E.ON Stock

Hello, everyone, and welcome to our 9-month 2026 results call. Thank you for taking the time to join us. Today, as always, I'm here with our CFO, Nadia Jakobi, who will give an update on our financial performance. As with every occasion, we will leave enough room at the end for your questions. With that, over to you, Nadia.

Thank you, Iris, and a warm welcome to all of you from my side as well. For our 9 months reporting, I have the following 5 key messages for you today. First, we achieved an adjusted EBITDA of EUR 7.1 billion and an adjusted net income of EUR 2.2 billion. This represents a broadly stable adjusted EBITDA and a 4% year-on-year increase in adjusted net income fully in line with our expectations. Based on the midpoint of our full year guidance, that means that we have achieved roughly 75% of our guided adjusted EBITDA and 79% of adjusted net income at group level.

Second, our sustainable growth continues to be underpinned by investment driven earnings growth and strong operational delivery. Our robust investment execution continues. This demonstrates that our growth trajectory remains firmly on track and provides a strong foundation for long-term earnings and value creation.

Third, our business model remains robust. Higher oil and gas prices, together with a push for greater energy solvency depends on fossil fuels are accelerating electrification. In particular, higher fuel fossil fuel prices are further incentivizing the adoption of EVs and heat pumps. These developments create further need for good infrastructure investments.

Fourth, while we continue to invest at scale, we maintain a solid balance sheet that supports both growth and capacity to execute. Our economic net debt [indiscernible] to normal business development, the strong operational cash flow offset by continued investments. It is temporarily affected by a noncash effective accounting-driven effect, which will largely unwind during 2027. Adjusting for this, economic net debt stands at EUR 46.1 billion at the end of Q3.

And finally, we fully confirm our short and midterm guidance, including our dividend policy. Our adjusted EBITDA for the group came in at EUR 7.1 billion, broadly in line with last year.

Looking at our segments. Our Energy Networks business delivered stable earnings year-over-year as expected. Continued organic growth in our regulated asset base supported earnings in all countries. In Germany, the positive RAB contribution was offset by cost for further growth and the nonstructural effect from the deconsolidation of NEW AG. In our European markets, RAB driven growth was also continued, but was partially offset by the structural effect of the sale of our Czech gas network business. Besides, we continue to benefit from positive effect, especially in Hungary and Sweden.

Turning to our Energy Infrastructure Solutions business. Adjusted EBITDA grew 15% year-over-year. We had new projects going into operation for commercial and industrial customers in several countries. Additionally, we continue to benefit from the pass-through of higher sourcing costs, which were offset by lower hedged power prices in our U.K. Biomass business.

In Energy Retail, the performance developed in line with our expectations. Underlying operations in Germany remained stable with operational improvements to foster future growth and customer experience. However, year-on-year earnings were impacted by the deconsolidation of NEW AG at the end of Q3 last year. In the U.K., the performance of our B2B business has continued to normalize. In our B2B business, we have seen positive effects from higher average margins on fixed-price contracts compared to prior year. The negative quarterly development in the U.K. mainly reflects the recognition of costs related to the warm harm discount, which were previously solely reported in Q4. But this is just a phasing effect and will unwind by the end of this year. So neutral from a full year perspective.

Our adjusted net income came in at EUR 2.2 billion, showing the expected normalization. Financing expenses increased over the first 9 months as absolute net debt levels are rising with our continued investments and higher refinancing costs versus the maturing local power bonds. We expect the rising interest effect to continue during the fourth quarter of 2026 and beyond. Overall, we remain well on track to drive our full year adjusted net income guidance for 2026.

Let us now move on to our economic net debt development. The execution of our investment program remains strong. Our group CapEx fill rate stands now at around 60%, which is in line with our typical 9-month level. We remain on track to deliver our full year investment guidance of around EUR 8.7 billion. This amount does not include the over transaction, which was successfully closed in early October. This acquisition makes us a top 3 player in the U.K. market, head-to-head with Octopus and British Gas.

Our economic net debt development was supported by strong operational cash flow as expected. However, we saw a temporary noncash effective E&D impact from different accounting treatments of energy procurement transactions to manage our liquidity and counterparty risk for our Retail business. These effects were largely unwind over the course of 2027. Excluding this impact, we see a decrease of our economic net debt from EUR 46.5 billion at the end of the second quarter to EUR 46.1 million at the end of the third quarter, in line with our usual seasonal cash flow pattern.

Our debt factor target of below or equal 5x remains unchanged, and we are fully on track for our expected cash conversion rate of [ 100% ]. In summary, our robust leverage level continues to support our current investment program and a potential future upgrade provided that regulatory conditions are attractive.

Before I finish today's speech, I would like to touch upon the most recent regulatory development of importance for our business. Let me start with the last week's announcement by BNetzA regarding the regulator work for gas networks in Germany. We very much welcome BNetzA decision to respond to changing market -- capital market conditions, particularly the higher interest rate environment by trasponing the WACC determination to 2027. This shows that the regulator is receptive to well-founded economic feedback from the industry. As a result, all WACC parameters will be updated next year, incorporating capital market data from 2026.

Importantly, this will replace a low interest year with a higher interest year in the historical reference period, which will have a positive impact on regulatory returns. We believe this is a step in the right direction. Ultimately, however, it is essential that all parameters for the cost of capital will translate into a reflective regulatory returns, which adequately compensate us for our cost of capital.

We still believe that the dynamic adjustment mechanism in the cost of debt method for existing assets, which is market standard in other regulatory regimes is the right and fair methodology for the network operators as well as for the customers. According to the publication of the NNetzA, it came anticipated that the WACC determination for power networks will also be postponed by one year to 2028 under comparable conditions. We welcome this development. replacing a law with a higher interest rate year combined with a higher weighting of recent years, in line with the industry's investment profile will lead to higher and more market adequate regulatory burns for power networks.

We remain confident that the regulator will consider internationally competitive parameters for power WACC determination. Also, the political backdrop supports accelerated grid investments and further electrification as recent European and German energy policy legislative proposals demonstrate. This brings me to the newly published network development plan 2026 for distribution grid operators. Also the new NAP '26 confirms the fundamental need for further good investments. It shows continued long-term growth for E.ON's DSOs from increasing PV and wind expansion, ongoing further electrification of industry, heating and mobility as well as data centers and large batteries as new increasing drivers. It confirms our long-term growth path and sends a positive signal for continued long-term investment.

Finally, the Swedish regulator published the preliminary RP5 model for electricity. With that, the official consultation process started and now together with the industry, we will use the referral process for feedback. The presented model includes an unsatisfactory WACC methodology. However, the WACC is not the only key regulatory parameter. Ultimately, the overall framework is important for the level of allowed revenues.

The final framework is only expected by end of October next year. In the past regulatory periods, we have successfully challenged the regulatory decision in front of the court. We remain confident that the final framework will support the substantial investment needs for continued electrification in Swedish.

Let me conclude today's presentation with the following messages. Our strong 9-month results show that our operational performance and investment ramp-up remained fully on track. We continue to see the midpoint of our group guidance range as the best estimate for our full year results for both EBITDA and adjusted net income. With that, we fully confirm our full year 2026 guidance and 2030 outlook, including our dividend policy. Our balance sheet remains strong. We will continue to focus on attractive value created by organic growth opportunities while rewarding our shareholders with a growing dividend.

And with that, back to you, Iris for the Q&A.

Thank you, Nadia. And with that, we will start our Q&A session. And the first question comes from Alberto from Goldman.

So I'll stick to two real questions. The first one is I wanted to ask you if you think that these changes or, let's say, modifications in the time line by the regulator are sufficient for you to take a judgment call and take a decision on investments. I'm not asking you if you are going to increase CapEx or not next year, but is this sufficient for you to take decision in February? And if not, what's missing?

The second question, I wanted to ask you, please, Nadia, on the network development plan. Because it's done by company, we have seen some aggregate data by the regulators talking about, I think, around EUR 240 billion -- to [ 2045 ]. I wanted to ask you, a, if this number you think is correct; and b, if not, what you think is the right number? And does this imply an upgrade to the theoretical CapEx you ought to be spending in Germany?

Yes. Thank you, Alberto. So when it comes to the CapEx, we always said we stand ready to accelerate our investments if we see attractive value creation potential. And what we always said is that our decision on when to [indiscernible] where the CapEx is past dependent on how the regulatory framework develops on the way to full visibility in 2028. And last 12 months have been sort of difficult in some areas, as you know, difficult start in the regulatory framework consultation end of last year and the publication of the draft gas work was as we highlighted, also disappointing. So now we very much welcome the decision of BNetzA to respond to changing capital market conditions and postpone the gas WACC determination to 2027. And what we also very much like is that there's a public announcement that there will be the similar approach for the [indiscernible] WACC determination in black and white.

So now what still needs to be ensured that all relevant parameters, including the beta ultimately translate into regulatory turns that adequately compensate us for our cost of capital. So -- but what we now see that we have a gradual and also positive increase in visibility of regulatory parameters that we could now gain from the last announcement, and that could mean that we also gradually increase our CapEx envelope. So that was the one for the first question.

And then second question, I think I don't know whether we have the number that you highlighted was what the number was.

There's a EUR 240 billion...

EUR 240 billion. So I don't -- maybe the EUR 240 billion, that's for us, I don't exactly know how that breaks down to all the different DSOs in overall Germany. Maybe I can just highlight a few things. what was relevant from the differences in NAP '26 to NAP '24 that we see in what we saw in NAP '24 in our [indiscernible]. So we see roughly approximately a 20% increase of CapEx requirements over the whole period. But of course, we have already highlighted that we see approximately an investment need at the back end of the plan of approximately EUR 1.5 billion to EUR 2 billion per year at the back end of the plan. We would still think that up until 2030, this EUR 1.5 billion to EUR 2 billion more in potential increase is backed up by this new NAP '26, even though if you look at the pure numbers, the NAP would even include sort of a bit -- maybe a bit even higher than EUR 2 billion. But of course, we have got permitting constraints. It's a blue sky scenario. And the permitting will not change that fast. And as you know, 2030 is already around the corner.

But what is an actual fact now positive extra investment when you look at the whole period until 2040, for example, that we have now new things to connect like the data center boom wasn't fully considered in 2024 NAP and also some of the batteries, the battery development was not yet foreseen. So even though that is not directly linking to a higher actual investment up until 2030, it's still shows a protracted growth in the 2030s than what we have seen before.

Thank you, Nadia. Thank you. With that, we move on to Pavan from JPMorgan.

I'll also stick to two, please. Firstly, Nadia, continuing on the questions on RP5. Could we maybe just have a refresh on the other topics of interest relating to the framework. So in the past, we've talked about OpEx benchmarking, redispatch costs. So can you give us a reminder of where we are on those topics and when we should expect updates to the parameters that sit outside of the WACC? That's my first question.

And then secondly, going to Sweden, the early view of the return was clearly a lot lower than what you were getting in this regulatory period and implies downgrades. If -- I appreciate it's early stages, but if the regulator sticks to its view that this return or a return similar is the right one. Can you talk about what recourse you have to higher returns in Sweden?

Yes. So thank you. So the -- outside of the WACC, there hasn't been any relevant news flow as could be anticipated. When you look into our IR material, plan for looking into power cost and benchmarking and will only be happening in 2028. And at this point in time, we are just looking at the gas cost allowance, but also on the gas cost side. Topics around benchmarking efficiencies will only come over the course of 2027.

So and also on OpEx adjustment factors also, of course, only relevant from the power side. And this is based on the benchmarking results. So also that will then also come and materialize in 2028. So no news on that as actually anticipated.

Then on Swedish regulation, yes, you are very well summarized it. So we came from a strong regulatory period 4, and we would have had assume some adjustment, what was now published is clearly disappointing and absolutely not satisfactory. Of course, the WACC is not the only relevant part of the regulatory system, but also some other regulatory parameters, but it is, of course, an important one.

Clearly to say this is only beginning of the consultation period. We will now use the whole industry to come back to the regulator within the 3-week referral process that we now have. And then we will continue with bilateral dialogue together with the other industry participants. And then we expect then the final determination by the regulator in October next year. So clearly, Swedish system works a bit differently. So we have certainly in the formal regulatory period, we always challenge the regulatory decisions in front of the court, and we had very successful outcomes. And then also the Swedish regulatory system also allows for some certain early collection if you're anticipating a positive legal court case.

