixed price, because, as you know, the calendar 2027 maintain still a good price for energy.

And so when you sign, for example, a 2 years contract, the price is the average between all the quarter until now -- from now until 2028. And so the price is interesting and, of course, stable. This is the reason for why 50% of our customer ask for fixed price. Our strategy is really to push more as possible, the 10 years contract. And exactly yesterday we sign the first PPA for a small business. That is interesting because in this moment, we have a PPA for a corporate, for large business, steel product, so on and so on. We had the product for mass market, but we haven’t a product for small business. And this is the reason for why we decided to build a PPA also for small business. And exactly yesterday started this new product, and immediately, we signed the first contract.

It's really important in my idea because for small business, it’s very difficult to be -- to deal without PPA profile and so on. They need exactly like mass market standard products. And the idea to give the opportunity also to small business, to understand that with renewable, you can fix the price for a really long term, in my opinion, is the real change of paradigm of renewable. And so it’s very important that every categories of customers can have a possibility to sign a contract linked to renewable for long term. And we are doing it, and I think that we are the only company that is working in this strategy.

The next question comes from the line of Roberto Letizia of Equita.

I only have one remaining question, which is still on the retail commercial approach. Just wondering if you can share with us how much of the current fixed sales price are expiring within the end of the year for which you will go into price negotiation? And if you can tell us, what kind of approach will you prefer now? So will you be more aggressive on the price even because you can by serving those contracts through renewable, trying, as you said, push the PPA at very low price from a higher starting point because prices in the next six months will be high, so maybe you will have a chance to be aggressive, but not decreasing the offer price that much in order to bring a quote market share and then build up on the strategy of the long-term contract. So can you elaborate a bit how much this is a window of opportunity by having the pool price that is pushed by the end of the year with a mix of expiring fixed contract that can be renewed at those conditions?

Consider that -- starting from the fact that today, the customer are divided half and half between mix and variable. Starting from the fact that, in my idea, in the -- looking in 2030, let’s say, I imagine a world with a lot of PPA mass market, so fixed price, but not 2 years, but longer, linked to renewable and the rest, variable. In this moment, surely, the fact that we are able to build a PPA mass market and small business give us the opportunity to sign PPA to a higher price than the PPA that we are able to sign with steel product or also with data centers and so on. Because, you know, the marginality in mass market and small business is higher. So to give a numbers, for example, the PPA, the PPA mass market is EUR 105 per MWh. The typical PPA in this moment, B2B for a typical profile for a steel product is EUR 85. So the differences is huge, 20%. And the price of a small business is in the middle.

So the capacity to put on the market products enable to face the needs of mass market small business, in my opinion, is an incredible opportunity to sell our green energy to a good price. Remaining on the one year or two years fixed price, it is surely not the company with the lowest price because our strategy remain to give a good services. And are recognized like a company, both for mass market and then for B2B, able to give value in our ancillary services, starting from the fact that there is someone that is able to respond clearly to our call center when you have a problem. So our strategy is this one, and it seems to work well because if you look exactly at the free market, the fact that in this quarter, with the huge churn that we saw, and with the result also looking our traditional competitors, I am absolutely happy to see our numbers.

The next question comes from the line of Davide Candela of Intesa Sanpaolo.

I have three. The first one is regards to what you said on the power demand evolution in first quarter. I was wondering if you can share some flavor about your ability of capturing this demand increase in the region. And maybe if this will be served through your own plants you have in the region, like the new renewable developments you expect or your CCGT spare capacity. That is the first one. Second one, with regards to the disruption in energy markets. First one, with the increase in energy prices. I was wondering if you can share some data regarding April and May consumption, if actually the high price level is pushing the clients to reduce the consumption in order to contain the expenses related to that.

And basically, if you see a trend according to that? And the last point with regards to this topic. We have seen that some rumors about other countries in Europe that are thinking about putting some windfall taxes with regard to the high energy prices. Maybe it will be much more related to the whole sector, but electricity seems not to be excluded at all, or at least at the basic level. So what is your position on that? Do you think that this risk is still there also for Italy? And given also the fact that this could be temporary, as you mentioned in your speech before.

Davide, I will take the lead to answer your question. For the power demand evolution and the prices on the market, you know very well that we are managing different technologies. We are on the market with a constructive approach of our energy management department. So if you consider that January and February has been months in which the prices went down because of the Decreto Bollette, the energy decree. And there has been a lot of pressure and also some speculation regarding a possible conclusion on the Ukraine war with Russia. So we take the opportunity to work with the market to hedge part of our exposure for '27, for example. Immediately after, the war with Iran.

And again, we were in the market, and we got, again, another opportunity. And in particular, with our way to sell the market, we optimized our position in the market, taking -- creating value for the company by roughly EUR 15 million to EUR 20 million. So this is the way we continue to see the future quarters. Of course, volatility in a certain way create opportunities, but it creates also some stress. The visibility on April and mid-May was quite good for the production levels in terms of quantities, like it has been in the first quarter, with good prices, but we need to keep taking into consideration the hedging share we have available, so to offset some peak with the hedging average.

Regarding the windfall taxes, well, let me say, apart from having 2 percentage point increase on Europe, I hope that this is the end of the story. Nevertheless, we will see and we will follow closely what happened also in Europe, but we don't see and we haven't heard any rumors for a potential new tax or cap for the energy prices, also take into consideration the fact that we are not in the same situation of 2022.

Also because the discussion on the Decreto Bollette was super tough, and the result was a couple of points of IRAP for a couple of years. So imagine that today, the government, the situation in which there are only few months of the actual government, will reopen the dossier of the windfall. In my personal opinion, it's impossible.

And we do have a follow-up question from the line of Emanuele Oggioni of Kepler Cheuvreux.

Just a quick question about the electricity networks. I saw that in Q1, the electricity networks benefited from allowed -- higher allowed revenue from the ROSS mechanism. The question is to what extent that is already included in the guidance, and what will be the benefit for the full year?

Yes, it has been included in the guidance in our target. It comes from part of the new regulation, considering the fast money. And it is related to the fact that we are deploying CapEx maybe to -- and I understand, also considering the fact that, as Renato said in the presentation, we are able to move CapEx in the electrification of the grid whenever it is the case, there is the chance because other business maybe are behind the target. So we have this kind of flexibility, and it is a very positive aspect of the regulation because it gives us some flexibility.

At this point, there are no more questions. I will hand it over back to the speakers for any closing remarks.

Thank you, everyone, for taking your attention to our results. If you need any follow-up, please contact the IR department, and we will be available shortly. Thank you.

Bye.

Bye-bye.

Hello, and welcome to the A2A Full Year 2025 Results Presentation. Please note, this conference is being recorded. [Operator Instructions] I will now turn you over to your host, Marco Porro, Head of Investor Relations, to begin today's conference. Please go ahead.

Good afternoon, everyone, and thank you for joining us for full year 2025 performance presentation. Today, as speakers, we have Renato Mazzoncini, our CEO; and Luca Moroni, our CFO. So I'll leave immediately the floor to Renato for the first part of the presentation, and then he will pass to Luca. Thank you.

Okay. Thank you, Marco, and good afternoon, everyone. Thank you for joining us. We report another year of strong performance and value creation. The key message that we wish to share today is that we are on track, on trend and on target for shareholder returns.

So let's start from the slides that you can see, Slide #2. Highlights. Full year '25 results once again demonstrate our strong execution across all our strategic priorities, reinforcing A2A's positioning for sustainable growth and shareholder remuneration. From an industrial standpoint in '25, we delivered on a series of key new milestone fully aligned with our long-term infrastructure investment plan. Our electricity RAB reached EUR 1.7 billion, marking a plus 52% annual increase gross of perimeter effect and double-digit organic growth, our CapEx, our investment. This result was driven by disciplined CapEx deployment and the successful integration of newly acquired assets [indiscernible]. We sold 76 megawatts of new renewable capacity, including the first phase of Santo Stefano in the Northern part of Italy near Trieste.

At the same time, the group is well positioned to exploit the accelerating electrification trend. We completed a major asset rotation from gas electricity networks focusing on the backbone of the energy transition. Our supply business unit increased electricity volumes sold by 12%, confirming our ability to capture demand and to serve customers across different segments. We have positioned ourselves as an early mover along the data center megatrends in Italy. You remember, we presented in our industrial plan in November. We launched our data center platform to deliver a fully integrated offering, complementing power supply with land availability, fast grid connection that is a very [indiscernible] application, energy-efficient buildings, heat recovery and water management, heat recovery with district heating. Through this platform, it really positions itself as a one-stop shop for data centers energy-related needs.

Lastly, our cash conversion rate reached 65%, allowing us to fully fund our investments and dividends and to improve our leverage ratio at 2.4. Adjusted earnings per share reached EUR 0.22, fully aligned with our guidance, allowing us to safely fulfill the commitment to a 4% year-on-year dividend per share growth.

So Slide #3 in which you can see all our numbers. The consolidation of the new company Duereti and the increase in volumes sold in the electricity sector, you remember 12% more led to an increase in adjusted revenues of more or less 9%, EUR 14 billion. The adjusted EBITDA EUR 2,243 million decreased by 4% in '25, but only for the hydro production. If normalized by previous hydroelectric production, which was 1.2 terawatt hours above the 5 years average. The EBITDA grew by 4%, confirming the resilience of our business model. And the same consideration about adjusted group net profit that was EUR 686 million, net of hydroelectric production normalization is compared to '24 the same level. Our net financial position was below EUR 5.5 billion, thanks to an operating cash flow that guaranteed coverage, as I said of CapEx and dividends as well as cash in from asset disposal. And the leverage ratio was equal to 2.4x with a decrease compared to '24.

Slide 4, you can see our CapEx. The capital deployment is the clearest evidence of our sound execution and our long-term strategic vision with almost EUR 1.7 billion in CapEx, 11% higher than '24, of which EUR 1 billion related to development project. This project have enabled us to improve the efficiency of power distribution network, accelerate our development path towards renewable energy, the [indiscernible] flexibility of generation plants and strengthen our circular economy business. Consider that in particular, in circular economy, in the waste-energy plant authorization are not easy to be received and in this moment is the only company that year-by-year have new plants under construction.

More than 30% of our development investments were allocated to electricity grid. We are fully committed in distribution, a stable regulated business, which allow us to capture the accelerating electrification trend across Italy. We are expanding our renewable plant portfolio in a consistent and balanced approach. Our diversified generation mix combining renewable with flex technologies allow us to support the stability of the system. Key projects such as Corteolona waste-to-energy plant in province of Pavia, for example, which will treat 240,000 tons of waste per year as well on track. And it is very important that we are growing -- maintaining hedging between collection and treatment.

For example, we're growing collection in Piedmont with a new very important contract in province of Cuneo, in Valle d'Aosta and Liguria. And from the other side, we are growing in treatment with the new plants, the new waste-to-energy plant in Parona, in Corteolona, in Trezzo sull'Adda, Crotone and so on. To wrap up our disciplined approach to CapEx underpins a resilient growth today and tangible returns tomorrow.

Speaking of results, let me now hand over to our CFO, Luca, who will illustrate our financial performance in '25 more in detail. Please, Luca.

Thank you, Renato, and good afternoon to everybody. Let's start to examine our EBITDA performance into detail. We can start from Slide 5. You can appreciate from the graph that all the businesses performed very well, but generation and trading need to be considered in the view of the normalization of the hydro. Indeed, hydro normalization, the exit from the safeguard segment and the lower hedging prices were largely offset by very positive events such as the growing of the performance of electricity network, thanks to the consolidation of Duereti, which proved even more profitable than expected, a greater contribution from the capacity market, solid retail margins and higher revenues from waste-to-energy plants.

Generation and Trading. Generation and Trading as usual, is characterized by a well-diversified technology mix, which is the cornerstone of the business. EBITDA was EUR 728 million with a decrease of 26% compared last year. But of course, we need to take into consideration the hydro effect. So the normalization of the hydro effect and some fewer opportunities from the energy commodity hedging and trading has been partially offset by higher contribution of thermoelectric production and an increase of the premium awarded in the capacity market.

Renewable production decreased by 23% as a consequence of the lower volume in hydro and thermal production increased by 11%. Supply business. '25 saw another year of sound performance in supplies business. EBITDA stood at EUR 464 million with an increase of EUR 2 million compared last year. Here, the exit from safeguard business was offset by the commercial development of the free electricity market, both in the mass market and in business segments. The free electricity market customer base grew by 3% compared to 2024 despite the competitive market, the competitive environment. Along with this growth in the electricity customer base, we have achieved a remarkable 12% increase in electricity volumes sold up to 27.5 terawatt per hour, as Renato already said.