So having said that, we remain confident that the regulator recognizes that with the current proposal that is not possible to attract capital for continued electrification. And -- but then we would also have a second step, what we've been seeing in the past to go via putting the topic in front of court and get a successful outcome there.

Thank you. So we move on to the next question from Harry from [indiscernible].

Two, please. So first one is a follow-up to Alberto's one. And I noted down that you said we could gradually see an increase in the CapEx envelope. So just focusing on a single word gradually. I'm just trying to understand how to characterize that. Is that saying that we could see some upgrades in February 2027 and then some more upgrades in February 2028 and so on moving towards potentially an envelope that could be even bigger than the plus [ EUR 1.5 billion to EUR 2 billion ] given that you mentioned earlier than that the NAP could actually imply a higher figure than the [ EUR 1.5 billion to EUR 2 billion ] upgrade that you've been talking out about before. So would that be a sensible way to assume things -- how things might turn out?

And then secondly, on a totally different topic. In the retail business, a genetic AI switching came back on the radar a month or two ago with news in the U.S. Now I presume you're not seeing any impact in Europe because these apps have not been approved under data protection regulation, et cetera, in Europe. But what is the E.ON action plan, if there is one, if these apps do become available, what are your initial thoughts on how that could impact your business? And in particular, what are the kind of risk rewards? Because I presume if you get a more price-sensitive market, it could actually had an advantage to businesses like yours, which have a very strong procurement function. So just interested if there's any brainstorming that's been done at E.ON about what impacts AI switching could have on Retail.

Thank you, Harry. So regarding the first question. So if we were to decide that we gradually increase our investment, we would usually inform you about that as part of our full year reporting because that's after we finalize our midterm planning. Just to come back to the number that we have just highlighted. So what we've said earlier that we would be able to increase the investment envelope by [ 1.5 to 2 ] years, per year at the back end of the year at the back end of the plan. So the back end of the plan is for us now something like 2029 and 2030 with some potential to also ramp up earlier.

So this is the order of magnitude that we are talking about when we are looking also the potential that comes out of the NAP with some deductions for the blue sky scenario that the NAP is and some restrictions that we face on the permitting side. And yes, and as we said, as visibility increases, and as we can actually narrow down where the actual return will lie, we can also give them more and more clarity around the CapEx commitments.

And then the second fully unrelated topic, of course, we are following all the topics around genic AI very closely. I think in retail and our retail businesses that we have, we have got price comparison websites already provide white now, very high transparency and where we simple switching. I think what we have been seeing before, there were also things like automatic switching, I think, I guess, in the U.K. that happened. I don't believe is something as fundamental as energy supply is to people and to people's homes to just have automatic switching. I also wouldn't foresee that with new AI developments like [indiscernible]. We actually see, as you know, 7 out of 10 customers remain with E.ON for more than 3 years, which demonstrate our clear brand value of being a stable and creditworthy and reliable customer -- the provider that also doesn't increase prices at a whim, but also looks forward to look after the customer by having a long -- sort of a good portfolio management, as you highlighted. So we have got the good procurement practices. We have the balance sheet to also provide for these good procurement practices and that is being valued by the customers.

And of course, this is not the only topic that counts for our customers, but also good customer service being approachable. So answer is, Yes, we take that seriously. Second, we have seen similar topics via this very via the price comparison websites, and we respond to these kind of are AI agents like NEWS in a similar way by providing a good product offering for our customer.

Thank you, Nadia. With that, we come to the next question from Ahmed from Jefferies.

Just two quick questions from my side. Your comment on the $1.5 billion to $2 billion potential upside towards '29, '30 on the back end of the plan is very clear. And I note your sort of points about permitting and all the restrictions. But I wonder whether you could talk a little bit more longer term. When you look at the NAP, is the potential for incremental CapEx much higher than this EUR 1.5 billion to EUR 2 billion, assuming you get sort of the regulation in incentives as you want them to be meeting with your investment criteria because potentially more longer term you can sort of -- there's more flexibility in the business to work around permitting as well as some of maybe the supply chain constraints. So that's my -- anything directionally you can talk a little bit about that would be helpful.

My second question is just on U.K. Retail. So OVO transaction obviously closed or has now closed. I was just wondering if there is anything incremental on the impact from that business on the group's financial outlook since you sort of last guided us given its close thoughts would be a little bit further into the process, just sort of check in on that with you.

So maybe we will start with the last question. So on OVO, when it comes to financials, we've been now 4 weeks into the business. And we can just -- we stick to what we have been saying earlier. We will have this low [indiscernible] EBITDA impact and high double-digit million euro net income impact in 2030. And all the topics that I said that hasn't changed. I think we also highlighted that there might be a low negative impact in 2026. So nothing of that has changed. But as you are asking for it, so we are very happy with the progress that we actually closed the OVO transaction. We are now 4 weeks in. We immediately established business continuity. We exchanged the management right away with experienced air management who also have been instrumental to our U.K. transformation in the last years. we've directly set up now our post-merger integration transformation office.

We -- all the things that have no direct relationship to a platform decision, we work now to realize synergies from now on, i.e., bad debt practices, i.e., aligning commercial gardways between E.ON Next and OVO. So we are very happy with how the last couple of weeks went in the start of our multiyear admittedly over integration.

So then -- next topic, yes, when we look at our NAP 2026, we see, first of all, that there is now a longer time period of growth and that there is actually some further potential step-up compared to the level that we are seeing for 2030. That is more the tunes of -- I wouldn't now want to quantify it to the last digit, but there might be some other increase of some shy of 20% where we could also potentially increase compared to the numbers that we've been highlighting in this EUR 1.5 billion to EUR 2 billion. But of course, that is all very, very clearly linked to having an attractive regime because this, of course, is something which also needs to be financed.

And for that, we need an attractive regulatory regime to actually finance the additional buildout that is now being seen in the NAP '26.

So with that, we move on to Wanda and your questions.

Wanda Serwinowska, UBS. Two questions from me. The first one is in Sweden. It hasn't been an easy country for you. If I look historically, you got something like 130 bps upgrade following the court case. In the current RP, you didn't get anything. So what is the Plan B? Because can you scale down basically CapEx in Sweden if the outcome is not good for you? And can you also remind us how much money have you under-collected in Sweden? Because from what I remember, it was a few hundred in euros that you see need to recover?

And then on the second question on Germany. If we look at WACC, of course, is a good development in the risky rate and cost of debt for -- I mean for CapEx and the existing assets. But at the same time, you need to refinance, right, some of the existing debt in RP%. So what -- and I would assume this is one of the pushback. Is there anything else in your -- that you see in the updated WACC that you'll be very happy to basically push back on you on the industry that you still disagree with?

So look, on the Swedish regulatory system, you know that it is a real system, not a nominal system. And you cannot just purely look in -- when we look at now at RP4 and before. And you now only look at the at the pure year work. This is not only in the full picture because you would also need to look at with what amount the asset base has been -- with what kind of factor, the asset base has been revalued to come to the regulated asset base because in a wheel system, you would always then multiply the asset base with the inflation assumption. I think we would need to look at them in combination.

So we remain confident that through the challenge in courts, we receive an adequate return in the end, as we have actually always shown in the past. So when we look -- and you've been asking now for the collection of carryover from the past, we have been collecting a mid-triple-digit million euro amount in the -- so we have mid-triple-digit amount that still needs to be collected in the next years. But we are confident because this is also nothing that is legally ensured that we are able to collect that from previous regulatory periods.

Now that I have been so involved in the Swedish topic. So I think on the refinancing in RP5, I think we have been highlighting that in all the different calls in the last quarters. From our perspective, and we will still argue for that, it is correct to have a dynamic adjustment mechanism for existing assets. And it is a fair solution, not only for us but also for the customers because none of the 2 need to carry the risk. And we also see that as something just which is very clearly best practice also in other regulatory regimes.

With now the postponement of the determination, both for gas, but specifically for power we see that moving into a good direction, but there is still a gap to a fair pass-through. I guess this does that answer your question?

There is still one on the CapEx cut in Sweden. I mean what is the [indiscernible] required level?

We would only consider I think we have got very -- of course, we don't know whether this proposal will keep standing as it is. No, it's another 10 months to go until the final determination comes. I think we have got very good arguments to challenge the current proposal, which is on the table because that is clearly is not reflective of economic reality. That's why we are confident, like we have demonstrated in the past that, that can be legally challenged. And that's why we don't foresee anything like CapEx cuts at this point in time. Yes.

But would you consider it?

In the end, we are absolutely determined to spend money where we create value, and that applies to all our countries and everything what we do.

With that, we move on to the next question from James Brand from Deutsche Bank.

And great to hear that you feel like you get more visibility on the regulatory framework in Germany. I have two questions. The first is on another one on Sweden. But please correct me if I'm wrong, but it ever seems to be focusing on the WACC proposal, but there also seems to be a change, again, correct me if I'm wrong, from moving away from a replacement cost to just inflating the RAB with inflation, which is quite a big change. And I was wondering whether you thought that was something that you might be able to argue against or whether it's something that you might be able to challenge in court? I'm not quite sure how the overall legal framework around the regulation setup that, that might be something that might be legally challengeable. But do you think that, that's something that you might have a chance to argue against either for the review process or legally? That's the first question.

And then the second one is you mentioned this kind of EUR 1.5 billion to EUR 2 billion increase at the end of the plan, which is kind of what you talked about in the past. But then we also have this initiative to try and double the pace of grid connections, which you sound quite positive about the broader German and EU legislative backdrop around that. So I guess my question is kind of does that not kind of increase if everything was to go double the pace on the connection side, would that not increase that EUR 1 billion or EUR 2 billion more at the end of the plan?

So when we look at our -- the Swedish proposal, the current proposal on what calculation is in line with our expectations. So I don't -- and the methodology that has been used was a favorable methodology. So I cannot go into the details about replacement via inflation. We can just say from our perspective, the way the RAB is being calculated and inflated is, for us, a fair methodology.

And then the second point regarding faster connection and doubling the connections. And clearly, everything what we see from the political arena is pointing towards more electrification, faster electrification, faster connection when you look at what Osafondelin said in mid of September in a state to Union, like everybody is pointing to that. And when you look at today's like gas and oil prices, it is actually very much the right thing to electrify energy soft warranty for us in Europe is high on the agenda, and it is all clearly a business case to electrify both when it comes to transport, i.e., EVs, but also when it comes to heating, heat pump and of course, very much so for the industry.

And our point is not that we haven't had enough connection request before. I think we have been highlighting over the past couple of quarterly calls, there is a huge amount of connection requests. For us, it is more the point, okay, can we -- with this EUR 1.5 billion to EUR 2 billion, we think is something that is possible to accomplish also being limited when it comes to permitting, particularly on the 110 kV side, we are still we are still way behind of what we would find appropriate.

There is, of course, this distribution package that is currently being discussed where we get where the intention is that the permitting should be increased, like the increases that we have been seeing for TSOs, but that is not yet in place. So -- but even if that -- to get a new 110n kV corridor in place, it's nothing which is then going to materialize a permit for that in just a few months, whether it's still take more years. So -- and we would also say EUR 1.5 billion to EUR 2 billion from where we are now. We are now at approximately EUR 5.3 billion when it comes to power RAB investments that is already quite a sizable step-up.

And the next question comes from Louis from ODHO.

So two questions as well on my side. Coming back, sorry for that, again, a little bit on Sweden aspect on the Swedish aspect. First, you have said that the preliminary [indiscernible] short of exploration and does not necessarily reflect your investment need. Id German concern related to the WACC, but also to other elements to the framework. And if [indiscernible], could you provide a little bit more granularity on what kind of elements materially affect the investment returns and what has been proposed at the moment?

And still into this topic, how much capital, which is currently invested, could eventually be redirected towards alternative investments in the end, the framework that is provided to you from Sweden is not supportive enough.

My second question would be related to the extension CapEx topic as well. And the question would be maybe this way, I understand that indeed, you have the sales room based on what is needed in terms of assets and development, et cetera. You just mentioned in your answer in your previous sensors that you have put on call some but needed to the connection, right, et cetera, and the permitting. But maybe could you provide as well what would be a sensitivity to the other regulatory environment being eventually the efficiency that's marking or the future OpEx adjustments. Is it something that needs to be taken into consideration for your potential capital extension? Or is it something that you can disregard at this point in time because you have already enough visibility to go to this extended CapEx on Europe.