Let's move to Page 8, circular economy. I would particularly like to highlight the strong performance of our circular economy business. Adjusted EBITDA was EUR 595 million with a growth of 2%, EUR 13 million. We delivered a robust result in 3 key areas: treatment, integrated water cycle and district heating. Higher treatment prices fully offset lower margin from the Acerra plant new contract after the tender, while water cycle benefited from a higher allowed return. District heating showed sound results, supported by higher energy prices, volumes sold and white certificates margins.

The new Milan collection tender saw reduced margins due to our highly competitive bid against that of one international player, Urbaser. We maintained strong EBITDA, confirming the resilience of the business, even considering the newly awarded tenders in some territories in the north of Italy. All key industrial indicators are positive, such as electricity sold, waste-to-energy and other plant plus 4%, waste disposal for energy recovery, plus 6% and heat sold, plus 2%.

Smart Infrastructure, which marked a step change in scale and profitability. The adjusted EBITDA of the business unit was EUR 518 million with an increase of outstanding 37%, thanks to the sound performance of fully regulated activities. Our electricity network delivered outstanding growth, EUR 137 million, driven by the consolidation of Duereti for EUR 93 million. The organic growth in RAB with an increase in electricity alone revenues of the historical perimeter, EUR 25 million, higher revenues for connection and other services for EUR 10 million. The increase in electricity pods, the point of deliveries up 65% year-on-year demonstrate how our grids are becoming an enabling platform for electrification and new consumption patterns. Electricity distribution RAB increased by 52% and the power network capacity by 71%. In gas network, we completed the asset rotation, strengthening our strategic focus on electricity distribution. Gas distribution RAB decreased by 23%.

Now analyzing the profit and loss, starting from adjusted EBITDA equal to EUR 2,243 million we recorded EUR 964 million D&A, plus EUR 66 million compared to '25 with an increase mainly due to CapEx deployed and completion of Duereti purchase price allocation process for EUR 17 million. Net financial expenses at EUR 169 million, of which those relating to pure financial management were EUR 157 million, the remaining part being financial accounting effects compared to the EUR 116 million of the last year. Adjusted taxes amounted to EUR 306 million, a decrease of EUR 46 million compared to last year with a tax rate of 29.8% last year, 29.4%. Adjusted net profit at EUR 686 million with a decrease of 16% compared to 2024, normalized by other effects, the decrease was only 1%. This is the adjusted group net profit. The reported group net profit is EUR 750 million. In 2025, we achieved a robust double-digit return on investment, 10% and return on equity, 12%.

Cash flow, Page 11. So we accounted a net positive change in net financial position of EUR 361 million. So the net financial position at the end of the year was EUR 5,474 million, reflecting an improved leverage ratio to 2.4x compared 2.5x at the end of last year. Operating cash flow, EUR 2 billion fully financed CapEx for EUR 1 billion and dividends, EUR 1.7 billion and dividend distribution, EUR 300 million. We achieved a robust cash conversion rate at 65%, reflecting the ability of the company to optimize financial resources to support the growth.

Some details. Net working capital of EUR 311 million was primarily driven by the reduction of trade receivable and say, a partial settlement of the safeguard portfolio. Payment of taxes for EUR 400 million and net financial expenses, EUR 116 million. As a result, the operating cash flow stands at EUR 2 billion after the EUR 1.7 billion of CapEx and dividend for EUR 300 million and the hybrid bond coupon payment of EUR 48 million. So the net free cash flow was EUR 4 million. Then we have the change in perimeter, which is due mainly to the disposal of part of the gas network to Ascopiave for EUR 430 million, partially offset by EUR 58 million related to some deals in M&A. Finally, the EUR 15 million spent to our share buyback to the total change of EUR 361 million.

So thank you very much. Now I will hand back to Renato for the final part of the presentation.

Okay. Thank you, Luca. Page 12 to look our sustainable dividend growth. The dividend growth is confirmed. We are going to propose to our assembly an increase of dividend per share by 4% year-on-year, so arriving to EUR 0.104 on line with our dividend policy. This dividend growth is supported by strong cash flow visibility and disciplined capital allocation. 45% of payout ratio is proof, let's say.

Page 13, our guidance is absolutely confirmed. We confirm our '26 guidance with adjusted EBITDA between EUR 2.21 billion and EUR 2.25 billion and the adjusted net profit between EUR 630 million and EUR 660 million, reflecting our robustness and visibility on our business mix.

And to close at Slide #14, our well-diversified business model is really unique and delivers sustainable growth and attractive returns over the long term, allowing us to transform challenges into opportunities. We operate at the intersection of the energy transition and the circular economy, our 2 pillars, benefiting from both natural hedge activities and fully regulated business supported by a consistent CapEx plan year-by-year, our CapEx plan [indiscernible]. Our generation portfolio is diversified, allowing us to leverage different technology. Really, I think A2A in Italy is the only company that has all the generation from thermal, hydro, wind, sun and waste-to-energy plant. So this integration is a super opportunity to optimize energy management to capture market opportunities in different scenarios.

Integration across generation plants and different customer segments enable natural hedging and reduce our risk profile and support cash flow generation. And in particular, our fully regulated businesses remain a core strategic pillar backed by a stable long-term regulatory framework. As the early movers in electrification and data center, and we are working a lot, we can leverage our energy assets to unlock value from these megatrends, enhancing growth and resilience. And together, these elements guide a balanced capital allocation that sustains cash flow generation, growth and shareholder remuneration.

So really close -- and as I close -- I said in my introduction, our '25 results confirm that we are on track with our long-term strategic plan on trend with our leadership in electrification, renewables and circular economy and on target for the returns that we ensure for our shareholders.

So thanks a lot for your attention. And now we'll be happy to open the Q&A session.

[Operator Instructions] The first question comes from the line of Roberto Letizia of Equita.

I hope you can hear me well. My first question is about the current market situation with regards to energy prices and power price change. Just wondering, first of all, if you can highlight any risk, if any, or not, of course, on the gas procurement for your deliveries through this year, meaning if you have any direct LNG imports, which is subject to curtailment in the coming months. And eventually, if you are, in any case, exposed to any possible force majeure events from your reseller, naming ENI or other majors or Edison or [indiscernible] or the other providers that currently gives you gas for your internal unrest. So if you can address these topics, if any risk currently or in the short term that you envisage for your procurement and deliveries.

As a -- say, subsequent question, if you can highlight to us what is the current level of open position through 2026 and '27 in order for you to get any benefit from the most recent decrease in the power price, what is the current situation for the hydro productions in the first month of the year and in terms of reservoir for the rest of the year? And a comment, if you can, on your view about the potential regulatory risk so far, and I mean potential EU interventions in the market, whether it's going to be taxation or ETS revisions or price caps or whatever we will see in the coming years, if you have any view on what could be the potential regulatory risks.

Okay, Roberto, thanks for your question. I start talking about the general situation of the market that, of course, is critical and is also -- some years in which every couple of years, there is something of incredible in this world, let's say. Talking about the risk to remain without gas, in my opinion, is impossible in this moment. So the only problem is the price. But considering the storage that we have in this moment in Italy that is, as you know, 47% and considering the temperature that we have in Milano in this moment. And that gave us certification that we are [ illegal ] in this moment from all the sources [indiscernible], Libya, Azerbaijan and so on. Risk of [indiscernible] in '26 and '27, in my opinion is absolutely out of our view.

The problem in this moment can be exactly working on the storage because as you know, we need to maintain a price summer, winter aligned should start immediately to fill the storage. And in this moment, there is still some [indiscernible] of spread. You remember last year, the government closed the spread with rules in which companies that started early to fill was paid exactly to close the spread. And so I think that we need to wait for 2, 3 weeks to have more visibility of what can happen in Iran because it's difficult in this moment to understand if this conflict can move for months or weeks or days. And then I imagine that our government will use the same instruments that was used in '22 and in '25.

Talking about gas, considered but for '26, our edging is 72%, 73% so our normal situation in [indiscernible] in which the only flexibility is not to risk [indiscernible] due to risk of [indiscernible] production. But also [indiscernible] is better. [indiscernible] '26 to a price around 110 it's so over our budget to understand. And those '27 -- also in '27, we have a 50% of energy covered with a good price because it's around 100. So once again aligned with our industrial plan.

Of course, the hydro production in this moment, I can say that for this -- so January, February and March, we are absolutely aligned with the budget and we started the year with a good level of storage in our dam, in our basin. And so in this moment, our forecast is to stay at the average level of A2A, so more or less 4 terawatt hours of hydro production.

And to close about ETS, probably 2 years ago, there was a declaration of the Ministry of Environment in Germany that said that absolutely Germany don't want to move ETS because ETS is a fundamental instrument for decarbonization, consider that our government as to Europe to cancel because it is a tax, but it's very simple to demonstrate that ETS is not a tax that is emission trading system and the tax is something that a company pay and the public administration receive. The problem is that only in our country, considering the large countries -- industrial country effectively is a tax today because as you know, there are more or less EUR 3.5 billion of ETS paid and only EUR 600 million come back to companies, in particular to energy companies. So there are EUR 2.9 billion that remain to serve our public debt and this is the reason for why Italy is an infraction with Europe.

So what the other countries in Europe, in particular, Germany and France and Spain says is, okay, guys from Italy. Before discussing about ETS, it's better that you replace the normal situation of ETS. So a system of trading of exchange. So my personal opinion is that it is absolutely impossible that ETS can be canceled in the future because it's really nonsense, consider all that companies for 20 years invested in green economy, exactly to be a more competitive as the company that didn't invest. So -- and price cap for gas is out of every kind of discussion, but also our government don't put the price cap on the table. Luca, I don't know if you want to integrate something.

No, I think that everybody has been said. As you know, we have the chance also to buy some LNG from British Petroleum with a contract signed will start in '27. So we start also to get some opportunities into the market. And as Renato said, the hedging ratio are pretty comfortable both for '26 and '27. So I think that, of course, we need to monitor what happened on the market with the prices. But by now, everything is under control, also taking into consideration the financial point of view.

Another element that is important to consider is that if we see a reduction of the [indiscernible] produce an effect in which the renewables are less competitive and the thermal production more competitive. So consider that today, the total energy production with them is 115 terawatt hours in Italy on 311 of total demand. And our forecast is that with a reduction of [indiscernible] due to ETS that is once again, a hypothesis, in my opinion, impossible. But in this case, the production of gas jump to 150, 160, this is the reason why the effect in the tariff in the [indiscernible] for our customers is approximately 0, because the total ETS amount that -- arrive on the bill is more or less the same EUR 5 billion under discussion in reduction of raw material.

But A2A is a company super strong also in terms of production. Imagine the new plant in Monfalcone. So in this case, that is a case that I don't consider once again, we have a natural hedging due to the fact that reduction of production renewable from one side is compensated from the other side from a strong increase of gas production because gas production win against import, this is the message, not because there is a reduction in the renewable, but of course, with the marginal price [indiscernible] every time. But because the import is more expensive than thermal production without ETS.

And the next question comes from the line of Javier Suarez of Mediobanca.

Two questions on the context and business plan and recently presented business plan and one on your guidance. So on the context is if you can make any comment on recent detailed reports on the local press, [ arguing ] a potential interest of A2A on ESG. If you can make any comment on that? And in general, in case of an extraordinary operation, what kind of assets fits better with your current corporate structure? Any comment on that would be appreciated.

Second question is on the data center opportunity that was widely elaborated during -- back in November. So when do you think that A2A would be in the position to provide with granularity and a whole business plan on the data center opportunity and with financial detailed targets and more granularity versus your statement back in November. So any further guidance on the timing for that higher granularity would be appreciated as well.

And then the third question is on the energy decree that has increased regional taxation by 200 additional basis points in 2026 and '27. So the fact that you are maintaining your guidance unchanged, is that including any compensation factor that is offsetting this increase in taxation? Is that related to a different pricing for your forward selling? Is that related to higher assumption? So any light on reason for maintaining the guidance would be appreciated as well.

Okay. Thank you, Javier. Okay. For the first question, you know the answer because we used a press communicator. A2A regularly conducts a review on its strategic option consistent with our industrial plan. And in this context, discussions with many potential partners are absolutely normal. I think that is a mission -- my mission, the mission of our management to create value for shareholders. And I also think that in Italy, there are too many companies working in the energy business, in particular in generation. The strong liberalization that we had 20 years ago produced a situation that probably is not completely efficient today. But to date, many strategic options are being considered as preliminary and explorative thoughts and no decision has been taken. So this is our answer.

A2A will keep, of course, the public informed of any possible development in the correct way. For data center, data center is absolutely incredible what happened. You remember, we presented our industrial plan on November 12. San Donato. And after a couple of weeks, you can't imagine how many players and actors in data center knock at our door to understand what we are able to do for them. In particular, as I said during the presentation, a killer application in this moment is to have a connection in high voltage because today, if you ask to Terna, not only in Italy, but in all the other part of the world to have a connection for, let's say, 200 megawatts is impossible. It takes 5 years. And we are, in particular, in Lombardy in a super position in which we have generation, we have land in some -- we have some opportunities, and we have a connection in high voltage.

So you remember during our presentation, we underlined 3 projects without giving a name and also today, I can't say exactly which are the project, but I can say that for the first 2 projects in terms of road map, we are absolutely on track. So you remember that we imagine to arrive to have first EBITDA from data center in '28 to '29, we are on track. And so we are working. The business model can be colocation or we are also open to -- in some case in which we have the opportunity to build a large data center, we can also consider direct relation with the top companies. And please wait for next our communication to have more visibility on a part of a strategic plan that is working well.

Yes. I would like to start saying that in the decree, in the energy decree, some aspect has been discussed, one being the taxation, the Europe taxation. But you know reading also from the newspaper, how the discussion is tough regarding the chance to increase taxes in Italy for corporates and citizens. So first of all, we need to wait the translation into law of the decree aspect. And in any case, if and when there will be any increase in taxation we can consider temporarily because by the discussion, it seems it will be affecting '26 and '27 and not further. So for that reason, we can consider if it will come as a nonrecurring item so into the so-called special items. This is the reason why we maintain unchanged the guidance we communicate also and in particular, because the guidance on the net profit is on the adjusted net profit.

The next question comes from the line of Francesco Sala of Banca Akros.

Just a couple. The first one is on the recent spike in electricity prices. I wonder whether you can give us a sensitivity or at least an ordered look on the potential impact on net working capital and provision if there is something you have already tried to estimate. The second question is on hydroelectric generation. I wonder whether you can give us an update on the concession renewal? And secondly, whether, let's say, the recent events have changed your attitude towards revamping and investments in this segment of your business? And finally, if I may, what are the latest trends you have seen in the supply business?

Okay.

I start with the effects on the net working capital. Actually, we don't have -- we will not suffer for any increase or deterioration of the net working capital. We have experienced coming from 2022, where we manage properly the net working capital with different opportunities. which are the same in the case because by now, we are experiencing only temporary situation. But in the case, it will last more than this period of time we have in front of us of 1, 2 months.

Of course, we have the chance to move on different opportunities, as I said. These are, of course, temporary effects. Also, as I said and I mentioned before, in terms of liquidity, we are currently managing in a very appropriate way with backup lines. After 2022, we increased the backup lines to be well prepared in the case of higher volatility in the market regarding in particular the marginal cost. So at the moment, we are really in a very good situation.

Okay. About the hydro concession, the situation is this one. Starting from the procedures concerning our super little concession of Resio and Codera Ratti launched by Regional Lombardia at the end of '23, so 2.5 years ago are still pending. Temporary adjudication of the renewed concession is expected at the end of the first half '26, but I imagine that it is difficult for the region to arrive to assign this concession because we put some question in the court about the procedures. And frankly speaking, I think that we are in the right position.

From the other side, you know that in this moment, talking about the parliament, 360 all thinks that is not correct to do tenders without reciprocity in Europe. And talking also in [indiscernible] people that can be interlocutor for us in this topic. So talking about the said Quarta Via, also said fourth way to assign. The idea is that we have to wait to close the PNRR that means August '26. And after it possible to open a quick deal with Europe to be able to extract from the competition Law of the hydro concession and to move in a way that is more or less a project finance in which surely an equilibrium between concession fee CapEx and current remuneration of our asset will be the final solution.

Included probably you read about this 15% of hydro release that is a way, let's say, to have on board also all the lobby of Confindustria that in this moment is strong with our government. And consider that in the project finance the reduction of revenue is more produce an effect for the concession fee, not for us because for us, the idea is to have a remuneration of all the CapEx fixed by ARERA. So the total amount of revenue that drives in our company don't change if there is hydro release or not. But surely to have all the lobby that works together, so our energy company, [indiscernible], so Confindustria and the regions will bring to the result.

Talking about the supply business, what I can say is that from one side, is super interesting the B2B business because the B2B in this moment have a churn lower than B2C that is strange. In the past it was every time the opposite, and that way is super strong in this business. That is also super interesting because B2B means contract with companies with industry that can produce space to build PPA that is the way to hedge our renewable production. From the other side, it is also interesting our growth of 3% in the mass market this year, so '25 on '24. In the free market -- electrical free market, so in this moment, we have a reduction in gas.

Reduction in gas, let's say, is natural because if we look the PDR so the number of contract in our distribution asset in Milano year by year in this moment, we have a reduction of 2%. So a reduction of the PDR normal reduction in consumption, number of customers and so on. So there is space to grow in the electric free market in our opinion. In our business plan, we have a reduction of marginality of 3% every year. But also this year, we haven't seen this reduction. So it's strange situation because probably 5 years in which every year we imagine in our industrial plan, there is a reduction per year of 3%. But till now, this reduction of marginality don't arrive.

So the next question comes from the line of Sarah Lester of MS. I think Sarah got disconnected. So we're going to move on to our next question from Emanuele Oggioni of Kepler Cheuvreux.

My first question is on the cash conversion. It was quite good 65%. And basically, you fully financed the CapEx and the dividend. So my question is on '26 outlook on the same, if this could be improved? And what could be the guidance for net debt and EBITDA, obviously still considering as you retain -- you confirmed the guidance for EBITDA and net profit before the energy crisis and before the drafted law, the Italian energy drafted law in this case would be a consistent guidance before this temporary or not one-off intervention. This is the first question.

The second is on gas procurement. You mentioned before your contract with BP, but this contract LNG could -- would cover only around 20% of the group's needs. So if you can remind the other sources by geography, basically the breakdown of the sources by geography. The third question is on the price cap. If I remember well, you applied litigation like other companies in the sector against the [indiscernible] of the older price cap put in place 2, 3 years ago basically. So this -- considering that this litigation is still ongoing, what is your opinion? Probably the government will not adopt another similar measure considering there is still litigation ongoing or at least would be the price cap aligned to the European level, which was more than twice -- 3x basically compared with the Italian level.

And finally, you mentioned the hedging, 70% to 73% of the volumes. I missed if you have said or not the price EUR per megawatt hour for '26. And indeed, last final question on the market supply -- on the market supply, still focusing on the potential new gas and energy crisis in the next few months. To what extent you are now more protected compared -- so could you protect more your profitability in the market supply business unit compared with previous crisis. Probably you have already changed the contract, the shipping costs in order to minimize the shipping costs, et cetera. So if you could provide more color on that.

Okay. I will start, Emanuele, with the first and the fourth, your questions. Cash conversion, we presented the business plan, as you remember, with a cash conversion rate in area of 50%. The year '25 was quite positive. We managed very well, as I said, net working capital, also taking into consideration the opportunities we had to lower the trade receivable coming from safeguard market and the reimbursement of the safeguard market of the client, so-called not disconnectible. So after the report we submitted, we got some EUR 60 million from the authority. Forecast for '26, we are used to manage in the same way with the same productivity, our net working capital, and we maintain the target to achieve a cash conversion rate in line with 50%.

As I said, we have different opportunities to manage the net working capital also in trade receivable -- in trade receivable, but also in the payments and the contract, in particular, we have for trading purposes. In '22, we move some of those to OTC market to take the opportunity to manage also the terms of payments and so on. So I don't have any, let's say, clue to say now that it could be deteriorated by the current situation. On the other side, we are really hands-on to fulfill the target and to achieve it. In terms of leverage, again, in the plan was 2.7, not to exceed 2.8 and this remains our target. So if we are able to make it better, of course, we can work for it, but 2.7 is pretty in line with the credit metrics target we have also discussed with the rating agencies.

It's interesting your question about the supply because lesson learned in '22 was that you can't maintain fixed price with open quantity. The problem that we had in '22 was exactly that with people, companies with fixed price and without limit on the demand, increased the demand a lot and for us was super critical. You remember that we lost a lot of money in that situation. Today, frankly speaking, in this situation for us, there are only opportunities simply because every time in which price increase, for example, there is a strong reduction of the churn. And the churn in this moment is bigger problem that our company are facing.

So we imagine to be able to grow in the supply market in this moment without absolutely any negative effect exactly because we changed all the contract since '22 till now avoiding any risk of quantity that we had in '22. And talking about price cap, frankly speaking, I can see when -- if you remember in '22 when there was a discussion and some output in Europe about price cap, the price cap was fixed so high that was impossible to imagine to arrive. So in this moment, we are very far from what happened in '22. And so the price cap in this moment is not under discussion. And about the possibility to gas procurement in this moment, we signed, as Luca said, an agreement to buy 1 billion cubic meter of GNL from U.S. starting from the last quarter '27. It was a good idea considering that our total needs of gas is 5 billion. That means that 20% for us arrives directly from this new contract.

And the rest of 4 billion in this moment, it's difficult to see a situation in which in Italy there is a risk of disruption of to remain without gas. So I think that we are in a situation in which we are in a better position against others. It's enough to see the situation of the storage in this moment in Germany, in the north of Europe, there are 18% of storage in Italy, but also in other southern countries, we are more or less 50%. That is also linked to the fact that we need less gas to climatize the buildings during winter, of course.

Yes. Sorry, I missed to answer your fourth question about the hedging. I repeat it for 2026, we are hedged by 72%, 73% with an average price of EUR 110 which is quite remarkable. And for 2027, we already complete almost 50% with an average near to EUR 100. And this is quite satisfactory for us, taking into consideration the situation in which we were at the beginning of the year and considering the current situation. So we are pretty in a good shape to face '27 also in terms of budget when we approach the time to do it.

Consider that in this moment, the calendar '27 is higher than EUR 100. This morning was EUR 102, EUR 103. So if the situation remain this one, we are able in the next weeks to arrive to cover our normal 70% to a price fully aligned with our plan. If we see a reduction, consider the side effect on the thermal production. So we face '27 with 50% covered at EUR 100 and the other 50% open. But if we see a PUN reduction, that means that there is more space for thermal production against import. So in every case, our natural hedging is strong and able to face the situation.

And the next question comes from the line of Sarah Lester of MS.

Can you hear me this time?

Yes, we can.

Perfect. Sorry, I do apologize. Not sure what happened. I've just got 2 very quick questions, please. The first one is on the electricity distribution concession extension. Just given there is this really quite strong political spotlight on customer bills at the moment. I'm wondering if you see that there's potentially a risk that either the time line gets pushed to the right or delayed or that the fee may not actually end up going on the RAB and remunerated that way? And then just a second clarification, please, on the data center platform and the earlier question. Did I hear correctly that you would also consider partnerships where you would not actually necessarily be building the data center shell yourself?

No. For the second, the answer is not. Our strategy is exactly what we explained during the presentation of our industrial plan. In particular, consider that I talked before about the first project under design and are both direct investment that we want to do. Consider that for the interesting partnership also with large players more than us to find the customer to locate the data center. And this is interesting for us because there are companies that already has lot of customer in different data center.

Our goal is to be able to build data center in good position, for example, in Milano, to be clear with a low cost of energy for connection behind the meter and low [indiscernible] for connection with [indiscernible] heating and good water management. So more attractive for the same customer that some players already have. So it can be a commercial partnership, let's say, but we want to consolidate in our EBITDA all the CapEx that we put on the table. And for the concession, sorry, you are talking about the grid concession? Okay. The grid concession, the only problem is that it takes some months more than normal the exchange of our authority ARERA because you remember probably that it takes 4 months of prorogation on the new Board of ARERA.

The new Board of ARERA was appointed a couple of months ago. And immediately with some problems linked to the [indiscernible] for the energy and now for the war and so on, the concentration to find -- to support the government in the grid concession has to arrive. But from our point of view, frankly speaking, is not a problem because we have a concession and consider that the new concession will be 20 years long. And so if the starting point is a delay, is not, frankly speaking, a problem. What is interesting talking about power grid is that if you look Duereti, so the piece of the grid that we bought from Enel last year performance in terms of EBITDA 25% and total CapEx amount is higher than our business plan.

So we are super happy because we was able immediately to face a network that we didn't know in a very efficient way. And so in looking this opportunity once again, we did a super good deal increasing our CapEx, of course, linked to the [indiscernible] '24 that says that we will have the concession extended. I don't know Lester if it's clear for you.

Okay. So we will take our next question from the line of Alberto de Antonio of BNP Exane.