Okay. So in Sweden, Other elements that are relevant for the regulatory regime are what we have already touched upon earlier, the web calculation and the WACC inflation how connections are being treated and how the work in progress is being treated. Currently, when we look at what has been proposed, it is the WACC that is the major topic from the other topics, we don't see something as material as the WACC is mainly the WACC. So when it comes to redirection of CapEx, it's too early to assess. And we would only do it if we believe that the final result, which also then could come via court is not satisfactory. And therefore, as we have been successful in the past, and we think that our legal arguments against this very low WACC are good. I don't see that at this point.

So second question, and that's why I also don't think about now redirection of CapEx. The second point is, if I got your question correctly, is the other topics that are not part of the WACC, not also important for our CapEx envelope. And the answer is, of course, clearly, yes, because we have always said it is the full regulatory framework and if we then draw a line below the full regulatory firm, it is what is then actually determining how much we are able to spend value accretively. That's why topics around, we dispatch cost topics about efficiency benchmarking, OpEx adjustment factor, which is a positive, but need to now be make -- made more tangible for us, is clearly relevant topics where we would assume that we are successful with that because we have been the one of the most or the most efficient operator in the past. And we clearly see that the way we are on, we would assume that we be able to continue that. And I think all the topics around we dispatch that it is not meaningful to include that in the efficiency benchmarking because that's not out of -- in the control of the is something, which I wouldn't now want to repeat there. The same applies what we see at a in the last couple of quarters.

And with that, we come to the next question from Peter from Bank of America. So Peter?

Yes. So sorry to kind of labor at this point on the German regulation. But just sort of I properly understand what the messaging is now. Are you basically indicating that this improved -- all this extra year that you're going to get a higher rates in the WACC calculation. That is already giving you enough visibility that you could sort of slightly increased CapEx when you report full year results in March? Or do you still need visibility on the beta to get to that point? And if so, when do you actually expect to get visibility on that beta?

And then just to follow on from that. And I presume what you're sort of suggesting as well is that even if you have that visibility on the beta, you're not going to be able to go the full way on CapEx because you still need visibility on redispatch benchmarking, et cetera. So if you could just sort of clarify kind of a time line and milestones for me, please, was getting a bit lost. And then just a quick one on a completely different topic. You guys issued a press release a few weeks ago, saying that you're looking at future options to use your nuclear sites for data centers. So I was just wondering if you could elaborate at all about what that could look like and how early are you in discussions? And what sort of interest levels are you getting?

So thanks. So what -- very clearly, there's this announcement of net only came in last week as something that we very positively saw and actually very much welcome. And what I said earlier, I can just repeat that, if we were to gradually increase our investments from this positive news flow, we will inform you about that as usual as part of our full year reporting. -- which we now finalize after our midterm planning. The point is we have been seeing that beta, as you have just highlighted, is something which there was a very broad range provided, and we would need to be able to narrow that down. what we very much welcomed as some of you saw in the, gas that gas, the draft back proposal for gas that was this paragraph 102, which very clearly stated that for areas where we see higher investment needs, there will be the inclination to get to the high end of the provided range. And that is something that we will clearly need to be firmed up. to then actually be able to narrow down where the potential outcomes of the overall VA calculation could be. So there was this part and I think...

Sorry, no. Just on that one, when do you think you could get that clarity on the beta?

There is, of course, the topic that there will be the draft consultation for gas provided in Q2 and then the final one in late summer. But of course, there would be opportunity to publicly communicate something on that on the way up until then. As we have been now seeing in this current announcement that we got from BNetzA, which wasn't necessarily linked to any official time table.

Second was on future use of data centers for nuclear side, that's actually very exciting because we have been world-class in nuclear production. And now we are in world-class in nuclear demolition in the velocity that we do that. And therefore, of course, the sites will hopefully become available soon. But maybe then looking at NAVIDIA. This is a very first step. It's an initial review of whether formal nuclear plants could be a suitable location for data center developments. In principle, such concepts may offer potential benefits for all parties involved. This former power plants can provide attractive industrial locations and -- of course, depending on the site we can use the existing infrastructure, particularly the large grid connection. We can use that to support future developments.

We will assess that on a case-by-case basis. But it is -- we are more prudent when it comes to this power land topic, and we rather sort of look to where we have something concrete in our hands before we would oversell on that topic already now.

We move on to the questions from Piotr, from Citi.

Yes. So I have two questions, please. So first one, there was an article in Handers blood talking that municipality utilities in Germany. They have shortfall of EUR 40 billion to EUR 50 billion equity to finance the CapEx needs. So I just wanted to ask if you have a view how this can play out and what is the regulator approach looking at this situation because it's not about or not, you are a big part of the market, but there's all other companies that may struggle. So how do you think this situation can be resolved and where do they get money from.

And the second question I wanted to ask you, when you plan your 2030 guidance, do you see any upside coming from the reviews of your assets or regulatory reviews on the assets in Eastern Europe. So we spend a lot of time on Sweden. We've got a negative -- or let the proposal is not as positive, but then you can go in Poland, Czech, Romania, and so on. Do you see any upside that the higher rates will be viewed into a higher WACC and give you a bit of extra EBITDA.

I think maybe we start off with the last one. So when it comes to Eastern Europe, as we've been highlighting in the past, we see some very attractive regulatory regimes there. We've seen some bonus wack incentivizing extra investments, bolt-on Czech Republic, in Poland, a lot of things, they would say, okay, that is something which could be a good thing to also apply in Germany and Sweden. I think from where we stand at the attractiveness in the Eastern European teams, I wouldn't see now that there is that I would see that there should be something different compared to what we have announced in our last communication than where we brought forward the 2030 plan. I would still see that very much in line. Yes, when it comes to -- the -- they have been seen when it comes to the 100-lot article. We've been seeing this financial challenges in Stowe in the past. This was actually that they also need adequate returns because they also need the adequate returns to attract capital. So German government plans to implement a fund to finance energy transition projects for smaller municipalities. But clearly, our view would be that to keep a level playing field that this needs to be then applicable to all market participants also for ourselves. Yes, I would say here, the main point is seeing all the investment needs the best medicine for that would be to achieve adequate returns via the regulatory framework.

Can I please follow up if there is a case for some consolidation. So like we've seen on the TSO level in Germany that in order to get the financing comps were actually accepting a low premium to RAB and given you and create the synergies on top, you could be interested in some situations where the cell levels really pushed and then forced to accept close to that valuation and then you could create synergies and better value creation than just organically spending? I know historically, you've been talking that you are focusing on organic, but is there a possibility that will play out this way as well?

Look, our focus is pursuing organic growth. We spent EUR 1 for additional RAB, why we want to why would we not invest in organic growth, but rather an inorganic growth and the consolidation, as mentioned in the past, we do not see that as a big lever because of our organic growth and also because of the size that we already have in German distribution. But of course, we are not ruling it out, but we wouldn't be the ones who sort of proactively pursue that. But if we are sort of come to [indiscernible] or some of the struggling station being asked to help out, that would be more something that we would envisage to do. But it is nothing that should be now from the overall capital allocation be big on your agenda.

With that, we move on to Rob from Morgan Stanley.

Just one question, given the amount of ground you've very kindly covered already, and that is just around the allowed return in Germany. I think everyone agrees that the delay, if the look-back period change should lead to a higher allowed WACC, which is great. May we ask could that be -- should we consider that a net positive? Or could it be traded off with lower outperformance when the regulatory package is all said and done?

Yes. So from our perspective, there shouldn't be any link between that now because this postponement is actually a reflection of the market movements that we have now seen, particularly in the last couple of months with bond yields rising significant globally significantly globally. So I wouldn't now see, I think this move of determination to one year later is very clearly within the existing framework -- a framework proposal that the determination that the regulator has set up. So I wouldn't see any conjunction between the two.

And what was the second one?

It was just that. And then we come to the very last question from Bartek, from Bernstein.

I would like to move away from networks and actually focus a little bit on the retail and a couple of components of this issue, I would like to discuss regarding higher power prices, whether you are already seeing and increase in bad debt and whether this could be a headwind to you throughout the winter. And consequently, also, how do you see the behavior of your competition in this higher power price and gas price environment? And if you can also comment on this regarding this bad debt topic on the U.K. government consultation paper on bad debt, they call it, I think that circuit breaker, where you think it could actually help to sort out the bad debt issue in the U.K. or not. So that's number one. Number two, just very quickly, in your comments, you said that Energy Infrastructure Solutions have been impacted by lower hedging prices in the U.K. Maybe you can give us a bit of sensitivity what the impact could be, should you have higher power prices? Or what is the sensitivity to, let's say, GBP 10 per megawatt hour power price on the EIA's EBITDA. Thank you very much.

So looking at bad debt, so our bad debt when we compare Q3 2026 to last 9 months in 2025, that's broadly consistent. At present, we have not observed any material deviations in payment year across the countries where we operate. Of course, you need to bear in mind that, of course, some of the due to the time lag, both from the price cap calculation in the U.K., but also from the way the industry is procuring in Germany. Some of the price increases will actually also only to the full extent, be visible for the customers than next year.

Of course, clearly, we are not fully immune to rising prices if the share of wallet especially for the vulnerable customers is then increasing. Still, I will just reiterate what we have been saying earlier on the U.K. bad debt. We think that our our way of dealing with a bad debt topic is is industry-leading. When we look at the U.K. budget. We think this energy debt circuit breaker, as you call it, is directionally very welcome, But as for us now, too early to provide any direct impact. So this package is aiming to reduce the level of energy debt buildup in the system.

I think what we have been doing in our U.K. [indiscernible] we call that customer health, what we do with our smart pay-as-you-go concept for our U.K. customers. When we look at how we actually make sure that the advanced payments in -- for the U.K. customers are always on the right level think that is, for us -- the most topic is for us what we can have on our own hands.

So, then the next question was regarding the hedge power prices. Clearly, that is a very, very small part of our business. We have some U.K. biomass plants from -- which have been operating for a long while. And also the prices as we don't want to carry commodity prices have been hedging that price levels, at times when the forward curve was lower. And now this benefit, we have been hedging past that is more something where we have elevated price levels in years earlier because we have been hedging at the time when we 2023, '24, we had very high prices. Now that is rolling off and come to more normalized to a more normalized level, but it is a very small and minor part of our business.

Thank you, everyone, for participating and my interest and your questions. If there's anything you would like to discuss with IR later. We're happy to take your calls. With that, we will close the call. Thank you very much, and have a good remaining day. Bye-bye.

Thank you. Bye-bye.

Hello, everyone, and welcome to our H1 2026 earnings call. I'm here with Leo and Nadia and who will present our half year results. As with every occasion, we will leave enough room at the end for your questions. And with that, I hand over to you, Leo. .

Thank you, Iris, a warm welcome to all of you also from my side. Today, again, we have an overall simple message and what you actually used to from E.ON. We keep delivering our operational and financial promises and the momentum and outlook for electrification and infrastructure remains positive. So first, we have strong H1 results. We are fully on track to deliver our full year 2026 guidance. Second, grid capacity is the key enabler for the next phase of the energy transition, rising demand from changing customer behavior, renewables, batteries, data centers, puts especially the distribution grid at the center of the energy transition. A positive for E.ON.

Third, operational excellence is a prerequisite for sustainable growth at scale. Our standardization, digitization and innovation measures enable efficient capital deployment and higher grid utilization which supports an efficient system and therefore, an affordable electrification, again, a positive for us. And fourth, policy direction is shifting from target setting to actual implementation supporting the outlook for our house case.

So on my first as a messages, a few details. H1 results came in strongly with an adjusted EBITDA of EUR 5.4 billion and an adjusted net income of EUR 1.9 billion. CapEx momentum continued with investments substantially exceeding depreciation. And as always, Nadia will walk you through later through the details of our financial performance. As usual, also, let me now point out a few examples of our operational delivery in the last month. In our Energy Networks business, we connected additional 5 gigawatts of renewables to the E.ON grids in the first 6 months of this year in Germany. And we further accelerated the smart meter rollout up 25% over the same period. And by the way, the expansion of renewables is not limited to Germany. We had a similar number outside Germany also connected to our grids.

In our energy retail business, our bidirectional charging product for electric vehicles, which we offer together with BMW, won an energy award in the category innovative energy infrastructure projects. The product marks the first commercial offering for an end customers in Germany to integrate vehicles in a steerable components into the energy market or differently, we turn household flexibility into a scalable grid asset.

On my second message, the rising demand for grid connections from further electrification connection of renewables, batteries and data centers, highlights the progressing need to expand, modernize and reinforce the power distribution grid. It's all, again, it's a clear positive for E.DIS.