I have a couple of follow-ups. The first one is regarding the energy decree and the potential revision of the ETS mechanism. Could you help us to quantify what could be the potential impact in terms of power prices in Italy and also how this will translate to your generation EBITDA? I guess that more in 2028 once like the effects from hedging are lower. This will be the first one. And then the second one will be related to the Monfalcone plant. Could you give us an update on the current state and when do you expect to commission the new plant? And that's it for me.

Talking about ETS, I can say simply that you can't -- starting from the fact that I imagine that it is absolutely impossible to have a [indiscernible] without ETS. So I don't think that the government will arrive to have an [indiscernible] from EU, but you can't simply reduce the cost of ETS that in this moment is more or less EUR 30 megawatt hours from the PUN because it's linked to the number of hours in which the PUN price is fixed by the gas production. That is super variable linked to what happened, for example, with hydro production and is linked to the fact that we will be able or not to increase total capacity of renewable aligned with PNIEC, our national plan.

So in this moment, surely is much lower than [indiscernible] it's early to say if it is 50% of this value or more or less. But surely, by impact, I can say that you have seen during the presentation in '23 of February of Enel. Enel says EUR 85 per megawatt hours. That is their estimation. Frankly speaking, we didn't do an estimation because we don't believe that it is possible to have this impact. But a hypothesis can be that one. Talking about Monfalcone, Monfalcone is under construction. Under construction means that the delivery is probably in the first quarter of '27. So more or less 1 year to arrive in commercial operation because the construction will end this year. Then there are pre-operation, operation and so on. And so we expect to have EBITDA starting from '27.

And we'll take our next question from the line of Davide Candela of Intesa Sanpaolo.

I have 3 actually. The first one that is on the broader context. You already shared your view about the ETS. And since that gas is fixing the prices in Italy, for example, most of the times, do you see in future if the ETS mechanism won't be canceled from the formation of the final power prices, a scenario where do you see a potential decoupling also of the gas component, so the renewable fixing price and on the other hand, gas. Just wondering because at the end of the day, the gas is, as you said, 1/3 of the entire demand in Italy, but actually is fixing the price for most of the production? Just a question and if it is viable for you even in the longer term?

Second question on your guidance. You said that your hedging for '26 is quite good, actually a little bit higher than your projection for 2026. And looking at what the dynamics in the first quarter, notably during January for [indiscernible] and actually, the higher production as from Terna on the thermal side, there are some positives that are contributing actually to your figures for 2026. I was wondering, confirming the guidance today is just because you see that there could be some potential competitive factors to these positives or it just too early at this time of the year to revise the guidance?

And finally, last question on the batteries. You spoke a little about this technology. You mentioned some upside in your business plan. I was wondering if -- given the fact that the technology looks in a good momentum, I was wondering if you can provide your view and if you are thinking about investing in this technology in order to let your portfolio generation more flexible and so on.

Okay. Coming back to ETS, we consider that we did a simulation to understand what can happen in the bill of the citizen due to the Energy Decree because the idea is to be able to reduce, let's say, around EUR 20 in all the energy on the market. The energy on the market is today 275 terawatt hours. Consider that the total consumption is 311, but there is auto consumption, so you have to consider on the market 275. So for 20 or less EUR 5 billion. So the idea of the government is to reduce EUR 5 billion of raw material -- cost of raw material.

From the other side, the idea is to put on the bill -- the cost of ETS, considering ETS EUR 30 for megawatt hour in the total terawatt hour of 115, which is the problem. In this moment, the demand is 148 from renewable, including the hydro, 52 from import and 115 from thermal production. If there is a reduction of PUN of more or less 20%, total production in renewable remain the same and there is no hours in which the price is fixed with renewable, but we see a reduction of import from 52 to 10, more or less with an increase of thermal production from 115 to 155, 116 and in this case if you multiply 160 for 30, you can see that there are once again EUR 5 billion of cost of ETS on the bill of our customers.

So the sum between reduction of raw material increase of tax is exactly 0. This is the reason why if you read the last version of the decree, it is written that is possible to reduce the ETS only if there is proof not to have impact on the import. That means that if it's possible, more difficult to calculate the real impact of ETS because you have to imagine an authority or others that every hour of a day to calculate if the reduction of ETS on the PUN produce a reduction of import or not. So a nightmare, a complete nightmare. So we imagine that it is super difficult to move this part.

So to close, I think that in this moment, it's really critical to imagine an ETS effect. I imagine that in EU will find a solution not to accept our Article 6 of our Energy Decree. And this is the answer. Talking about batteries only to close, the business battery is interesting. The reduction of price is huge. During the last tender max, the price arrived to a super low level, but this is due to the fact that the supply like [indiscernible] or rather from China reduced the price, put on the table 20 years of guarantee. That means business plan of 20 years. The problem is that the payback period of this business is very long. And so our evaluation is if it's interesting or not to invest a lot in a business that is, let's say, like an infrastructure, but the infrastructure is a battery. So I confirm that our commitment in battery in this moment is lower than, for example, in power grid.

Okay. Regarding the guidance, Davide, I think that -- it is too early to say something you can appreciate. Yes, it is true what you said. We have some opportunities, but also we have some other aspects that we need to take care about. First of all, the price of the energy is lower than last year. We already incorporated it into the business plan. But if you want to make a change compared to last year, you have a difference. But sticking on the guidance, we are pretty comfortable to stay on that. Let's see how the scenario is going to move. If we have the chance to getting some more opportunity, of course, we are here and also to lower the risk for the aspect that are not in the right direction. So for the time being, I think that we feel comfortable with the current guidance.

Thank you very much. So we don't have any further questions. I will hand you back to Mr. Porro for any closing remarks.

Thank you. Thank you, everyone, for taking the time to participate for the Q&A. And if you need any additional follow-up or deep dive, please contact the IR department. Thank you, everyone.

Good morning. Thank you, everyone, for attending our Capital Market Day. We have a couple of busy hours in front of us. First, our CFO, Luca Moroni, will comment the 9 months results. Then our CEO, Renato Mazzoncini, will drive you through the update of our capital and the strategic plan at 2035. So without spending any more time, we are ready to start, and I leave the floor to Luca.

Thank you very much, Marco. I will go through the presentation of our 9 months results. So starting from the highlights as usual. Perfect. So we show a good resilience in economic and financial results despite the exceptional hydroelectric production of the previous year. The contribution of margin deriving from the growing performance of electricity network, the higher premium on the capacity market and the increase in the urban waste treatment prices absorbed the negative effect arising from lower hydrolytic production returning to historical average levels and the exit from safeguard market.

Sound economic and financial performance confirmed. Reported EBITDA recorded a limited decrease, reaching EUR 1,729 million. Net of the impact deriving from Hydroelectric production, which is one of the few exceptional effects recorded in 2024, EBITDA grew by 3%. Ordinary net income, excluding special items recorded on both '24 and '25 showed a decrease of 16% compared 9 months '24, standing at EUR 559 million.

Adjusting '24 results for the effect of last year Hydroelectric production, [indiscernible] net income decreased by 3%. We confirm the solidity of our financial ratios. Our net financial position land at EUR 5.3 billion with a net financial position to EBITDA ratio equal to 2.4x, with a decrease compared last year's 2.5x. Resilient EBITDA despite normalization in Hydro volumes. Despite a normalization in Hydro volumes, EBITDA remained resilient. Generation & Trading ordinary EBITDA amounted to EUR 623 million with a decrease of 20%, EUR 160 million less compared to the first 9 months '24. The change is mainly attributable to the normalization of our Hydro production, minus 26%, minus 1 terawatt hour, resulting in a margin reduction of around EUR 130 million. The lower opportunity from energy commodity hedging, the higher contribution of thermoelectric production and the increase in the premium awarded, on the capacity market.

Supply ordinary EBITDA amounted at EUR 328 million with a decrease of 9%, minus EUR 34 million compared to the 9 months '24. We confirm the level of the marginality recorded in the same period of last year, net of the effect from the safeguard market, which is -- which account EUR 33 million. So the outcome is the positive effect of the commercial development of free market electricity segment, 109,000 customers more, compared last year, plus 7%, lower retention costs and the increase in operating costs arising from sales channel mix.

Circular economy ordinary EBITDA amounted to EUR 423 million with a growth of EUR 20 million, plus 5%, compared to first 9 months '24. Here also the increase is mainly attributable to the positive contribution of waste-to-energy treatment prices, being partially offset by lower margin from the new contract with the [indiscernible] region for the management of [indiscernible] plant. The positive contribution of district heating, thanks to higher volumes sold, plus 96 gigawatt per hour, plus 5% and higher volumes from sales of [ white certificates ].

The decrease in the Collection segment, mainly following the new contract signed with Milan after the tender slightly affected the marginality. Regulated network ordinary EBITDA amounted to EUR 359 million with a decrease of EUR 29 million year-on-year. Decrease in the margin is mainly attributable to the performance of the new perimeter in the electricity network at plus EUR 68 million as well as the increase in a low revenues of historical perimeter, plus EUR 23 million and the lower marginality deriving from the disposal of gas distribution assets.

Let's see our income statement, starting from EBITDA of EUR 1,729 million. We recorded EUR 704 million depreciation, amortization and write-off, up to compared last year, EUR 45 million, EUR 23 million for the delta perimeter of the new electricity company, Duereti, and the new CapEx plan carried out during the period. Net provision of EUR 69 million. Net financial expenses of EUR 128 million due to the new debt volume effect. I just recall the new issuance we had in January of the EU Green Bond in the new format and the bridge loan for the acquisition of the new asset from Enel Distribuzione.

Taxes of EUR 244 million with a reduction of EUR 42 million compared to the first 9 months '24 with a tax rate of 29%, in line with the previous year. Minor interest of EUR 28 million for a net income of EUR 559 million, including EUR 22 million of special item, mainly due to the plus value coming from the asset deal of the gas network. The group net income is EUR 581 million.

We continue to invest to growth and to support ecological transition. CapEx in the first 9 months amounted to EUR 1,037 million, up 15% compared to 9 months of the previous year, supporting the ecological transition. Development CapEx amounted to EUR 618 million, mainly focused on upgrading the efficiency of the grid, the increasing of flexibility of generation plants and the development of photovoltaic and wind power plants. 70% of the CapEx are eligible for taxonomy and 51% are aligned.

Net free cash flow during the period, the change in our net financial position was positive and amounted to EUR 518 million. Operating cash flow fully financed CapEx plan and dividend payments, which is a very good news.

As of September 30, the company reported a net financial position of EUR 5,317 million, consistent with the first half, reflecting an improvement of net financial position to EBITDA ratio to 2.4x compared to 2.5x as of the end of December '24.

So in light of the solid results, we have just commented, our guidance for EBITDA is confirmed in the upper end of the range. EUR 2.17 billion, EUR 2.20 billion, and the group net profit net of nonrecurring items between the range of EUR 680 million, EUR 700 million. Thank you very much.

Okay. Thank you, Luca, and good morning, everyone. Thank you for being here or connected at our Capital Market Day. Since Luca's presentation of the last quarter, you have seen the name of the plan presented last year, [indiscernible], which told the story of a company that is committed to building the future every day by investing in infrastructure, renewable energy and smart grids. We need more power today, more efficiency and more sustainability. And data is the heart of this revolution and data centers are spreading across our territory and are growing very quickly.

And today, we are ready to seize our momentum, to drive the digital and ecological transition with competencies and responsibility. Just a moment guys, because I started without move the slide. And -- No company is future-proof, but some company are future-ready. And A2A is one such company, ready to face future and ready to power. Today, we will illustrate how A2A is writing one of the most compelling success stories in Europe energy landscape, a story built on financial discipline, industrial excellences and strategical foresight with a long-term vision that focuses on the twofold opportunities of energy transition and circular economy, further accelerated by artificial intelligence development.

I'll begin by giving you a brief overview. So we start with a brief overview of the energy landscape that I think can be very interesting for you and we will then run through the key highlights of our strategy. And then I'll hand over to Luca, who will illustrate you, our key financials and our long-term financial stability underpins our growth and ensure the platform for our acceleration into the future. So start with the landscape.

Electrification is driven by a rapid growth of data center, which we will talk about at length during the presentation, but not only because also e-mobility and heat pumps are constantly decreasing in cost and entering the market, creating totally additional electrical demand. In this graph, you can see the growth of electrical demand in the next year. And in this graph clearly shows that the demand for electricity is growing, while at the same time, the demand for fossil energy is decreasing. Overall, the total final consumption is decreasing because the efficiency of electrical equipment as well -- is much higher than fossil fuel equivalents and so there is a total reduction. And therefore, electrification is also the only route to decarbonization.

Decarbonization where also more niche but fundamental technologies in complex urban context such as waste-to-energy or district heating also helps. And so let's have a closer look of data center trend in Italy. In this map, you can see the total capacity of 55 gigawatt of connection already requested to Terna. The geographical distribution not only rewards Lombardy, which is not a surprise, but also two regions in the South, in particular, [indiscernible] in Sicily, which are located on some of the most important underwater data networks in the world and will, therefore, be able to seize opportunities. So let's think of our plants in the North, but also of sites such as [indiscernible] in Sicily or [indiscernible] Pula.

Our estimated, which we presented, you remember in September in [indiscernible] is one of the most conservative on the market in this moment. The base scenario, 2.3 gigawatt, full potential 4.6 gigawatt, and the potential of heat recovery for district heating is interesting because it can double the thermal energy available. That is a particularly interesting opportunity in Milano, which sees 50% of Italian data centers on its territory and the district heating network that currently covers only less 20% of buildings. So from one side, great opportunity to grow district heating from the other it's recovery from data center.

Investment needs in electricity distribution grid in Italy are over EUR 10 billion per year only over the horizon of our industrial plan '35, mainly driven by new demand, but also by the need to connect new renewable generation and renewable grid. And it's also interesting to see that the [indiscernible] that is our National Integrated Plan Energy and Climate updated by the Milan government in '24 has pushed the renewable energy target to a level never seen before, 63% by 2030, which, in my opinion, is the obvious reaction after rewards of a country that is the third in Europe for renewable potential after Norway and France. But Italy as neither Norway's fossil fuel nor France's nuclear power.

And with renewables, also storage is growing. It's interesting the result of the first [indiscernible] tender -- and the result is due to very low battery prices, the result of competition between Chinese players and consequently, a very low price of time shift. We have calculated about EUR 30, EUR 35 per megawatt hours of the cost of time shift, which make renewable even more competitive during the day.

Finally, I would like to point out that the capacity market programs launched by Terna in recent years to avoid the risk of blackouts such as [indiscernible] in Spain are leading to the construction of a powerful fleet of new high-efficiency gas-fired GGT plants. The efficiency is 62%, 63% compared with 40%, 50% of efficiency for the older plants, less CO2, lower energy price, which replaces Italian generation fleet with a power of 5 gigawatt, but more or less is equal to all the Spanish nuclear power. And what is key is that the load factor of GGTs now is around 20% and also in the horizon of the plan without data center. That means that is therefore more than able to cope with the increase in demand from data center.

It is enough to look at the following graph to understand how our strategic decision in recent years have permitted A2A to pave the way toward electrification in Italy. We invested EUR 10 billion over the last 10 years, EUR 10 billion, 60% of which focused on electrification. And our investment in electrification include the swap between part of network with Power Grid in province of Milan. The result is the swap in the value of RAB in our asset gas and power grid, focused investment in renewable with a good mix of wind and solar to build increasing competitive PPAs for our B2B customer and an electricity customer base that has grown by 61% between 2020 and today, 61% the customer base electrical.

A2A has currently 3 unique features. The first, the presence in both energy transition and circular economy space. The second being established in Lombardy, which is the center of the development area and the third being ready, thanks to the previous investment choices. The first of them, which really distinguishes A2A in the Italian scenario is that is the sole player not only vertically integrated in energy transition networks generation and customer base, but also vertically integrated in circular economy with strong crossover elements such as waste to energy and district heating. And it is an issue that we have been supporting for some time. But today, a phenomenon has arrived that is focusing everyone's attention that is data center.

A key tool of competition and enabler of the digital revolution, which, however, requires a systemic approach to sustainability issues. So connection to electricity grid, supply of baseload energy, but with low CO2 impact, efficient cooling system and heat recovery and efficient water management. And Lombardy once again is the heart of action. We are ready. We are ready. A2A is clearly a single development partner capable of addressing all this issue in an integrated and efficient way. This is our momentum driven by growth, new businesses and new geographies, increasing our productivity. And these are our numbers, which Luca will tell you about in more detail later.

We are following the path placed in January '21, you remember, when we presented the first 10 years plan. At that time, the target seemed very challenging. But today, we are surpassing most of them despite the delays generated by COVID and worse. And today is the time of our momentum. EUR 23 billion of investment still growing in comparison with the Life Plan, of which EUR 16 billion in the energy transition. And what is important, however, is the graph -- this graph in which you can see the status of our investment.

Of the EUR 23 billion of CapEx that will bring its way to EUR 3.6 billion of EBITDA, 35% are already completed or under construction, 35% already approved and ready to start. This is what is needed in Europe as Mr. [indiscernible] also reminds us in his famous report to build infrastructure that make Italy and Europe competitive and sustainable over time. Today, the 12th of November, we have over 250 large scale construction site in all our sector in this moment. And I ask if it's possible to send a video. A very short video.

[Video Presentation]

And so let's start with the highlights of the strategy. Electricity grid are still growing reaching EUR 4.9 billion, which will bring electricity RAB to EUR 4 billion by 2035.

And the acceleration, as we will see, derives mainly from the efficient integration of the former Enel network. I would like to underline two aspects. The first is the EBITDA per [indiscernible] strong growth, thanks to both growing investment, of course, and the economy of scale generating by the doubling of the number of ports managed by A2A. Today, we arrive to 2 million of ports managed. The second aspect is the deployment of electricity network projected to triple our current rate in kilometers of electricity grid lead, reinforcing our commitment to electrification. And you can imagine.

I am really happy that the Duereti deal was finally understood properly. The good news for all is that compared to the Duereti acquisition plan in the first year because you remember, we started to manage January '25, this network, we have developed 23% more CapEx than expected. And you know that the value of this network is the quantity of CapEx that you are able to invest on, which was not all obvious in a network that we didn't know and with an absolute value, more than double the investment made at the same pre-acquisition network in '24.

And the EBITDA produced is 7% more than the estimated we had in the plan, in the acquisition plan. So we are very satisfied, both from a strategic point of view with the performance that we are achieving on the new network. The strategic value is clearly represented by the 280 megawatts of connection requested for data centers received only from January to date alone. Main connection for data centers up to 10 megawatt. So if the data center arise to 10 megawatt, is the main connection. Backup connection for larger ones because even the larger data center start with a 10-megawatt medium voltage connection because Duereti is faster than Terna in delivery and guarantees a faster time to market for developers. So the topic for them is this one.

Today, everybody is talking about data centers, but let's not neglect mobility as car costs have fallen in the last years. This is interesting. 24% less city car, 12% less small car. You know in the same period, the cost of endothermic vehicle grew. So in line with the normal market dynamics, it will react according, reaching 20% of share of electrical vehicles by 2035. So we estimated that at national level, electricity consumption for electric transportation will reach 40 terawatt hour. But there is no doubt that Lombardy and Milano will be front runners also in E-mobility. So we continue to invest selectively in charging infrastructure, specializing in the two segments that we believe will be successful that are only low charging city [indiscernible], so low CapEx for urban widespread mobility or high-power charging apps in traffic extra urban areas.

Regarding our investment in renewable energy, we confirm our commitment of reaching 3.7 gigawatt with a balanced development between wind and solar. But it's interesting that we estimate of the increase in production per megawatt installed, due to the effect of repowering and the increased productivity of new plants. We grew by 54% in wind and 28% in solar. And our pipeline has also grown now totaling over 2 gigawatt of wind and solar capacity. Of particular importance is the issue of the derisking of the generation portfolio, that is an issue for you, super important. The first level of derisking remains the diversification of generation sources, both in terms of technology and geography. Compared to the commonly used description, we have added an important distinction, so a new distinction between traditional GGTs and high-efficiency GGTs -- is the blue color.

The latter, obviously, will have more market space. You remember 62%, 63% of efficiency and constitute one of the strategic elements of derisking. [indiscernible] incentivize renewable, a capacity market, but also by growing market for PPAs that is growing that we estimated will cover 65% of our renewable production and 70% of our energy mix will be renewable. Lastly, and importantly, the natural hedging between generation and customer base remain crucial.

As can be seen from this graph, A2A remains long on sales with generation well covered by final customers' consumption along the whole plan. Regarding customer, so we talk a little bit about customer. The retail sector has been increased competition. These are the data according to ARERA data, the churn rates have risen by 1.8x in recent years. What is happening in '25 that is the curve is changing. But today, this is the data from ARERA.

The electricity customer base will continue to grow compared to the gas. So you have seen our mix between customer gas and customer electricity customer is changing completely. And the acquisition strategy aims to carefully select geographies and sales channels focusing on the acquisition on the high-value customers. The target of 5 million customers remain confirmed as per previous plan and also this year despite the loss of customers under safeguard. Margins remain very healthy.

In the B2B segment is interesting, the dynamics is the opposite. So the churn is declining with a rate that is now even lower than retail, probably is the first time in the history of our country. And of course, it's interesting because the B2B is a segment in which A2A is very active with over 10% of market share, precisely because of the strategy of vertical integration with generation that allow us to propose corporate PPAs. Corporate PPAs remains key and B2B customers are key, to close agreement in PPAs.

Moving in the circular economy, let's start with the waste cycle. Italy is not a bad place on the European scene with respect to the 2035 goals. You remember 10%, no more than 10% in landfill, but there is still a lot to do. Frankly speaking, in the Lombardy region where the incumbent operator is in urban waste is today, the use of landfill is close to zero. The plan provides for growth in both the volume of waste treated and thermal and electrical energy recovered. It is worth mentioning that in '24, the third waste-to-energy line in [indiscernible] started up with a treatment capacity of more or less 250,000 tons. And another plant with another 250,000 tons is already under construction in Crotone, you have seen in the video. And today, A2A is the sole company in Italy that is building waste-to-energy plant in a situation in which the gap that we have to fill with the European target remain 4 million [indiscernible] tons.

One of the new elements of this plan is the integration of waste management, water cycle, district heating and data center businesses into the new circular economy business unit. So we have built a new business unit named the Circular Economy with altogether this business. The Circular Economy business unit with EUR 6.5 billion of CapEx plan will reach EUR 1.3 billion of EBITDA. One of the lever will be a higher integration in the B2B supply chain. The Circular Economy business unit will be strongly impacted by the data center development. For example, the issue of water management becomes crucial with data center. So let's take a closer look on how A2A plans to approach the data center business.

Let's start with the most easily predictable activity. A2A as an energy partner is normal of a data center in operation or under construction. We have estimated that growth in electricity demand from data center could reach 42 terawatt hours at the full potential of the scenario presented in [indiscernible]. Interesting that our scenario is significantly more conservative than the one published a few days ago by Terna [indiscernible]. The Terna scenario estimated electricity demand of almost 600 terawatt hours, 58 by 2050 with a significant contribution from data center. And also, Mr. [indiscernible] says that we will reach 600 terawatt hours of energy consumption. Again, based on our most conservative scenario, we have estimated that the demand for electricity connection to the medium voltage grid in province of Milano will reach 1,400 megawatts, and likewise, according to our assumption, we have estimated the energy that could be recovered from data centers for district heating with a full potential of 3 thermal terawatt hours capable of hitting about 300,000 apartments in Milano.

The impact in terms of CapEx and EBITDA of A2A Energy Partner activity is included within the individual businesses. So in generation, market networks, district heating with potential upside to be captured. But if there is a party, we don't want to go just to [indiscernible] -- and therefore, since we have a very attractive value proposition, we have allocated EUR 1.6 billion of CapEx to develop a part of a great national data center plan. So let's take a closer look to our value proposition.

One of the most important needs for data centers is evident related to low-cost high resilience baseload energy supply. The best configuration that guarantees these two elements at the same time is the direct connection of the generation plants to the data center, which requires simply that the data center to be located in close proximity to the generation plants. And it is interesting to see on the map how many generation plants A2A has in Lombardy and how concentrated they are around Milano. The baseload production, baseload production guaranteed by both our waste-to-energy plant and thermoelectrical plants combined with a growing mix of renewable is attracting a lot of interest from operators in terms of final energy supply cost and time to market. It's difficult in this moment to say what is better, cost of energy or time to market because it's the moment really very particular.

The EBITDA we expected in 2035 supplementary through the activities of energy partners is EUR 0.4 billion by 2035. And the first projects have already been carefully identified and the first analysis are underway. I can't say the name today, but you can easily understand from the graph. It is very interesting to see in the graph what impact a partner like can have on the economics of the data center development. As you can see, 65% of the OpEx is related to energy consumption. The other is personnel and maintenance. And this 65% once again is 65% for server room, 25% for cooling system and 10% for other components.

Thanks to a competitive advantage, we can work on the 65% of energy-related consumption and reduce the overall cost down to less than 50%. And believe me, this is super conservative. By direct connection between data center and generation plants in Italy, is named SSPC. So it's a direct connection, a cable that goes from generation to final user to reduce the network charges because in this case, you have not to pay TSO and DSO and the relative tax recovery.