Energy security objectives to achieve geopolitical independence from fossil fuels accelerate and broaden the electrification demand and adds to the energy transition objectives and we see that also on the European legislative scale. But whilst the first phase of the energy transition was about building renewable generation, the second phase is about integrating it which means ensuring that every kilowatt hour produced can actually be used, and that is a different task. It's more complex, more decentralized, more digital. And it puts the distribution center the distribution grid at the center of the energy transition.

Let me give you 2 examples which illustrate the continuously growing demand for network connections. And let me start again with battery storage. Requests across our German business for battery storage connections increased by more than 30% in the first half of this year from an already very high base. In this very period alone, we have committed 10 gigawatts of additional battery capacity to be connected to our grids. This lifts our total commitments to 26 gigawatts around 1/4 of Germany's peak load. As a second example, changing customer behaviors also supporting demand for grid infrastructure. German EV registrations are up 50% and heat pumps applications around 35% year-over-year driven by continued geopolitical uncertainty and improving economics of such solutions for our customers.

The economics are becoming increasingly compelling. EVs already offer an advantage in total cost of ownership of around 13 and heat pumps can produce heating cost -- can reduce heating costs by up to 19%. This brings me to my third message. Operational excellence is a prerequisite for sustainable growth and E.ON is all focused on delivering that. Considering the scale of the required infrastructure, investments for electrifications, the necessary grid build-out needs to be executable and efficient to ensure that the energy transition stays affordable. And this -- the task is to manage execution on an industrial scale within a complex system and with efficient use of the capital and the resources. And that requires consistent standardization, process optimization, digitalization and innovative adheres.

We have put our focus exactly on these aspects. We operate in a complex system and the scale of the digital transformation and process optimization is significant. This means continuous optimization and learning remain integral part of the execution process, and let me share a few examples here as well. [ Scars ] grid connection capacity requires a more efficient allocation approach. Some of our regional DSOs are working intensively on a new pilot project. They look for ways how connection capacities can be allocated in a more targeted and system serving approach for connection requests with large power consumption needs. We will communicate in more detail about this approach very soon.

For batteries, our flexible connection agreements enable faster connections while aligning storage operations with actual grid conditions. This is important as batteries need to be connected in a controlled system serving way. Without prioritization, local signals and the consideration of grid constraints, they can also block capacity for years. Therefore, we have developed a pilot concept for a flexible connection agreement together with our partner, [indiscernible] and we are now rolling it out across our German network operators during 2026. What this shows you that innovation can also happen in the way that we actually run our processes and obviously, this needs support also from the regulator and from the legislator.

But we are doing even more. We are also harmonizing and modernizing our network control systems across our German grid companies. System operation is the digital brain of the grid. A standardized and smarter scatter landscape enables us to make faster, more secure, less dependent operations without external providers, and we are better able to scale new functionalities. The first companies will go live on the new system starting January 2027. At the same time, we are making our grids more observable and more controllable. In Germany, we have already exceeded 1.2 million installed intelligent metering systems and we are operating more than 30,000 smart secondary substations. The 1 gives us visibility on the low voltage, the other 1 on the medium voltage.

With this, we are on track to reach 20% controllability in medium voltage by year-end and already have more than 20% observability in the low-voltage area. And why does this matter? Because only if we digitize across all voltage levels and measure real utilization, we can use all available capacity efficiently before building new lines or new substations or new transformers. Our analysis platform, grid lens, which we built makes this tangible. It shows and historic grid utilization and helps us to allocate CapEx where it's really needed. In our energy retail business, our connected assets under management have doubled over the last 6 months, supported by more than 30 live partnerships.

Flex propositions constantly grow across 6 markets, and this expands our installed asset base and creates a foundation for future flexibility services and additional value creation so that also, our customers can benefit from the energy transition.

This brings me to my final message. Policy focus is shifting from setting targets to actual implementations. And this creates a supportive outlook for our growth case, which again is a positive. A recent survey conducted by our E.ON Foundation showed that European societies support the energy transition, but they have clear expectations it also needs to be affordable and reliable and executable not only sustainable. And the recent policy packages on the European and on the national scale are pointing in this direction. On the European level, the EU Grids package puts faster permitting procedures, stronger recognition of grids as critical infrastructure and clearer rules for objective and transparent prioritization of connections requests into the focus. And we think that this is the right approach. Efficient grids are the precondition for further electrification, integration of renewables and security of supply.

The EU electrification action plan published this summer targets a doubling in the share of electricity and final energy consumption from today, 23% to 46% by 2040 even if those targets are not as literal targets, they are also not legislative, they can be seen as a signpost for the desired direction of travel and clearly supportive for our infrastructure business on the electricity side. And the same objectives can be seen in Germany. The German grid package contains provisions for capacity restricted network areas and active grid capacity management instead of the current first come first serve logic. The distribution grid package strengthens the emphasis on acceleration of permitting processes for grid build-out.

The amendment of the renewable energy law targets to move from pure volume growth to a stronger market integration of PV and a shift in support mechanisms towards systems efficiency, cost effectiveness and security of supply. Overall, the objectives and fundamental principles of all these different legislative proposals go in the right direction. The second half of the energy transition needs to be considered in its entirety to stay executable and affordable. We need an efficient and future-proof connection regime and effective steering incentive to avoid unnecessary complexity and cost.

In any case, what is clear is that the distribution grids stay in the center of the second phase of the energy transition, Policy direction reinforces the case for sustained grid investments. And we are now obviously looking forward to see what the final legislation will really contain.

So let me conclude with the key messages you should take away from my introduction. First, E.ON continues to deliver Second, grid capacity is the critical enabler for the energy transition and E.ON is all about grids and customer solutions around that. We continue to standardize digitize and optimize how we execute in our growth program and policy objectives point in the right direction, and we look forward to the final design. So the momentum and the outlook continues to be positive, a successful energy transition requires significantly more network investments and what we now need as a closing remark is obviously an appropriate policy framework and an attractive, predictable and reliable network regulation. We need long-term planning certainty and financial attractiveness to support this further expansion of critical infrastructure. As I said, we stand ready to invest if conditions are sufficiently attractive.

And with that, let me hand over to Nadia. Nadia?

Thank you, Leo, and a warm welcome to all of you from my side as well. Since we last spoke, the volatility in global energy and commodity market has remained high. as geopolitical tensions in the Middle East continued. After the -- against this backdrop, our strong H1 performance once again demonstrates the resilience of our business model in a world of increased geopolitical uncertainty. We are well positioned to capture the long-term structural growth opportunities, particularly through our investments in Power Grids. This resilience enables us to continue with our investments in the energy transition and to deliver on our capital market promises.

With that, let me take you through our financial performance for the first half of 2026. Here are my 4 key messages for today. First, E.ON delivered a strong operational and financial performance in the first half of the year. Adjusted EBITDA reached EUR 5.4 billion, slightly above the prior year level, while adjusted net income amounted to EUR 1.9 billion. With these results, we remain fully on track to deliver our full year guidance. Second, our investment momentum remains firmly intact. Investments continue to materially exceed depreciation with the bulk of our investments allocated to our German Power Networks business.

Third, our balance sheet remains strong. Economic net debt stood at EUR 46.7 billion at the end of H1, showing the normal seasonal pattern of our business. It reflects the annual dividend payment and continued investment activity. partly offset by strong operating cash flow generation in Q2. And finally, we fully confirm our short and midterm guidance, including our dividend policy.

Let us move on to the details of our H1 adjusted EBITDA development, which increased by around EUR 70 million year-over-year to EUR 5.4 billion on group level. Looking at the business segments. In Energy Networks, we delivered a broadly stable earnings performance year-over-year, fully in line with our expectations. Our continued investments in our regulated asset base provided earnings growth across all business regions. We also benefited from positive FX effect in our European markets, particularly in Sweden and Hungary. This was partly offset by the no negative structural effects. These included portfolio changes following the deconsolidation of 1 of our regional utility investments in Germany, NEW as well as the disposal of the Czech gas network.

In addition, we saw higher costs to support the continued expansion of our Networks business. In Energy Infrastructure Solutions, we had strong 19% earnings growth year-over-year mainly driven by the commissioning of new projects for industrial customers and the continued harsh of higher procurement costs from previous years. In Energy Retail, we saw slight earnings decrease compared to the last year. This development was expected and reflects the impact of the deconsolidation of NEW in Germany. In the U.K., the performance of our B2B business has continued to normalize where we have seen positive effects from higher average margins compared to the prior year on fixed price contracts in our B2C business.

Let us now turn to our adjusted net income, which increased by around 5% year-over-year to EUR 1.9 billion. All managed P&L elements below EBITDA developed in line with our expectations. As highlighted during the Q1 call, financing expenses are expected to increase over the course of the year. This is mainly driven by 2 factors: first, higher net debt because of significant investments and second, higher refinancing costs by maturing local pawn bonds. Looking ahead, the current development in adjusted net income is, therefore, expected to normalize over the of 2026. Overall, we remain well on track to achieve our full year adjusted net income guidance for 2026.

Looking at the development of our economic net debt, which increased to EUR 46.7 billion at the end of the quarter, I would like to highlight 4 key points. First, -- the development of economic net debt was fully in line with the typical seasonal pattern. While the dividend payment in May and our ongoing investment increased indeed. These effects were partly offset by strong operating cash flow and a reduction in provisions in Q2. We Second, our investment spending continues to demonstrate disciplined execution. The H1 CapEx will rate stood at around 34%, in line with our expectations. We remain on track to deliver our full year investment guidance of around EUR 8.7 billion. This amount does not include the over transaction. As a reminder, our network investment profile is weighted towards the fourth quarter which typically accounts for around 40% of annual CapEx.

Third, our strong balance sheet remains a key pillar of our investment case with all 3 rating agencies continuing to affirm our comfortable balance sheet position in the last few months. This validates what we have consistently communicated, our investment program is fully funded within our current balance sheet capacity -- and in addition, we continue to see substantial additional headroom to fund further value-accretive growth if the conditions are right. Fourth, this brings me back to the need for an attractive regulatory framework in Germany. The proposed 7-year averaging methodology for determining the RP5 cost of debt for existing assets would not adequately reflect current and expected refinancing costs.

For gas network investments, we expect the first draft of the WACC assumptions in the next days. The resulting cost of debt allowance will probably not cover our financing cost and will include additional low interest years compared to power. However, the financial impact on E.ON should remain limited as depreciation in our Gas Networks business exceeds investment levels, resulting in declining refinancing needs. In addition, most of our regulatory asset base relates to power networks which have grown significantly and are expected to continue expanding.

In any case, it is essential that the regulator sets in an internationally competitive remuneration for power network, including a cost of debt allowance that covers refinancing costs. This is fundamental to attracting the investment needed for the energy transition.

Let me conclude the financial section with 3 key takeaways. First, we once again demonstrated the strength of our business model in a volatile environment, delivering a strong first half of 2026 with adjusted EBITDA and adjusted net income, fully in line with expectations. Second, our investment-backed growth story is grossing well. We continue to invest significantly above depreciation with disciplined execution and a clear focus on value creation. Third, our balance sheet remains strong and provides a strong foundation for our current investment program with additional capacity for further growth.

However, realizing this opportunity hinges on obtaining sufficient certainty that the P5 regulatory parameters in Germany will be strengthened and finalized as expected. Finally, we fully confirm our full year 2026 guidance and our 2030 outlook, including our dividend policy.

And with that, let me hand back to Iris.

Thank you, Nadia. And with that, we will start our Q&A. [Operator Instructions] We will start today with the first question coming from Anna from UBS.

Hopefully, you can hear me 2 questions and 1 clarification, if I may. The first question is on the U.K. retail market. Can you give us some numbers color on the bad debt. I mean this is a real issue in the B2C in the U.K. bad debt can raise to GBP 7 billion and you are growing into that market following the acquisition. Your centric card, they provide the market with bad debt charges, straight receivables and provisions. So I would reappreciate if you could share some numbers around about that in the [indiscernible]. The second question is, can you talk about the direction of travel of the talks with the general regulator., We are waiting for the proposal for Gasworks at some point next month. But any qualitative comment on the talks would be much, much appreciated. And just 1 clarification on the guidance. Nadia is the midpoint of the range of the best point? Or should we look at the top half.

Thank you, Wanda. Okay. So then I have all got -- I think it was 3 questions. Yes. So on the U.K. bad debt. As we have already said in some of our last meetings, the U.K. team and [ Onex ] has been worked hard on what we call account health over the last couple of years where we are firm that we are industry-leading in the U.K. on our bad debt management. So what does that mean account health? So first of all, we looked at debt segmentation activity so that we say we struggling customer groups, and then we sort of offer early interventions to help. Secondly, we also have a very active management on our direct debit payment adequacy, i.e., we look very carefully, which is the right level of the build to avoid build shocks, which is then also, of course, helpful not to run into bad debt issues.

And secondly, we have -- thirdly, we have got a debt management improvement system, which also allows a better foresight on bad debt risk and allows early interventions. So we are not disclosing the exact number but we are confident and we have been seeing from the past couple of years that we are industry-leading in this segment, and it is for us in a sign of our operational excellence in this field, which we, of course, also intending to transfer to the overall customer base once we have lost the transaction.

Second question was with regards to the regulation. So we expect the first draft of the consultation for the gas WACC in the next days. So not that long to go. Of course, that will have -- first of all, you assess that from a gas perspective because we -- as you know, we are operating gas networks business in Germany. But of course, we also look into what that means for the different parts of the WACC from the power side. So when you look at sort of course of debt first, as gas is determined 1 year earlier than power we will have 1 year more of the low interest rate years, i.e. '19 to '25, whereas in power, we will have most likely then 20 to 26. Then on the cost of equity, cost equity is also including 3 very relevant parameters. First of all, the risk free [indiscernible] This has been -- this is using a 5-year averaging period, i.e., for gas that's going to be in 2022 to 2025 where we saw 2021 to 2025 and for electricity that's going to be 2022 to 2026.

So we will also see improvements there. On the market risk premium, we expect to actually get some certain read across from the determination because that's looking back like 100 years and to have 1 year more or less in 100 years for market risk premium shouldn't swing the needle. And on the beta factor, we don't know yet at all how both the peer group or the time series will combine, therefore, we also don't know what kind of across possibilities they're going to be on power. So as you highlighted, that's going to be quite interesting. First of all, for our small gas business, what it means for that? And secondly, not from the nameplate numbers because there, we see quite a bit of differences, but maybe also from the subjects from the publication, we might get some insights the power determination, but we don't know at this point in time.

And it's maybe fair that it's the beginning of the consultation -- and then at the end of the year, beginning of the next year, we will know a little bit more on all the stuff that you just mentioned.

Exactly. As the typical pattern, first consultation and the final determination for the gas WACC is then after we and the whole industry have set in our feedback is going to be at the back end of the year. And then to your third question, as long as as you know from the past, as long as we don't specifically highlight, you could always assume that the mid-vol is the best estimate from the very small guidance range that we gave.

And with that, we come to the questions from Harry.

So first one is on the German government distribution package, which you talked a little bit about in the opening remarks, but I wanted to dig into it a bit more. So I think from the coalition agreement, it focused on 2 things: permitting, which you mentioned, and it also mentioned financing and we're all trying to figure out what that actually means. So I wondered if you could flesh out a bit what do you actually expect from the German government distribution package? And when do you expect that it's likely to be passed? And if the financing elements applies to you? Could that change anything? Or if it applies perhaps to the municipal operators could that create some more opportunities for you to provide services to them if they're able to raise their CapEx?

So just interested in the bigger exploration of that package? And then following on from -- or developing on Wanda's question. The gas draft. Nadia, you mentioned that there might be some elements of it which read across to power. Could you just be a little bit more explicit about what parts of the gas draft you're most focused on to read across to power -- is it the allowed return? Is it statements in there on how they're going to treat OpEx, et cetera? Just to help us a little bit when it's released on what's important for you and what might drive your views on it at proposed power .

Yes. So Harry, I'll take the first question on the distribution package. Since it's actually quite confusing, all these different packages on the European national level, we have, I think, on Page 16 in the pack, we have put you the time line of the different packages so that you have an idea when it might materialize. And so the first message is the German distribution grid package is a second package, which should happen after the German grid package. And actually, we have E.ON we advocate strongly for doing step 1 first and then step 2 rather than discussing everything forever and never getting to a conclusion on anything.

So in the German distribution grid package, you rightly pointed out speed and financing as the 2, let me call it, subtopics. permitting. We think what happens here is that there is an acknowledgment that the speed of permitting needs to be accelerated not only on the transmission system operator level but also on the especially high voltage level, the 110k, which is part of the distribution in actually in most European markets.

And -- if we do not accelerate the high voltage level, we will actually struggle to follow the dynamic development in the energy transition. So just 1 example. The data center boom that we have seen over the last 5 years happens mostly in the 110 kV level. Now if we have a speed of development, which is accelerating year-over-year, and we have an average permit time of 8 years. we're just not going to be able to react fast enough to the needs of our customers. So the fact that now also the high voltage level is being included in making it faster, not only the -- so far, the acceleration was mostly focused on transmission is a clear positive and will enable us to react faster to the needs of our customers.

On the financing side, actually, E.ON has low expectations. We do not want state money. We want a regulation, which is sufficient to attract the private capital, which is clearly out there. And if we can actually make that work, then we are fine. So -- but now there are other players in the market, which have no direct access to capital markets. And for them, there might be financing opportunities provided by the state in whatever structure -- now for us, the only thing is we, as E.ON, we do not want to have a distortion of competition by the state offering like conditionalities, which are better than what we can achieve in the capital markets. But I'm actually confident that this will be the case. And if not, then we will either apply for the money ourselves, which would certainly trigger some reactions or we will see against that, which would also trigger some reactions, so much on the distribution package.

But again, -- we think that is more end of the year, first focus should be on the grid package and for the gas WACC?

Yes. So for the gas WACC that will only include information regarding the gas WACC everything regarding cost allowance, et cetera, we don't assume to give specific insights into that. And then as we tried to allude to. I think we will get from this name -- from the number as such, we will only get a real insight into the MRP. And then for the other elements on the cost of equity, we -- you know there is a different time series for the -- for example, for both cost of debt for existing assets and also for the cost of equity. And on the cost of debt, you know there is this assumption that for power, as we have an increasing amount of CapEx in the whole industry, that there will be a specific weighting that the later years will have higher weightings.

On the gas side, we haven't seen an increased investment activity over the last years. So there, we would rather assume that this is more spread equal over the years, and that would be then also something where you cannot take direct number for cost of debt for existing assets, but there wouldn't be that much read-across opportunities on that.

Okay. Understood. So just to clarify, so it's just the cost, it's the is the returns that are relevant, but you expect some quite significant modifications of power, right?

Yes. I think from logically from the methodology, but also from the different status that both power and gas have in the relevance of the energy transition.

Got it. And sorry to stretch things out. But just a follow up on the grids package. If you did see a significant improvement in the pace of permitting, what would that mean on the ground for you? Do you think that could allow you to get more done to accelerate things, other financial implications of that, if that's passed by the end of the year? .

Yes. So first, we assume that the -- so right now, we have only an intention, and let me call it, what is it, 34-point plan on the table, which needs to be put into a legislative package, which then can enter the parliamentary process, which we expect only for next year. So the current time line would indicate as we have fleshed out in the backup, would indicate that we get this distribution grid package somewhere in 2027. And then obviously, if permitting becomes faster, that has no immediate impact because for the existing permitting processes, you probably need to finish them as you have started them. But for the next projects, it would allow us to allocate less engineering resources. So probably, we would have more engineers to do useful stuff rather than lengthy procedures and it would allow us then to accelerate then in the years afterwards. And then again, if -- especially if combined with an acceptable regulatory package. So that's a bit the time line.

Thank you. And with that, we come to the next question from Alberto from Goldman. .

The first 1 is on guidance. You've done 70% of full year midpoint already in H1. So basically, you're guiding EUR 900 million essentially net income last year, you did EUR 1.1 billion. So because you had some value-neutral timing effects last year, -- would you be able to provide maybe a bridge between H2 2025 and H2 2026 as you see it today because I'm really struggling not to be EUR 2.93 billion, let's say, to see EUR 2.93 billion, given what you just reported right now. So I was trying to see what I'm missing. Or is it you been overly prudent perhaps? And then maybe you give us an update in November again?

So the second question is, again, going to this German distribution grid package, I understood from the economic reform package that the collision put out in the summer that there was going to be also essentially a sort of an infrastructure plan in power distribution. So should we also expect hard CapEx number from this German package by year-end. And if so, when can we assume that you can start embedding that CapEx number in your business plan, even though the parliamentary approval is next year. Does it mean we need to wait for March '28 for you to embed all of this into your business plan? Or can that happen sooner? So do you have enough visibility sooner? .

So I continue with the grid package and then the -- any guidance again to Nadia. So first, on the infrastructure plan, I -- first -- we don't know what the final package will really contain Alberto. I just mentioned a list of 32 points was mentioned what should or maybe -- could potentially be in the distribution grids package. But actually, I do not assume that we will get a detailed infrastructure plan that provides a CapEx number from the legislative package I assume we will get that from the grid development plan, which we do anyway, irrespective of the grid distribution package. So what we are currently doing in 2026 is that we are working on a revision of the net and [indiscernible] plan, the grid development plan. on a German level, which is deriving the development needs, the investment needs of the German grid, and it's a process run by the TSOs and really the large DSOs, especially E.ON.

And it covers actually the high voltage and the extremely high voltage. So the 110 kV upwards, it does not cover medium voltage and low voltage. Now this revision of the process will deliver a number somewhere at the end of 2026 probably that number will be higher than the number of 2024, but only for the 110 kV. It doesn't really say something about the total investment needs of E.ON, again, as I said, because it doesn't cover the lower voltage levels. But in any way, I think the key point is investment needs are going up because requests for grid infrastructure going up and because the grid is already experiencing kind of like being at the limits of what it can do. So for us, I can only see upside coming from that. we will incorporate the high-voltage level developments into our investment plans because we are obliged to do so.

The grid development plan is a legal basis for us for our own investment plans. So we will incorporate that. But on the other side, the real increase of the total investment, that depends on the regulation, and that depends on how we include the other voltage levels. So that's -- so on that side, the grid development package is not as important as you might see the first moment in time. But here comes to connection. Obviously, the 110 kV is the part is what is covered in the grid development plan, and that is covered also by the permitting acceleration that we expect.

So regarding the ANI development. First of all, also on the EBITDA side, we have also in the past, always had a stronger H1 than H2 as a part of the normal seasonal pattern. Then as I have just said to [indiscernible] expecting the midpoint to be the best estimate. You have been seeing that we have been already done some significant part of our refinancing over the course of the year and some of the law maturing low interest rate bonds have matured, and we had to finance that attractive, but at current market price levels. You have seen that when you look at Q1, we had an ANI increase adjusted net income increase quarter-over-quarter of 7%. That has now started to normalize to go down to 5%, and we expect that to continue to be broadly flat then by year-end mainly due to the fact that interest expenses will increase.

And yes, sorry, if you allow me. Am I wrong in understanding flat growth versus last year would be essentially over EUR 1 billion, like EUR 1.1 billion, though, in the second half of net income. So that's why it's -- or if we want to go away from numbers, are we an agreement that sticking to the midpoint if there are no unforeseen events, most likely is very prudent.

I don't go there. I can just reiterate what I have said earlier, i.e. that with what we know now, -- the midpoint is the best estimate.

I tried.

Thank you, Alberto. And with that, we come to the next question, which comes from James Brand from Deutsche Bank. .

I'll stick to 2 questions. I think I try not to make any kind of 2 or 3 parties. The -- just on connections, there's been a lot of discussion around connections today. And obviously, I kind of noted the answer to 1 of the earlier questions, which is -- it's not just about the direct cost of connection because it puts more pressure on the overall system and therefore, you -- and that's close to capacity, and therefore, you need more investment in the overall system. But if we're just literally thinking about the connections CapEx. I was wondering if you could tell us like roughly what proportion of your overall CapEx is directly going into connections. So we can do the kind of obvious times 2 at some point.

But again, noting that there'll be kind of tangential CapEx that will come alongside that? That's the first question. And then there's also been quite a few questions on the gas WACC consultation. And I guess my question for you would be, obviously, you've said that you are looking for kind of a clear signal from the regulator that the outcome of the regulatory review process as a whole is going to be acceptable. And you've kind of set the points that could be got that clear signal, we could step up CapEx earlier. And this is obviously the focal point that people are looking at this year is this consultation on gas. But you've also said at the same time that there isn't necessarily that much read across.