The second is heat recovery for district heating and efficient cooling supply. I keep energy and they reduce the cost for data center. Furthermore, PPAs and energy management could also reduce volatility risk of the business. Consider that data center is the perfect customer for PPAs because it's super predictive, the consumption of baseload of energy for all the life of the data center.

I would like to close this section by talking about our geographical footprint, our backyard. I think it is important to recall that when we presented the first 10-year plan in January '21, some of you surely will remember, we had planned to develop A2A in Europe as well with some of the company's most core businesses, in particular, waste-to-energy and renewable energy. In '22, following the Russia-Ukraine award, we updated the business plan by bringing all CapEx back to Italy to contribute more quickly to our country's energy autonomy. But today, we believe that it is necessary to return to a more European footprint. The geographical diversification that lets us identify opportunities with higher returns and faster execution.

So the tender, let's say, between [indiscernible] countries is to be more attractive for investment. Therefore, a part of the CapEx envisaged in the plan and not yet definitely allocated, there is a part of the CapEx that is not definitely located. That means not additional to be clear, can be used as an opportunity of international expansion, which will take place gradually and typically with the first inorganic moves. The focus remain on the core businesses, particularly in the waste value chain starting from waste to energy with potential integration with collection. There is a natural hedging between connection and treatment that we have to maintain and district heating and in the area of power value chain by integrating renewable generation, energy management and customer base.

Our development strategy will lay on country commitment, identifying potential targets for an initial external growth as an anchor platform model for further development. The work is already underway, and we have identified priorities in different countries according to the targets. You can see the picture in the graph. For example, the Iberian Peninsula and U.K. are most interesting for waste-to-energy, while Germany and Poland are of interest in the power supply chain. Okay. I close this part. And now I leave the floor to Luca, so I can drink some water. Please, Luca.

Thank you. Thank you, Renato. I will now walk you through the planned financials. As an infrastructure company, we are presenting EUR 23 billion investments, a further increase on what we presented last year. This will generate profitable growth over the plan horizon and will enable the company to capture new opportunities arising from the evolving needs in the utility sector.

CapEx deployment is going to fuel structural industrial EBITDA, substituting the temporary effect from better hydro condition and good hedging opportunity we seized during the last period. The EUR 23 billion of investment are driven by our two well-known pillars, energy transition and circular economy. But what it is new for you is the EUR 1.6 billion direct investment in data center, the data center platform, which I will elaborate later on. The expectation regarding electrification and the potential for fast and strong demand dynamics driven also by data center lead us to be more selective in our project pipeline. We have decided to increase investment in electricity grid by almost EUR 800 million and to refocus our treatment investment primarily on energy recovery. This plan will result in a robust EBITDA CAGR of plus 5% from 2025 to 2035 and plus 6% of CAGR if we switch our base to 2028 when the development of data center will start playing its role.

The data center platform is our initial structural approach to embed this opportunity in our targets, driving a growing contribution up to EUR 300 million, EUR 400 million EBITDA in 2035. Finally, the EBITDA breakdown between merchant and low volatility activities highlights the adequate balance of risk and stability, which underscore our confidence in future growth, sustainability and long-term value creation. The value creation effort is also highlighted in the following slide. Our disciplined capital allocation across the three areas of expertise, generation and supply, circular economy and smart infrastructure is confirmed. CapEx are balanced among each segment and reflect the group strong growth orientation. Specifically, development CapEx is nearly 80% in generation and supply and circular economy and about 50% in the almost fully regulated smart infrastructure business.

Overall, our investment target highly attractive return of more than 200 basis points above weighted average cost of capital. A2A focus on value creation is not new to you. So let's address what I'm sure is one of your curiosities, quantifying the opportunity arising from data center. As we have seen in other countries and considering our CEO's earlier remarks, this segment's potential could be incredibly strong. However, it is also true that it is something new in Italy. So we want to take on this new business, providing a quick response along with careful analysis and selective investment decisions. We aim to immediately position ourselves in the segment as a leading energy player. The direct investment in data center, our data center platform will serve as a perfect showcase for our energy management expertise.

At the same time, the investment presents a risk return profile aligned with our financial discipline. Data center opportunity is already addressed in this plan with an early but clear target, double-digit return on invested capital with a potential scale-up of investment and become a growth engine within the company's portfolio. Ambitious and timely decision cannot be sustained without solid foundation. We foresee cash generation of EUR 14 billion after maintenance CapEx with a cash conversion rate above 50%, allowing us to maintain a solid financial leverage. The expected increase in our net debt by EUR 3 billion will be fully sustainable from a financial point of view with a 2.7x net financial position to EBITDA ratio in 2030 and 2.4 in 2035. Thanks to a well-managed cost of debt, we estimate a maximum of 3.3% in 2035. The impact of financial expenses in our plan is limited.

We have planned for EUR 10 billion funding needs over the planned time period, of which EUR 7 billion is refinancing of existing debt. To ensure a proper risk management, we have adopted a proactive approach to the capital structure, strategically setting the proper mix of floating and fixed rates. We are leveraging sustainability and innovation, targeting 100% ESG debt by 2035 and remaining open to new solutions, as demonstrated by our recent successful deal, the first ever European Green Bond in the market and the first Blue Bond in the Italian market. Our financial policy ensure liquidity and credit strength. We have built a well-balanced debt maturity profile with an average duration above 5 years, thus managing refinancing risk.

Our liquidity position is strong with cash and undrawn committed lines comfortably covering our needs. Lastly, we confirm our commitment to maintaining our current rating with FFO to net debt ratio above 24% throughout the period of plan. Infrastructure growth investments and effective capital allocation will lead to a solid earnings profile, strong revenue and shareholder value creation. Earnings per share are expected to grow at a compound annual rate of plus 6% from 2025 to 2035 with a robust 8% of growth in the period of '28 to '35. The growth doesn't include the full potential coming from data center. namely increasing electricity supply, medium voltage connection, district heating network expansion.

Our commitment at least 4% year-over-year dividend growth is confirmed, reinforcing the company focus on rewarding shareholders while maintaining financial discipline. We believe that the fruit of our financial management will continue to make A2A a very attractive proposition for our shareholders with a forecast return on investment of plus 9%, a 12% of return on equity and a payout ratio between 45% and 55%. Our guidance is expected EBITDA between EUR 2.21 billion to EUR 2.25 billion and ordinary net income ranging from EUR 630 million to EUR 660 million. These figures reflect the company confidence in achieving a steady operational performance and short-term profitability while laying the foundation for a stronger future growth through a remarkable CapEx plan. Thank you. I will now leave the floor again to Renato.

Thank you, Luca. And a few minutes for closing remarks, and then we will start with questions.

Also because it has been a long, but I hope it's interesting presentation. The opportunities are many. And as in the presentation of life years plan, let me leave you with this thought. A2A growth today no longer has the bottleneck of industrial machine. On the contrary, it is full of human capital that wants to do -- want to grow and to create long-lasting value. If any, the bottleneck is our solid and rigorous approach to financial policies, which could also open up to partnership to seize further opportunities in the future.

In this slide, you can see another EUR 300 million of potential EBITDA that can be generated by other projects that we already have in the pipeline. Talking about new [ GGTs, ] battery, reinforcement of electricity, the grid district heating growth and so on. We have many things in the toolbox, but not everything. And this is why we have decided to set up the new life venture company to increase our commitment to innovation, venture capital and collaboration with start-ups, universities and research centers. And today, A2A is the largest Italian corporate venture capital in climate tech. And we have just launched the Life To Fund which already raised EUR 150 million out of the EUR 200 million final target. So we are very happy. There are many activities already underway with start-ups and many investments made in the past, [indiscernible], I think that is a super good example. And all are proving to be a great vision and foresight.

A2A has already implemented several use cases with the start-up, including, for example, digital twin for predictive maintenance on electricity network, artificial intelligence powered plastic sorting. Really, believe me, digital twins on the networks, a lot of application, in this moment, we have more than 100 projects with artificial intelligence ongoing in the company. And finally, our commitment to a competitive but sustainable transition, our Net Zero commitment to 2050 and the decarbonization curve that you know to 2030 remains solid and remains solid because our decarbonization path will cope sustainability targets with improvement in our performance along our business lines, only some example in water cycle, district heating supply and so on.

In this last slide, we summarize the main data, which need, I think, no further comment before we open the floor to your questions. Let me recap some of today's key points. To be in the right place at the right time is always a good thing, but it's not enough unless you are also future fit and ready to seize the short- and long-term opportunities. Today, A2A is ready, ready to power and in particular, ready to grasp the opportunities arising from the growth of data centers in Italy and in Europe. And our integrated industrial backbone powered by EUR 23 billion in strategic investment, expanding regulated assets and growing footprint in electrification, renewable and circular economy give us the scale and solidity to thrive through change.

Our clear vision aligned with the Europe energy transition has enabled us to anticipate structural changes and to cover them into opportunities. And our economic stability has provided the platform for acceleration. And this is what makes us the company that is now driving renewed confidence and recognition in the market. Thank you very much, and the floor is open for your questions.

Thank you, Renato. Thank you, Luca. Now we -- first of all, we will open the questions to the floor, then we will also move to the collection lines. So let's start with the floor. First one Javier Suarez from Medibanca.

Thank you, Marco. So two questions that are the first group related to the short term and then to the medium term. Asking for the short-term assumptions that the company has changed in 2026, '27 and '28, can you share with us the underlying assumption for 2026, the changes that you have implemented because I have noticed that the previous net income target was EUR 700 million. If I'm not mistaken, now, the company is targeting EUR 650 million of net income in 2026.

So the question is, what is -- which are the moving pieces for that? And then I have also noticed that the target for 2027 has been -- is the same one for 2028. So in that period, that goes from 2026 to 2028, what the company see through different lenses that makes that the profitability of the company and the net income is going to be lower?

And then on the medium term, it is fair to say that the company has, for the first time, included into its business plan the data center opportunity from 2028 to 2035. And if that is the case, why the EUR 400 million of increase that you are forecasting is not fully translated into your previous target? Because previous target has been increased by EUR 300 million. Data center opportunity is quantified at EUR 400 million, which is the moving piece the EBITDA target.

And a related question is a philosophical on the data center opportunity. How A2A see itself. It's going to be a builder of data center or is to be a company serving data center? And the last question to leave space to other colleagues is how A2A see this business? Because I have noticed that the business hasn't been included into the generation business, has been included into the [indiscernible] circular economy unit. This means that the companies [ see ] are different pricing, different dynamics, a different opportunity for this business that is going to be [ correlated ] from the generation activity. So the thing that I'm trying to capture is that the pricing of this electricity directly sold to data center are going to follow a completely different logic?

Okay. I tried to answer up to the medium term and then I leave Luca for '26, '27. Starting from the exactly from your last question, Javier.

Yes, I think that the difference is [indiscernible] differences between this plan and the previous plan is the fact that we decided to invest directly in the development of data center. So to be energy partner, also energy partner able to bring a lot of opportunities from PPAs, grade and [indiscernible] it's normal for a company like us. We are happy to be fully integrated and so to give a lot of opportunities to our customer.

What is not obvious is to invest directly EUR 1.6 billion to develop to build the data center. Because the business of data center is different compared to the size of data center. So there are the super big data center 200 megawatts or more probably will be built directly by the over the top Amazon, Google and so on. But the typical size that we expected to see in Italy in the next year is between, let's say, [ 5 and 100 ] probably. So in colocation business model.

So the topic of the issue is to have a house for data center that is super efficient. To be able to host the rank of the customer that will arrive. And so our business model decide we should put EUR 1.6 billion on the table exactly to be able to be the owner of the data center. And this is the reason for [indiscernible] EUR 400 million of EBITDA on top on our previous guideline. Because our EUR 400 million completely linked to the CapEx to EUR 1.6 billion of CapEx.

We [indiscernible] to have in 2030 already more than EUR 100 million of EBITDA and the [indiscernible] that grow till [ 400 ] with this CapEx. And so I think that is very interesting to understand that the opportunities is linked to the graph in which we have seen how many generation plants that we have in Lombardy. So the opportunities for data centers to be built near close through our generation plant is not easy, but it's absolutely not impossible because there are really a lot of opportunities. And the direct connection is the [indiscernible] application because the [indiscernible] application is to be able to reduce the charges for distribution and transmission.

And we have a lot of waste to energy plant in Lombardy. Not only the [indiscernible], like [ Bassi ], [ Milano ], but also [indiscernible]. We have a lot of other plants in Bergamo and a lot of thermal plant. The big thermal plant can be able to attract super big data centers because if you have a thermal plant with 700 to 800-megawatt of power, you can source surely also data center with [indiscernible] or more.

A waste-to-energy plant can be the super partner for a data center of medium size 20, 30 megawatts, for example. But big because in this moment, I remember that in Lombardy the biggest data center is the data center of a team in [ Rozzano ], near Milano, 30 megawatt. This is the situation in this moment in Italian. So talking about short term?

Yes. Let me start from EBITDA. Last year, when we presented the plan here, we clearly stated that we came from results that was blown by some exceptional situation like as the hydro volumes and the prices effect. We have calculated those effects into EUR 300 million. So you need to consider 2024 with this normalization.

Having said that, 2025, has a queue of price effects because the normalization of prices is going to be to lead us at a level between 100 and 110, which is the normalization of the scenario we ever considered. And if you make the calculation, we are still [ EUR 80 million, EUR 90 million ] in '26 as a queue of the scenario effect. But we did a quite a good job in recovery and being at the same level in terms of EBITDA as in the previous plan.

Going forward, we start to have the impact of the data center opportunities, again, which we have considered -- as I say it is very usual for A2A in a very prudent approach. You have seen it. The chance could be really huge. We keep the food underground -- in the ground step-by-step considering only few opportunities on which leverage our growth in the midterm.

In terms of EBITDA, we have a couple of things which lowered a little bit the level compared to the previous one, which is the calculation of the allocation of the prices for the acquisition of the network from [ NL ]. As you know, it is an accounting procedure we need to follow for the purchase price allocation. This will account EUR 20 million in terms of depreciation and amortization, starting from the end of this year and '26 onwards. And we have changed a little bit the mix of our CapEx. You have seen we have increased the CapEx plan in electrical distribution with almost EUR 800 million of higher CapEx. And this leaves us from the calculation with higher depreciation compared to last year. So these are the three aspects, energy -- the queue of the energy scenario and the depreciation and amortization.

Talking about bigger construction site, what will [indiscernible] the differences in the next year is Monfalcone. Monfalcone, the first parallel so the first connection with the grid will arrive in October '26. And we estimated to have the operational activities of EBITDA that is EUR 10 million every month since January '27.

The second is in more or less in the middle of '28, the new [ West Energy ] plant in [ Corteolona ]. Of course, there are a lot of other CapEx investment, but these 2 elements altogether are about EUR 200 million. So this is the reason for why from '28, you see the full potential of these 2 plants and EBITDA but come back to grow quickly. I think that what is key to understand, but I'm sure that it's clear for you, is that the scenario effect was crucial in the last year, and we was able to offset most of scenario effect due to the CapEx that we did in the last year.

Okay. Let's start. Emanuele Oggioni from Kepler.

Emanuele Oggioni from Kepler. The first question is on the revenue model on data centers. On -- you mentioned before is more than EUR 100 million of EBITDA contribution in 2030, and EUR 400 million in 2035. So what could be the revenue model and the breakdown between generation [indiscernible] networks and also other fee services related to the that recognition to your plans? This is the first question.

The second is on the RAB. You increased the -- sorry, the first -- the second question is on renewables. Basically, you cut by EUR 1 billion, the CapEx plan compared with the previous one. At 3.7 billion from EUR 4.7 billion for an additional capacity of 1 gigawatt additional capacity in 2030. So I think this could be one of the reason also the some postponement, or as I said before, the delay of the EBITDA from '27 to '28? And what is the visibility on this -- due to the favorable track record in Italy, not up to [indiscernible] but up to the system overall is quite -- is not excel and in Italy every year, we experienced delay with severe delays in the permitting process, et cetera.

And the third question is on RAB. In -- sorry, for the generation business, the CapEx related to the CapEx, the additional question was also the if you have considered, or to what extent you are considered not -- probably not basing on your slides, the possible expansion of renewal of hydrated concession? So what this issue or driver could be further upside probably on the plan?

And back to the RAB. The RAB was increased, if I am correct, from EUR 3.4 billion to EUR 4 billion in 2035. So in this case, to what extent the electricity distribution concession renewal extension from 10 up to 20 years, et cetera, will -- has been already considered or not [indiscernible] would be an additional incremental CapEx and development?

Okay, Emanuele. Starting from generation because it's easier to consider that in this presentation, we decided not to recall all what we have in the plan. So the hydro is not in the presentation, but is in the plan. That means that the EUR 4.7 billion of CapEx presented in Life Yards plan included EUR 1 billion for hydro. So the total CapEx for solar and wind remain the same, [ 3.7 ].

EUR 1 billion is inside the plan exactly for the extension of the concession. And we are absolutely confident on the extension of the concession. And this is the reason for why we decided not to focus during the presentation, topic, but exactly [indiscernible] is particularly dedicated. So we want to close the number, are inside the plan, and we imagine to be able to go absolutely in continuity.

The revenue model. As we said, the revenue model included our natural activities in supply, distribution [indiscernible] inside our businesses. Probably, there are some upside because in this moment, we imagine that due to the increasing electrical demand. The price of energy will remain more or less at an extra level. But probably being a lombard and due, for example, to the opportunity to development of this heating, or activity with water management. But can be very [indiscernible] with data center. However historical activity can grow. But the EUR 400 million are location of data center. So the business model, this EUR 400 million are completely out of our business -- classical business line. So CapEx and location of space in data center.

On the grid, Luca, [indiscernible] do you want to?

I didn't get the question on the RAB, if you can repeat it for one?

It was about [indiscernible] extension to the grid distribution.

Yes, we are waiting for the decree.

We are waiting for [indiscernible] No, no. [indiscernible] The CapEx are absolutely included because in this moment, our investment in the grid is more or less [indiscernible] than the average national level. So surely, A2A is not to put [ other ] on the table. But to know when we start, the problem is that there is an activity from ARERA, and in this moment, we are waiting for the new board of ARERA will arrive, I think that quickly the situation will be closed. [indiscernible] is what we expected like extension 30/50.

And we haven't included any installed payments upfront for the new or the new or the concession, also taking into consideration that there is a discussion in place if this amount of money should be paid or not, considering the bill of the customer. But anyway, doesn't change the picture.

Roberto Letizia from Equita.

Of course, I need to remain on the data center because it's the most interesting part. So just wondering, you're including the EUR 400 million as the return on the investment. But is there the whole upside of serving the energy providing the heating? Or is that included within the EUR 400 million? And if so, how much of that EUR 400 million would be purely the return on direct investment rather than service. So maybe 30% is direct investment, 70% is servicing, forward heating and so on?

Just a clarification. Is it -- is that referring to the baseline scenario and not to the full upside potential just to clarify that. And wondering if in that EUR 400 million , there is any inclusion of connection fees? Or the connection fees would potentially come on top of that because that changes the overall return assumption.

I would like to recover Javier's question on the 2035 because actually, the old target was EUR 3.3 billion. So if I add up the EUR 400 million, I would be on EUR 3.7 billion, but the target EUR 3.6 billion. So basically, there's a difference of EUR 100 million. Is that because part of the data center was already included in the old plan for the renewables contribution, for example. So just wondering if part of that was already in the old target?

Then if you can share a little bit -- one piece of your assumption, which has to do with the [ CCGT ]. As a lot of energy is going to probably provide it by CCGTs. I guess you're assuming an improvement of the underlying spot spread, which are today negative. Can you share us just how much improvement in spark spread sets into the assumption of the data center contribution?

And yet, one final one. If you can highlight it back again, the source of the significant client addition through the plan. So as the market conditions are changing significantly and you several times reported higher competition shrinking margins and so on. But you are still sticking to the significant growth in market share on the clients. So maybe we can touch base a little bit on that topic?

Okay. That [indiscernible] starting once again from data center. The EUR 4 million as of EBITDA is totally linked to the direct investment in data center. So it's completely out every EBITDA that arrives from connection, distributing, generation, supply and so on, that are included inside the other businesses. The EUR 1.6 billion is included in the [ 23 ], and this is the main reason for why we shift from [ EUR 22 million to EUR 23 million ] of CapEx. So there are EUR 1.6 billion of CapEx more than the last plan, EUR 400 million of EBITDA in 2035 more. It's correct. The sum is EUR 3.7 billion. There is a problem of approximation because the last was a little bit less than EUR 3.3 billion [indiscernible] little bit more than EUR 3.6 billion. But overall, this is the target.

What is interesting, and I understand your question, your doubt is that [indiscernible] we have not changed our target in -- for example, grid connection, totally energy supply B2B -- yes, there is a growth, but not so huge. Or margin in generation, it is fast spread, for example, Also, if you imagine that the load factor of [ GGTs ] will change totally because to be able to source the data center, probably we need to go from 20% to 50% more or less.

Well -- so it's clear that there are some upside inside this business. But we believe in this moment, but it's not bad that to remain conservative in the valuation of our structural plan business, considering that we are facing the new business of location -- development, allocation of data center in which our target is material, EUR 400 million is material. So we want to face this plan approaching the data center [indiscernible] from all perspective. When joking, I said I don't want to go to do DJ to the party is because if I arrive simply plug the energy and all the business will be done by the developer. I think that I am not doing my work so well.

So I think that there are opportunities, in particular opportunities because there are place near our plans that can be super interesting for the development of this data center. Imaging to do some example to stay near [ Sila ] in [ Milan ], near [ WestEnergy ] plant in Brescia, near [ Cassano ], [indiscernible] 40 kilometers from Milano. All situations in which you can have a huge direct generation with redundancy.

In Cassano, for example, in this moment, we have 2 plants because we have [indiscernible] and the new [indiscernible], 108-megawatt installed 2 years ago that are able to give 2 direct source of energy, redundancy completely deconnected from the net of grid. So without [indiscernible] charges. So I think that this activity can be really effective. And surely, I think that there are upside inside our historical businesses for the development.

For example, one single example there is not upside in development of the [indiscernible] Milano linked to [indiscernible] but can arrive from the [indiscernible]. Only this example, you can understand. And this is the reason for why in the closing remarks, I said, okay, there are other EUR 300 million of EBITDA linked to potential upside in which our bottleneck can be the financial discipline, and which is possible also to find partners to be able to develop more [indiscernible].

On spark spread?

Yes, the spark spread. As Renato said, the assumption are very current with the previous scenario. So we haven't considered an upside in the spark spread coming from the development of the new opportunities of the data center platform. And maybe in a conservative way, because it is too early to understand the concrete effect of this kind of opportunity on the prices and the level of the demand. We are quite sure that they could potentially increase both the volumes and the prices if the situation is -- it seems to be considering the request to turn for the connection seems to lead to a really potential new opportunity.

We have considered in the plan only what we are doing with our projects. Also, the direct investment are based on few opportunities we have already identified. We are already under discussion with the developer. In the lens, we can have available for the connection to the grid -- or not to grid, to directly to our plants. And to have the opportunity to exploit directly -- extracting the most of the marginality we can. But again, it is let's say, few projects very concrete as we presented last year, a concrete approach with the [indiscernible] Nowadays, our approach is ready to power in a concrete way.

Talking about the customer base, you have to consider 2 elements, is sure that there is a high competitive market. But you have seen our growing in electricity customers, 61% between 2020 and today. So we are very focused in premium acquisition. So we are working to avoid [indiscernible] to do, let's say, the washing machine with the customer with that value. So the problem is to decide clearly, which are the channel and the typology of customers that are interesting. And in this case, also due to the fact that you have a customer base also in this region with a market share [indiscernible] and very strong with very low churn, we imagine to be able to grow, reaching a target that is big, but it's not monster because in this moment.

We have to -- we are at 3.6 million of customer. We imagine to arrive in 10 years in -- to 5 million. So you can understand that the growth that we imagine in the next year is not the same, but we have seen in 60%, 12% year-by-year in the last 5 years, exactly, because there is more competition and because the market is this one. It's not a market that grows. And there are some players surely aggressive.

But we optimize our acquisition strategy covering all segments and with super concentration in electricity market that is growing very well. Also because I think that customer can understand the differences between the companies that at really produce energy and bet only trade energy. For example, our PPAs mass market, we do offer is growing is more than 100,000 customers. 10 years contract, but it's very interesting for us also because he's able to hedge with this customer base retail our renewable production. But it's interesting because the price that we reduced in -- exactly in the last weeks because there is a scenario which is possible to reduce this price arrive to EUR 105 for megawatt hours is super interesting fixed for 10 years. So it's super competitive. And it's very difficult for a company that trade energy to be able to propose on the market these kind of products.

So I think that our capacity to compete is huge on the market -- electrical market, less in the gas. And this is very on for why our strategy is working to change completely the market share between the 2 customers.

Let's take one more question from the floor, then we move to the line and then back to the floor, okay? Francesco Sala from Banca Akros.

The first one is on the hedging activity for 2026. If you can share with us an update on quantity and prices? The second one is if you can give us a sense of the efficiency of new CCGT plant compared to the so-called traditional ones? And finally, what are your assumptions on electricity prices during the [ plan horizon ] and [indiscernible] for the regulated businesses and CPI?.