So my question is, is it feasible that there could actually be enough in this gas WACC consultation that would give you the visibility that you feel like you need to increase CapEx? And if that was to come or that means exactly, that would mean a really good beat an equity risk premium or something else? .

Yes, James, on the connections, Indeed, you pointed out correctly that it's not only about the connection. It's also usually the reinforcement behind the connection point that is really the bottleneck. For example, you take data centers, our ability to connect data centers is less driven by the fact whether we can actually put a switch yard in place. The real point is we partially need, for example, additional feed-in points from the transmission grid into the high-voltage grids to then provide power to the data center. And so what needs to happen beyond the connection is then a reinforcement of the 110 kV then a reinforcement of the connection between the 110 kV and the TSO. So it's absolutely right. As you pointed out, that like there is more to it.

Now just a few additional numbers. When we're looking at connections, only at connections, grid connections in Germany, we are seeing that they're continuing on the high level that we have already seen last year. We had connections around 200,000 this year in Germany of new assets, which is roughly half of what we had last year. But if you look at the connection requests, we actually see an increase in connection request, which points to a higher need going forward. Now we do not know what the percentage is of the pure cost -- the cost percentages of the pure connection versus the the reinforcement. And let me just explain to you with an example why that is the case. If we, for example, look at our Northern German grid in [indiscernible], between the Baltic sea in the Northern Sea, we are roughly doubling all the transforming all the transformation stations.

It's clear that all these transformation stations, this doubling is part of that is reinforcement and part of that is, at the same time, providing the ability for somebody to connect. Now if you ask me how much of the doubling now goes to connection and because I really don't know. And we do not account for it. However, if we have now more customers coming in and we are obliged to connect them then actually the direct connection cost would go up, but we would keep the CapEx number stable and then they will do push reinforcement out. So it's not that if connection goes up by 20% the respective cost item goes up and our investment envelope goes up. We keep our investment envelope constant in the planning period and then we reshuffled a little bit. We would then, for example, do probably less modernization to make sure that we still can do the capacity expansion. Obviously, we can do that only for a limited period of time.

And if you have sort of [ Watford park, ] you could say, it built out, including new connection is approximately 2/3 of the CapEx envelope and approximately 1/3 is replacing and risk mitigation in our client envelope. Okay. yes, gas WACC. So when you look at the gas back, you summarized correctly that we -- from the nominal numbers, we just have an immediate -- we expect immediate read across only from the market with premium because all other numbers, we might get a read across how the methodology has been utilized. But from the number, we don't expect a direct read of course. We also don't -- but we don't know how much read across is in the overall publication, i.e. there might be the opportunity that there are more hints on the methodology, also how the electricity grid charges will be computed.

As you remember, when you look back at the end of last year, we were a bit disappointed and we got less clarity on how exactly the different elements are being computed and there might be an opportunity to get some more out of that. And to summarize, and that's, I guess, what we always said, when we increase our CapEx envelope is very much looking at the overall scheme and is very much path-dependent here. First of all, at this point, we still have this 1 negative with a 7-year look-back period. And first, then it needs to be overcompensated by some more positive elements in order for us to get security black and white, that there is going to be a positive regulatory scheme in place.

It's like the overall. And of course, before we will, as you know, very toughly analyze the gas publication, which is due in the next few days. And then we will take our decisions from there. SP1

Thank you, James. With that, we come to the next question from Louis from ODDO.

Yes. thank you for the presentation and taking my question. Maybe the first 1 regarding the grid connection again. Request increased by approximately 20% year-on-year. What proportion of this requested capacity do you really expect to result in actual completed connection? And does the trend is in line with what you expected, for instance, last year? And maybe in parallel to this question, to what extent the flexible connection agreement can increase the utilization of existing group capacity and can you quantify the network investment that could be deferred as a result of the flexible connection agreement?

My second question would be more straightforward on Energy Infrastructure Solutions. So you delivered 19% EBITDA growth how much came from structure and investment led growth and how much could be seen as a temporary weather and the procurement effect .

On grid connection -- so let me rephrase the grid connection requests that we are receiving. We are assuming that a large share of that will never materialize either because it was speculated from the beginning. And since we -- and if we can't provide the connection then the whole project just disappears. And therefore, so if I see, for example, battery request of several hundred gigawatts, it's clear that we are not going to build several hundred gigawatts of capacity in Germany because there will be no economic case for that. For us, the problem is that we need to process all those requests anyway, knowing that, let me say, 80% of that will just disappear. And maybe 80% is a number to take.

So if we take, for example, data centers, -- on data centers, we have a request of around 80%. We have given a grid connection consent of 13 gigawatt of that which is then roughly 15%, and we are currently -- and we currently have connected 1 to 2 gigawatts. So that's the numbers, 80%, 15%, 1% to 2%. If you look at batteries, we have requests over 700 gigawatts. We have given we have given consent to connect to 26 gigawatts, and we have connected 2 gigawatts, which we are, by the way, the market leader in distribution, clearly in Germany. So that gives you a realistic expectations.

On the FCA, I personally expect that all batteries that will be connected in the future will need to be part of a flexible connection agreement, especially if the batteries do not pay grid fees, which is the current regulation, they should also not burden the capacity of the grid because otherwise, why would you exempt them from grid fees. And flexible connection agreements in the end do exactly that they ask the battery operators to behave in a way that they do not increase the load on the grid, but they actually really improve the situation in the grid. We are not trying to prevent batteries from being connected actually the FCAs will allow more batteries to be connected than without an FCA and take an example, if you have a 100-megawatt battery which has no FCA, it actually needs 200 megawatts of grid capacity because it can charge 100 and it can feed in and pull 100 mega.

So it needs 200 megawatts of grid capacity. Whilst if you have an FCA, it needs 0 because then it's grid neutral. And so obviously, grid connection will improve by the FCAs, I do not -- I cannot quantify how much CapEx that will actually then prevent that depends on not, but it's exact, but it's the right thing to do. And maybe 1 additional point flexible connection agreements will become a topic also for non batteries in the future if we see the current development because clearly, otherwise, the ability to connect fast will be limited. So I think this is a key topic. E.ON is trying to be a playmaker here by putting standards out into the market, which then we can improve jointly together with other market participants. And I think that's for the benefit of all.

Yes. No, I will take the [ ICE ] question. So this time shift in the procurement input cost effect, that's approximately that's approximately EUR 20 million, give or take. That is not a one-off effect, but it was just that in the previous years, we were not yet allowed to lift sort of pass-through, but the past was a bit delayed. So that is not a one-off, but an operational effect. But just compared to the baseline of last year, this shows now a more normalized earnings, which wasn't possible already in last year. And second topic, so the remainder is then approximately on organic growth, new projects coming online.

Thank you. And with that, we have the question from Ahmed from Jefferies.

Yes. I have 2 questions. Just on the gas WACC or maybe ultimately getting to a point where you have an overall understanding of the power regulation. I mean it seems like there will be some read across, but then there are elements like the cost of debt approach, potentially elements of the cost of equity such as equity, beta, et cetera, that would have limited read across. And obviously, there's sort of the benchmarking aspect that you have mentioned in the past. Firstly, am I right in sort of characterizing that these are some of the key parameters were still more visibility might be required post the gas WACC update? And do you expect any sort of update on these 3 key parameters in the next 6 months or so? So that's my first question.

And then secondly, just interested in understanding how the current weather situation that we are seeing in parts of your sort of portfolio in the U.K., the heatwave, how how -- what's the -- how should we think about the economic impact of that on the business, if any?

Yes, maybe on let me start on the gas WACC I think we have set out the time lines when we expect more official news to come. So we will have the gas WACC draft consultation now, then fund the termination by the end of the year. And the next year, that's tying all moved for 1 year for power. So we expect the power draft determination also sometime around mid of the year and then the final determination at the end of the year. And then the final conclusion on the power side when it comes to cost of loans when it comes to efficiency factors when it comes OpEx adjustment factors and all the respective things that are included in the benchmarking we expect for 2028 for power. But there's no change. I think we have clearly set out the guidelines and some of our -- the guidance or the time lines in all of our IR materials. So -- and basically, I can confirm that the elements that you've highlighted are some of the very relevant topics ex gen factor, et cetera, the typical factors that we have been highlighting also in the IR material, but you have summarized it well. .

And on the weather, obviously, quite an interesting situation right now. Maybe I'll focus a little bit on our Southeastern European markets in Hungary and Romania, where the situation is the most challenging 1 right now regarding the weather, Why? Because those markets are impacted by the heatwave and actually less connected to the overall European grid, especially when you look at Hungary, you can clearly see it. So the impact for us is limited there. Our key business is, first, obviously, distribution. Now as the distribution operators, we are involved into the task forces that the governments have set up to make sure that this situation stays stable so far. It has been possible to counteract the effect of less production, for example, by [indiscernible] and by Parks with respective demand reduction on the industrial side, voluntary reduction.

So we have not been forced to make unvoluntary reductions, and we have been able to continue to provide power to all our customers. And so far, the situation has softened a little bit, but it will remain tense. The solution for that is better integration of Southeastern Europe into the European market, which is something that those countries are asking for anyway because they are looking at elevated price levels. We do not see any significant financial impacts on networks. And on the retail U.K. on weather at this point, we also see no material impact. So in that sense, it's more an operational challenge for us where we need to be part of the solution but it's not that we expect any financial impact from that.

Thank you. And with that, we come to the last question from Piotr from Citi before we then will close the call. .

I have 2 questions, please. So first, I wanted to ask Leo about your expectations about how quickly this battery grid connection queue will translate into the real assets on ground and what kind of implications? At what point do you think these batteries could affect the power price formation and meaningful you would, I don't know, change your procurement strategy or reflected somehow. Just when -- how quickly this 26 gigawatt, which you gave essentially gets connected and if -- and then how much percentage really gets connected?

And second, I wanted to ask you, there's a new renewable law in Germany, which, as I understand, gives some kind of a locational factors so that we don't place renewable assets in congested areas. Does it matter for E.ON network? I mean you have a majority of renewable assets connected. So I guess, congestion typically will happen in your network. So would that lower overall kind of request for renewable connection in our grid .

Two new and great questions at the end. So a pleasure to take them. First, on the batteries. Here, I expect really at least -- I do not expect all the projects that -- where we have given the content to connect to materialize. But I expect that we will see some dynamic development because the grid exemption that I mentioned, the grid fee exemption that I mentioned for batteries is tied to those projects being finished over the next 2 years. So in that sense, there is a clock ticking. And so the project developers have a high incentive to either be very fast or basically, they can leave the playground. In that sense, I would expect significant capacities to be added and they will have an impact on price formation. We can already see that they have a local impact. If you have a battery in a local grid area, for example, the peak capacity that you need to pull from the TSO goes down which has an impact on the DSO fees as well.

So -- and obviously, if we now add, let's say, 15 gigawatts, which I could easily see in the next 2 years, then 15 gigawatts would clearly have an implication if not for the total base price formation, for sure on the shape and they would actually shift renewables production. So batteries will have an impact in the very short term. And also we, as E.ON are developing partially large-scale grid projects to make sure that we can use them to optimize our hedging for our customer portfolio. So in that sense, I would say -- they're going to come in pretty fast also compared to data centers, for example, and they're going to be significant, and they're going to have impact on the ability to provide products to customers.

On the renewables, 1 small correction, the locational factor for renewables with the congested area is actually part of the grids package already. And it's not part of the Renewable Energy Act revision that's underway, but it doesn't really matter. For us, it has an impact. I mean, obviously, not a financial impact because it has no direct impact because we are not a renewable developer as you well know. But it has an impact. It has no financial impact for us. If we need to connect renewables in the wrong place, let me put it this way. What it does, it has no direct impact on us but it will increase the system cost because it will lead to additional congestion. This congestion needs to be charged to the customers, and that's the indirect impact that we have. We then need to charge unnecessary cost to our customers.

And then we will have built out obligations afterwards, which are also unnecessary because in the first place we shouldn't have done in there. So I think if we get the location signals, and if we get the change in the policy via the grids package, it will actually decrease the build for our customers. and it will make sure that we allocate the CapEx where it makes most sense, which in the long term will lead to lower cost for everybody. Now that's in our interest. It's in the interest of our customers. It's not necessarily in the interest of the renewables developers. So there will be an interesting political debate. And the lobbying is very strong. to make that as ineffective as possible. If it's completely ineffective, like, as I said, then we have the indirect impacts that I just mentioned. But I hope that it will actually be positive because in the long run, it's just the right thing. .