The hedging level, now we have reached -- we are not at the end of the year yet. So 60% of the fixed price at [ 111 ]. This is in line with our expectation. And in line with the price of our scenario. As I said, the scenario consider a price of the energy in between [ 105, 108 ]. So this is absolutely current. Last year, it was above [ 120 ].

About the efficiency of [indiscernible] I tell you a story. When we decided to revamp Monfalcone. Monfalcone was a [indiscernible] plan. [indiscernible] could plan as an efficiency of 30%. But consider that an older CGD plant, for example, our plant on the [indiscernible] is less than 50%. When we did a beauty contest to buy the machine for Monfalcone, there was a tender between the 3 typical players. Siemens, GE [ Ansaldo Energia ]. And one of the most Important elements during the tender was efficiency. And the differences was our plant in -- we closed the agreement with Siemens at the end. 63% of efficiency. The other player was [ 62 point ] But the difference is of 0.1, 0.2 is the differences to be called by Terna or not to be called. Because when Terna ask for energy, the elements to call the plants, the generation plants is linked to CO2 production, let's say.

So it's super important to be efficient, not only because you are more sustainable, the price of energy is lower but because the plant works more. And in this moment, the differences is incredible. So the old fleet that we have in Italy has an efficiency less than 50%, between 40% and 50%, depends from the plant. The new fleet that is under construction from A2A is on [ NLP ] as more or less an efficiency between 62% and 63% [indiscernible] situation.

That is a super good news for Italy because the 2 models that you can have in this moment to close the gap between renewable and consumption are nuclear or CGTs. in this moment, difficult to have another way. I think that it's difficult to see nuclear in Italy in the next years that you can imagine. But in Italy, we have a fleet of [ CGTs ] super performance, in particular, for the CapEx that we did in the last year, and was done this investment to avoid the risk of blackout. So to make our grid and our network resilience. And now is able to source [indiscernible] data center because the data center should grow with the demand, but not double the demand. So there is a growth that is completely -- is absolutely possible to be managed with actual fleet that we have.

Also because during this year, the renewable will grow because the target of 63% in 2030, I think that is key to be reached. And so the mix between renewable battery storage, you have seen 30, 35 [indiscernible] for time shift. It's super low guys because when we have seen the base price for the tenders of [indiscernible] that was EUR 37 for megawatt and was assigned to [indiscernible] the differences in time sheet is between [ EUR 60 ] per megawatt hours and [ 30 ]. And these differences between to have renewable but can be competitive all the day or not?

So I think that the situation in which in Italy, we have renewable but works well. Battery storage, low price entities high efficiency can work. Then in the future, will arrive carbon capture and storage, we see another good news maybe. But now it's absolutely enough to face the situation today.

To be more precise, Francesco, I was referring, of course, to 2026 with the hedging of [indiscernible]. '25 is nowadays more than [ 18 ]. And regarding the CPI index, it is [ 1.8 ].

And the price of energy we imagine that we remain stable around EUR 110 per megawatt hour, EUR 100, EUR 110, but the situation in [indiscernible] a little bit of [indiscernible], but now the [indiscernible] is very low, very low compared with other period or in the store is very high, but compared with the last year, it's very low. And so all the scenario says that due to the demand and to effect in Italy, there is no elasticity -- sorry, there is a lot of elasticity because we are short of generation. The situation is that the price on price will remain more or less what is today.

So now let's move to those guys connected to the line please.

So the next question is from Sarah Lester, Morgan Stanley.

I hope you can hear me okay. Sorry to focus on the data center angle, but I do just want to unpack this a little bit more pleased to be totally clear. So firstly, basically, if we look at the 2028 to 2035 EBITDA guidance given today, that does include some data center uplift. I just think it will be very helpful to understand just how resilient that guidance is to a negative change in the pace of the data center build out. Of course, A2A's business mix is very robust. And you mentioned many tools in the toolbox, I presume, therefore, that it does offer very good optionality for other growth opportunities. So just wanted to really clarify the resilience of your guide, please put downside data center case.

And then on the upside case, you mentioned the full potential of data centers is not included in the plan, that the opportunity could be much larger. And I think this is a really critical point. So to clarify, please. Is it fair to conclude from everything you've said so far that there could be meaningful upside in a variety of your classical businesses like generation grid [indiscernible] water that goes above and beyond today's plan?

Okay. Yes, if you look at '28 to '35 there is a growth that is included in our historical plan. It's the same of [ Life Yard plants ] because there are some few moving parts. For example, a [indiscernible] reduction in e-mobility, [indiscernible] reduction in biogas, or in some other business. But all the CapEx was recovered in the growth of power grid.

Consider that we are in a situation in which power grid is able to absorb let's say, an infinite quantity of CapEx, all the CapEx that we can put on the table are able to be absorbed by the power grid. So to understand what happened in our company, when we arrived in June, we do a [indiscernible] review of the CapEx. I call all my guys and say, okay, are you able to do all the CapEx? [indiscernible] CapEx, not sure to the power grid because power grid? [indiscernible] permitting works in its assets and is able to deliver every quantity of -- so despite the EUR 400 million and EUR 1.6 billion of the data center, I think that our plan is super solid because there is a mix of business that is surely able to deliver the numbers that we are seeing.

Coming back to the data center. First of all, I think that surely in Italy will have a data center. The situation in this moment of a data center is better 10,000 data center in the world, 5,000 in U.S., only 2,000 in Europe, only 168 in Italy. And Italy is 13 countries in the world for data center installed. And we need surely a lot of data center simply to arrive to the benchmark and consider that there is an issue of strategical autonomy of Europe on some topics like intelligence -- artificial intelligence. And we need to have, in some countries, surely data centers.

Milano in this moment is considered with [ Madrid Dorigo ], the three places cities in Europe, but in the next years, we grow more in data center. Also because in this moment, compared with the target with the benchmark Milano is much lower. I said that in Milano, in this moment, the only data center of medium side is from telecom and this 30-megawatt near Milano. So surely, we have to work a lot. So I think that it's impossible that in next year, we don't see new data centers. The topic is a way we'll be able to attract and to develop data center or not.

The [indiscernible] application is a fact better data center with inside is able to connect it to our generation plant is able to be super competitive against the other on the cost of energy, that is 65% of the total OpEx of data center. So I think that is possible. The business model is EUR 1.6 billion of CapEx allocated on -- to build data center, of course, with a partner able to do. And EUR 400 million of location, so of EBITDA that arrives from revenues from locations.

So I imagine that the plan can be can be solid. Of course, if no one data center will [indiscernible], I mean, Italy compared with this [indiscernible] can be outside. From the other side, I think that there are a lot of upside exactly because the effect of a way like energy partner, surely will arrive because in a world in which the electrical consumption will grow. The national low and the regional low in the next month, we say that it's key to do good water management to recover it in the distributing, to be able to be well connected to the network, to use brownfield areas and so on, I think that open the door to opportunities, incredible opportunities for a company like A2A in Lombardy. And so the upside are surely inside our historical business plan, in which, frankly speaking, we didn't change the our historical target. So there is space to grow in the other business.

Yes, if I can add, you have seen the list of potential projects we have and we have not considered in the CapEx plan. It is clearly listed. Of course, this help us in the case, we could have a downsize in any situation to readjust the CapEx plan with the lease we have aside on which we are continuing to work internally. So it is not a list of dreams. It is a real list of project on which we are going to work every day. So it is easy to switch one project with another in the case, one project is not going at the end, or could be finalized in the way we want.

We was able in the last 5 years to do [ EUR 10 billion ] of CapEx between organic and inorganic, and to move EBITDA from EUR 1.2 billion to EUR 2.2 billion. So I think that the proof that we are able to fix targets real targets and also to surpass it in our history.

And from a financial point of view, if I can add. It is very clear how strong is the situation, considering your cash generation coming from our projects. And this is the answer to be able to maintain a certain speed without slowing down, and to have the opportunity to continue to grow organically, and to look at opportunities because we have the solidity of a leverage ratio very affordable, a nice FFO to net debt. So really in the position to look at the upside potential in a very positive way.

So now back to the floor, Davide Candela from Intesa.

First one, again, I want to be redundant on data centers a clarification. Just thinking how you want to feed [indiscernible] to the data center because I was reading through your numbers and did look like the [ CGT ] by 2025, they have load factors that are below 20%. So it is about that you see the change in mix, and so the CGTs would be just for bigger solutions or not? Or because you are not including, as you said, those potential to be just a supplier because this is key to me to see the value of the [indiscernible] fleet you have and how this would be this value maintained in future or not?

Second question also on energy supply. This is a high-level question. Just a share of your view about the competition. My question is, do you see a scenario in which we see a further increase in competition when you are required to have -- to put retention costs as we did in the past to maintain those high-value customers you are saying today because everybody are focusing on the value-added customer base. And so I was wondering if you see a [indiscernible] like that or not?

And final question about your sites and opportunities in Europe. How much you are included in the plan in terms of CapEx or if you are not? And if you can deepen more on your strategic approach in that?

Okay. I think -- thanks for your question. I think that coming back to CGTs and data center, probably, I can use an example that can be interesting for you. We received this year, or last year, I don't remember, the authorization for the new CGTs high efficiency in [ Castano ]. So in this moment, we have authorization to build a new CGT plant [indiscernible] of efficiency in [ Castaneda ].

And if you look on web, you can find a lot of discussion about the opportunity to build a pipeline to bring not only electricity, but also heat recovery from [ bad plant ] and [indiscernible] To build the CGTs, we are waiting for the tenders for capacity market probably in February we see. But if will arrive and will arrive probably we are almost sure that will arrive the tenders for capacity market. And we will do that application, of course, to be able to build [indiscernible] The demand will be okay, but we'll build also infrastructure to bring 1 terawatt hours of [indiscernible] recovery to Milano for discrediting or not. And this depends simply from hypothesis, that a part of the plant will work baseload or not? Because, of course, if the work is only like [indiscernible] is impossible to imagine that is able to source a [indiscernible].

But imaging now to build [indiscernible] data center, a big data center 200-megawatt, that means CGT that works baseload for a part of the capacity, probably enable the opportunity to recover it from the data center and from the plant. But can be a super opportunity for [indiscernible] because we have to face the decarbonization of Milano and it's not easy to face the decarbonization with heat pumps in the single building. So it's interesting to understand how data center in CGT can have a mutualistic symbiosis because data center needs baseload energy and CGTs is perfect toward base load.

So I think that the opportunity in this moment to have space in CGTs generation is a super news to be able to develop really data center in Lombardy and in Italy. So talking about Europe, the CapEx are included. So consider that we have, in this moment, [ 30 -- EUR 23 billion ] [indiscernible] because it's the plan [ 2435 ]. For under construction, more or less, to assign. So we have authorization, we can start, but we can also change. And [indiscernible] to find. So in this moment, the opportunity from Europe is that if there are opportunities in which we see time to market better and a better return, we can decided to change some projects that we have in Italy with projects in other countries.

The goal is from one side to become an European company. And frankly speaking, I think that is very important for all the big companies in Europe to have the mind of an European company. From the other side to reduce risk to derisk because if you are able to do cherrypicking in other countries in business that we know very well, in which our leadership is known, in which there are opportunities of return better, why not? This is the strategy.

Of course, probably it's easier to arrive with the first move in organic, but it's typical, but also if you go in [ Calabria ], typically, we start from an organic move. And then you can consider this strategy, once again, like a way to the risk of the plan, the risk intends to be able surely to do. To put on the table, really, the [ EUR 23 billion ] of CapEx.

And on the supplier retention, we paid the retention because during the [ foolish ] situation that we have during the [ war ], you remember we had some customers totally out of position with price EUR 300 per megawatt hour, and we decided to put on the table how many money, EUR 100 million, EUR 100 million. The last 20 in this year, exactly, not to penalize our customers because we believe a lot in the strong relation between A2A and our customer. I think that is also customer B2B. And so in this moment, there are no needs of cost of retention. The need is to be able to be -- to find customer of quality.

I understand that you say, okay, but all the players want quality customer, of course. Probably the difference is that, once again, our position even although Italy is not [indiscernible] to -- and the other element that I think is very important is that our awareness in this moment is 60%, 65%. Our market share is less than 10%, is 7%, 8%. So the huge differences between market share and awareness is the funnel that helps us to grow. Not [indiscernible] up to [ 20 million ] of customer, but to [ 5 years ].

So thank you, everyone. We are out of time. If you have a need for any type of follow-up, please contact the IR department. Thank you, Renato. Thank you Luca.

Thank you all.

And thank you, everyone.