If I can have just a very quick follow-up on this last point. So I understand if we have a location in our signal, there will be less of a demand in your congested areas. But do I understand it correct that it doesn't matter for your EUR 5 billion to EUR 10 billion fuel checks your capital deployment because you have so much demand for different grid connections that you would do some other work other than in renewables? .

Rather than connecting assets that afterwards would be curtailed, we would connect assets that afterwards produce for customers. But we would not have any reduction anywhere.

And with these last words, we close the call. Thank you, everyone, for participating and your interest. And if there are any further follow-up questions, please reach out to the IR team, happy to take those questions. With that, I close the call. Thank you very much, everyone, and have a great day. Bye-bye.

Thank you.

Bye-bye.

Good morning, ladies and gentlemen. A warm welcome to our virtual press conference for the first half year of E.ON SE. I'm delighted to welcome you virtually the representatives of the media who are joining us via Teams and our viewers on the live stream, our CEO, Leonhard Birnbaum, is with us; and Nadia Jakobi, our CFO. A warm welcome to both of you. In the 30 minutes ahead of us, we will give you an overview of the business development of E.ON in the first 6 months. Afterwards, we will have the opportunity to ask questions to Mr. Birnbaum and Nadia Jakobi.

Members of the press, ladies and gentlemen, good morning from me. I would like to start with a topic that's on many people's minds right now, the never-ending war in Ukraine and the still unresolved conflict in the Middle East. Both have handed dramatically brought energy into the spotlight again. The good news is, despite all the bad news in Europe, companies and Europe -- European governments and operators of critical infrastructure are much more prepared than ever. They have learned from the energy crisis in 2022.

But it's also clear that Europe and Germany, in particular, need to further strengthen their energy supply. The volatility tied to the navigability of the Meuse and the limited availability of gas there pose a threat to energy supply. That's why the focus of the second half of the energy transition needs to be on making energy not only sustainable, but also keeping it affordable and ensuring it reaches the customers reliably. And that brings me to E.ON's business. E.ON again, delivered financially in the first half of 2026. Adjusted group EBITDA of EUR 5.4 billion and adjusted group net income of EUR 1.9 billion puts us fully on track to meet our 2026 guidance.

The tempo on our investments remained high as well. We invested EUR 3 billion in the first 6 months alone in networks, in customer solutions and in the future of an advanced European energy system. The details on all of these numbers will be presented to you by Nadia in a moment. It is our employees that make these results possible. They move the energy transition forward day after day. They have delivered operationally. And for that, I would like to thank them.

I also want to acknowledge that many of them do this in environments that involve inherent risks. So electricity and infrastructure that is dangerous. And that is precisely where it matters that our employees return home safe and sound every day. And I'm therefore, deeply saddened to share with you that 2 fatal workplace accidents occurred last week, one in Germany and one in Turkey.

My deepest sympathies go out to the families and the loved ones of the deceased employees. and also to their colleagues. Our goal remains clear. That is totally unacceptable. Our vision is Vision Zero. We don't want any workplace accidents. We want to make sure that all of our employees return home safe and sound every day.

Today, the energy transition can't just focus on debating policy targets and expanding renewables. We need a systemic shift. And that's exactly where things stand right now. In Germany, we added more than 130,000 grid connections in Germany and more than 5 gigawatts of additional renewables capacity were connected to our networks. That equals to more than 1,000 state-of-the-art turbines.

E.ON now integrates and administers more renewable capacity than all other network operators in Germany put together. Large-scale battery storage continues to boom as well. Beyond battery systems already connected, E.ON has issued approvals for more than 26 gigawatts of new capacity. To put this in perspective, that's more than 1/4 of Germany's entire peak load. Requests for data center connections are growing at a similar rapid pace. We've already approved more than 13 gigawatt of new connections. So we're living in a completely different world today.

In the past, the energy systems, as you know, was a one-way street from big power plants to consumers. Today, we have smart homes, electric mobility and over half of Germany's electricity comes from renewables. These millions of assets don't just need to be securely integrated and controlled, but also build. Also, the current scale of new batteries and data center connections wouldn't have been imaginable just a few years ago.

In this challenging and highly complex environment, E.ON ensures that the system stays stable and energy reliably reaches our customers. And we're not just enabling the energy transition, but also the next steps in digitization and artificial intelligence. We are Germany's leading network operator in rolling out smart meters, and we're doing everything we can to provide new connections even faster, more efficiently and smarter while innovations and new business solutions are enabling us to make the best possible use of limited grid capacity. I'll illustrate this with 3 examples.

First, our introduction of flexible connection agreement, so-called FCAs provides a key tool for better integrating battery storage systems into our networks. That enables us to connect these systems faster while making better use of existing grid capacities. Together with our partner, Eco Stor, we are testing a uniform standard for all E.ON network operators.

Second, many of our new approaches enable us to continue to optimize how we approve and install network connections swiftly and efficiently. These include projects by our regional subsidiaries such as the feed-in sockets, which thanks to its genuine added value is now included in the grid package under the name Einzeleinspeisernetz. Some of our regional companies are also working on a new pilot plan for even more efficiently prioritizing grid capacity for connection requests with high load requirements. More details about this will be shared over the coming days.

Third, our digital twin technology from Envelio enables us to digitally model energy flows and thus make grid planning more precise, identify capacity faster and provide connections more efficiently. And this process recently received the Reuters Energy Industry Award 26 in New York. All of this demonstrates that E.ON isn't just expanding the power grid, which is currently reaching its limits in Germany, we are also making sure new energy works better swiftly, efficiently and digitally. That is exactly what we're doing with our solutions in the retail business as well.

With the announced acquisitions of the energy provider, OVO in the U.K., we are strengthening our position in one of our most important markets and offering our customers an even broader portfolio of solutions. We are also helping our business customers reduce their energy costs and make their energy supply more autonomous even in tough economic times. And in Germany, we're offering a combined package for solar and battery for larger facilities, which enables companies to meet more of their energy needs flexibly, cost efficiently and autonomously.

We're working to create another source of flexibility as part of Germany's government-funded BDL NEXT project. This project brings us together with industry and other network operators to reach and research institutes to test how to scale up bidirectional charging. In our Energy Infrastructure Solutions business, we installed highly efficient energy recovery system at an Imerys production facility in Belgium. This system peaks output is 29 megawatts, which is enough to power the entire site and surplus electricity is fed into the grid and will meet the needs of around 40,000 households.

Projects like these demonstrate that E.ON is shaping the second half of the energy transition. We're enabling our customers to tap into the potential of electrification. And that's why we welcome the EU's massive push for electrification. Increased electrification of heating, transport and industrial processes will correspondingly reduce Europe's dependence on fossil fuel imports. Right now, though, Europe still needs gas, especially for heating. Germany's gas storage facilities are currently 49% full, which is significantly lower than the EU average.

In a tense geopolitical environment, Germany can't rely on neighboring countries and LNG supplies. It needs to take actions just to ensure that the more than 20 million households that still rely on natural gas have a secure supply this winter. Volatility and geopolitically induced price swings on commodity trading markets are here to stay. We are doing everything we can to cushion our customers from price spikes on wholesale markets. Our long-term procurement strategy will enable us to keep power and gas prices in our largest market, Germany, stable this year for all existing customers and those on default supply contracts.

And in our second largest retail market, the United Kingdom, we're offering customers the Pledge tariff, which guarantees savings relative to the government set-price cap. All of this underscores E.ON's commitment to being a reliable partner for our customers also in turbulent times. We back up this commitment with our investment program. E.ON plans to invest EUR 48 billion between 2026 and 2030, which is about -- of which about EUR 40 billion is allocated to our Energy Networks business.

This is one of Europe's largest private infrastructure programs, contributing to value creation and employment in economically challenging times. It's also essential for the success of the energy transition and the transformation of the energy system. Today, there's more competition for capital than ever. A key factor for future investments is, therefore, the upcoming determination of Germany's regulatory cost of capital rates for power and gas networks, which must adequately reflect the real financing costs. The task is to get the whole package right.

Full planning certainty for the next regulatory package is only achieved once all of the parameters are finalized. These parameters include the rate on return, the efficiency benchmark and the OpEx adjustment factor. The totality of these regulations will determine whether amid global competition, Germany will be an attractive market for private infrastructure capital over the long term. The message is simple. Anyone who expects significant private investment in networks in the future must now establish the regulatory framework to make that possible. That's why we have unambiguously made our announced investments in Germany contingent on economically viable regulation.

The sooner we get comprehensive clarity on the parameters for the fifth regulatory period for power, the sooner we can sharpen our investment planning for 2029 onwards. The first half of the energy transition was about expanding renewables. The second half is primarily about network infrastructure system integration and efficiency. The policy framework for the energy transition, therefore, needs to be realigned. This applies, first and foremost, at the European level. We fundamentally welcome the direction of the planned EU grids package. It recognizes networks as backbone of the energy transition and addresses key challenging challenges in planning, financing and permitting.

There also needs to be greater legal certainty for faster network connections as well. And where grid capacity is scarce, there needs to be provisions for transparent and legally binding prioritization mechanisms. Equally important are visible achievements in reducing bureaucracy for larger companies like E.ON.

If Europe wants the energy transition to progress at maximum speed, it needs to set the lowest possible bureaucratic hurdles, reporting requirements, documentation obligations and regulatory rules like the Act on Corporate Due Diligence Obligation in supply chains or the Pay Transparency Directive for the EU taxonomy, and I could give much more examples, can't allow to stand in the way of transformation, especially when these rules offer actually little benefit and do not help us in our day-to-day work at all.

And Germany needs to be faster, too. Together with the energy industry, I'd have preferred for progress on the core issues around network connections to be much faster. After all, the Federal Ministry of Economic Affairs and Energy's grid package has been around since the start of the year and contains specific and solid proposals to enhance system cost efficiency. That's why the federal government finally agreed on the grid's package in late July, a package aimed at reducing Germany's consumers' exposure to high energy system costs, which was an important step.

The key is to shift away from the first-come first-served approach to legally binding prioritization of bottlenecks, not the one who puts the application in first gets first served, but only those who really want to connect to the system. Equally important are locational signals to propel the renewables expansion. System costs currently remain high because generating capacity is being built in regions that already have grid bottlenecks.

Going forward, Germany needs effective signals to counteract this. The redispatch proviso is a sustainable tool for this, but its modalities can't be so relaxed that it becomes a mere paper tiger. Consequently, the grid's package needs to be adjusted and passed by parliament without delay, and it too needs to be as simple and straightforward as possible and also actually reduce system costs. We don't need even more well-intentioned detailed regulations and exceptions that only make things more complex and expensive.

In July, the Coalition Committee announced a distribution grids package as well. This again underscores the urgency of faster network connections, especially for industry. It also highlighted a key factor for increasing speed, faster permitting processes. This will require less bureaucracy and again, faster legal review. Germany can move fast. We saw that with the energy expansion grid. We -- rapid expansion is now needed as a new normal standards. The distribution grid package is, therefore, generally the step in the right direction, but it's only the second step.

The grids package needs to get across the finishing line first because it's not ambitions and aspirations that count for the second half of the energy system, but what happens on the field is what counts. And that's precisely where E.ON comes in. That's where precisely we want to use our role as playmaker to shape the game. And that's precisely where again, we will be continuing. And with that, I hand over to Nadia.

Thank you, Leo. A warm welcome from me, too, ladies and gentlemen. Leo just outlined where we are standing in the energy transition and how we continue to deliver operationally. The demand for grid connections is rising. We are encountering more storage systems, more data centers and more electrical applications. In short, the energy system is becoming bigger, more complex and more digital. I would now like to turn to our financial figures and discuss how earnings and investments developed across our business divisions.

The top line message is that E.ON had a successful first half of 2026. We increased our earnings year-over-year. We continue to make massive investments, and we're reaffirming our full year guidance. This is not a given in the current environment. Economic and geopolitical conditions remain challenging. The ongoing conflict in the Middle East continues to cause volatility in wholesale electricity markets. At the same time, we see a very clear structural trend in our markets. Demand for energy infrastructure continues to grow.

Customers want to electrify. Industrial enterprises are looking for solutions for a more efficient and climate-friendly energy supply and the grids are a critical enabler of this development. E.ON is well positioned to play exactly this role. This is also reflected in our earnings figures. In the first half of 2026, adjusted group EBITDA increased by 1% to EUR 5.4 billion, which was in line with our expectations. Adjusted group net income rose by 5% to EUR 1.9 billion.

In the first 6 months -- after the first 6 months, we are, therefore, fully on track to achieve our full year targets. For 2026, we continue to expect adjusted group EBITDA in the range of EUR 9.4 billion to EUR 9.6 billion and adjusted group net income of EUR 2.7 billion to EUR 2.9 billion. This corresponds to adjusted earnings per share of EUR 1.03 to EUR 1.11.

Let me now turn to our individual business divisions. Starting with Energy Networks, adjusted EBITDA increased slightly year-over-year to more than EUR 3.8 billion. The business continued to benefit from substantial investments in the expansion and modernization of energy networks. Positive contributions came both from Germany and other European markets, especially in Central and Southeastern Europe. In Germany, the further expansion of our smart meter business also supported earnings performance, whereas expenditures for sustainable growth measures as well as the deconsolidation of the NEW Group had an adverse effect. Next is Energy Infrastructure Solutions. The business division delivered a strong performance in the first half of the year. Adjusted EBITDA increased by 19% year-over-year to around EUR 390 million. The main driver was the industrial customer business in Germany, where new growth projects were brought into operation. In addition, the pass-through of higher procurement costs from prior years had a positive effect on earnings.

I will now turn to Energy Retail. Energy Retail also had a successful first half of the year. As expected, adjusted EBITDA of EUR 1.2 billion was slightly below the prior year level. This development mainly reflects structural effects in Germany, including the deconsolidation of the NEW Group. In contrast, process optimizations in customer management processes had a positive impact. In the United Kingdom, positive effects in the residential customer business and in connection with energy efficiency measures more than offset the earnings declines resulting from the continued roll-off of legacy contracts with industrial and commercial customers.

Let me now turn to our investments. In the first half of 2026, we invested a total of EUR 3 billion, and we stand by our plan to invest a total of about EUR 8.7 billion for the full year. In Energy Networks, investments amounted to roughly EUR 2.3 billion in the first 6 months of the year. They were primarily -- they went primarily towards new grid connections and the expansion of network infrastructure. This figure is lower than in the prior year period, and the decline is mainly attributable to Germany, where weather conditions caused delays in the first quarter and some projects were temporarily postponed. These investments will be caught up over the course of the year.

At the same time, Energy Networks increased its investments in the first 6 months in several European countries, especially in the Czech Republic, Poland and Hungary. This underlines that investment needs are not limited to a single market. They arise across Europe. In Energy Infrastructure Solutions, we invested about EUR 360 million, slightly above the prior year level. These investments focused on energy infrastructure for industrial customers, cities and municipalities, supporting projects that make energy supply more efficient, climate-friendly and resilient.

In Energy Retail, investments amounted to around EUR 240 million, also slightly exceeding the prior year level. They went primarily towards the expansion of charging infrastructure across Europe and digitalization. All these investments advance the energy transition in specific ways. We are enabling new grid connections, increasing grid capacity, digitalizing our infrastructure and developing solutions that unlock additional flexibility for the energy system.

At the same time, we are investing in charging infrastructure and new customer solutions. This not only helps to integrate renewables more effectively into the system, it also supports further growth driven by the increasing electrification of transport, heating and industry and enables our customers to actively participate in and benefit from the energy transition. To continue to invest at a scale, we need a reliable and appropriate framework. Long-term infrastructure investments require planning certainty where regulation supports investment and innovation, we can continue the expansion of energy infrastructure and meet the growing demand for electrification.

I'll conclude with a summary. First, E.ON delivered in the first half of 2026. Adjusted group EBITDA and adjusted group net income both increased year-over-year, and our business divisions are performing as planned. Second, we continue to invest in the infrastructure needed for the second half of the energy transition provided that the regulatory framework is right. And third, we confirm our guidance for the full year of 2026 as well as our outlook through 2030.

Overall, we remain firmly on track operationally and financially. Demand for energy infrastructure continues to grow across Europe. And through our investments, we are creating the foundation needed to support this growth while advancing the energy transition. Thank you.

[Operator Instructions] First questions have already come in. It would be nice if you could show your camera if you're showing -- if you do not want to be seen in the live chat, then switch your camera. But as mentioned, we would be delighted to see you.

Well, the first on our list of journalists, [indiscernible] from Handelsblatt. I've got 2 questions. One, about the grid package, which you just mentioned, Mr. Birnbaum. You said that you would wish for some improvements to be made, maybe the redispatch proviso. Maybe you can explain exactly what you do not like at the moment. I mean there are requests from other parties as well for the network operators to do more as part of this package. What do you have to say to that?

And secondly, you also mentioned that the next regulatory period, your investment is under the proviso that conditions are changed. So what amount is subject to that proviso? And why is it so important for the conditions to be improved? I mean there's much criticism of the network operators. And apparently, you are coping with the current conditions pretty well. And yes, they are not investors as with TenneT. So what improvements are you looking for, for you to be able to continue to invest?

Well, first of all, the grid package. What is important here is, as I said in my speech, we need a locational signal. We need to make sure that the addition happens in the grid where it just doesn't drive up system costs, but where the projects actually offer a real benefit for the customers. And this redispatch proviso is the instrument of choice here. It was selected by the legislator, by the ministry. And we would now wish for this not to be watered down until the end. It turns out not to be an effective instrument after all.

And when I talk about improvements, then, well, people are trying to bring in all sorts of exceptions and to water down the effect, and we need to counteract that. We would wish an even stronger signal than envisaged in the draft now, and we would wish for a rule that we can administer later on because let me say that the entire complexity of regulation is always to be shouldered by the network operator. Most of the players in the energy transition don't have to do that or are not burdened with that. And when it comes to assuming responsibility, we are assuming responsibilities already. We have to ensure the connections regardless of where they are. We have to ensure system integration. We have to administer the complexity, which is enhanced all the time.

Let me give you an example. Our E.ON Grid Solutions business that deal with all the measured values also for the feed-in in 2020 had 5 million measured values. Now we have 27 billion measured values and the rollout of the smart meters has only just begun. So we are meeting our obligations. What we need? We need to invest massively, and we can only attract the capital we need if we can show returns on the capital markets that are competitive by international comparison. And for that, we need improvement.

We never complained about regulatory period 4. We just said the fifth regular period has to afford the same opportunities for us and has to allow us to earn money with the additional investment. If we have to invest more and more to not earn more than in the end, then the question is why should we invest in the first place? And the last point without private capital, the energy transition cannot be accomplished. We need to attract private capital. And also the capital that invested in Amprion is expecting higher returns for the fifth regulatory period or at least the same profitability we have at the moment.

Well, let me add to that. The current proposals are actually worsening what we have seen in the fourth regulatory period. For example, if in 2025 or 2026, we have invested, we are currently getting for this new investment, the mark-to-market whereas with the investments in or the same investments in 2026 will give us in 2027 only the borrowed capital financing costs over the last 7 years, which is the low interest rate phase from the beginning of the decade. They are factored in as well.

So the improvements we are expecting are compared to the current proposals because they are much lower than the better returns in the fourth regular period. For example, the stricter benchmark, the redispatch measures, which are now a factored into the conditions.

Can you still say how much money is under the proviso? How much of the -- your investment is under the proviso?

No, we don't want to speculate about that. We -- it will depend on how the energy package pans out in the end.

But haven't you communicated that last year already?

No. Last year, we communicate the potential upside we see if there is appropriate regulation, but that continues to apply.

Okay. Two additional questions were, okay, I think you posted 6 questions now. We can do this bilaterally if you want to. There's a long list of other questions. So we can come back to that later on after today's event. Next, Mr. Brendan from Bloomberg. Ms. Brendan, please.

I've got 2 questions. One is, do you see any impact of the drought and the heat we're seeing at the moment on grids? Or are you only indirectly affected? And what is your take on the current progress of electrification in Germany? More and more people are interested in e-mobility because refueling petrol cars has become so expensive. But what's the status concerning gas heating and also in industry?

Let me start with the second part of your question. We're seeing a considerable rise in e-mobility or cars being registered by some 50%, and we are seeing a considerable increase in the installation of heat pumps. The speculation that the flexibility in the system will lead to a boom in gas-fired heating cannot be confirmed by us. So electrification in the private customer segment is developing positively in industry, well, they are still kind of reserved at the moment, and that compensates the rise.

Therefore, in total, we are seeing a low but slight increase in power demand. The heat is hitting us in the customers business where we get extreme volatile wholesale prices, which we need to pass on to our customers. So that need to be managed. And it's hitting us in the network business as well, particularly in countries like Hungary and Romania, where we have investments and we are involved in managing the scarcity.

But operationally, it's not hitting us direct. I mean, we do not have to, well, stop parts of the system. The stress on the system remains the same. In principle, we have so far managed to keep the implications under control, the effects under control and supply to the customers will continue to be ensured in all probability, particularly in markets where things are critical. I've already mentioned Southeastern Europe.

Then next, Christoph Steitz from Reuters.

Hello from Frankfurt. I've got 2 questions as well. I'd like to come back to the heat topic. You said that the stress on the networks remains the same, but still when it comes to this particular topic, there are a number of stress factors that have an impact on the network. Maybe you can explain why in network management, it doesn't seem to make a difference? I think it's placing more demand on the management of network assets. And in Europe, we have a highly integrated network, also connections to other countries, and we're seeing what's happening in France at the moment. Maybe you can provide a little more clarity there for us why you are not affected that much at the moment?

And my second question is, can you explain -- once again, I mean, in the first half of this year, in Energy Infrastructure Solutions, your business did pretty well. Maybe you can explain what exactly went so well in Germany? So is it the demand of large industrial customers or municipal utilities? Maybe you can enlarge on that. That would be very helpful.

Okay. Let me start with the heat, and I'll give the rest to Ms. Jakobi. Well, heat. Okay. There are many reports being heard at the moment. So let me try and slice that information. Well, the nuclear power plants being shut down or its output being reduced is mentioned a lot. French nuclear power plants have reduced their output and the Paks in Hungary and Cernavoda in Romania have reduced their output. Yesterday -- I don't know what the situation is today, but yesterday, France is producing less in their individual facilities. So they have reduced their output. But in total, they were still exporting energy yesterday. So from a nuclear perspective, there is less nuclear energy, but France is not seeing that problem, but the European market is getting less energy because they're exporting less.

So nuclear is stabilizing the system, but not helping as much as that energy normally does. So that's nuclear. Now if we go into Eastern Europe, it's less a question about nuclear, but market integration. The Paks power plant, the nuclear power plant in Hungary is too big for that small market. And if such a large power plant then fails, then this small market has a problem. I could put it the other way around. Let's assume Paks was a large solar-fired power plant, then Hungary would have a problem when there's no sun. The market is too small for such a large power plant and therefore, needs to be integrated more into Europe.

The problem of the Eastern European markets is that the network connections are too weak. So if we're looking for solutions going forward, nuclear is still a part of the solution, not in Germany, but in other countries. And it's a significant part of the solution if we provide better integration for more market -- for more connections. And that's always important also with regard to the development of renewables because for the renewables, which are also part of the solution, a more integrated network helps with storage and flexibility and -- to improve overall energy supply.

What is also true in principle is that, of course, in the summer and particularly in a phase like this conventional power plants that require cooling water have a problem. But that doesn't mean that we do not need such a reserve. On the contrary, renewables are not available at all times. And therefore, we believe that an integrated system, highly integrated system that offers all of these components, flexibility, battery storage, conventional power and renewables. This is what Europe really needs and ensures affordable energy for Europe.

So last comment on networks. Our network revenues do not depend at the end of the day, they depend on the regulated return. So regardless of these dry periods.

And on the EIS side, we have 2 positive effects. We have new customer connections, which we commissioned in Germany and in Aschaffenburg, but we've also seen positive effects, the Coromatic data center business in Sweden and the delay we've seen in our heat business has given us the opportunity to pass on the material prices this year. And this has had another positive effect compared with last year, both in our Nordic business segment and also in Germany.

Next on the list is [ Ms. Baitnar from DPA ].

I hope you can hear me.

Yes, we can hear you very well and also see you.

I've got 2 questions. One, after the colleagues have already asked about the heat situation. I would like to look at it from another perspective, the low water levels. What's the situation there when it comes to the supply of components or whatever? Is that secure? Are you affected? Do you have to shift to transportation on the roads, maybe transformers, for example?

And the second topic is drones. A lot is being said about that at the moment as well. Do you believe your sites are properly protected? Or would you want more support from policymakers as far as the threat situation is concerned?

Well, logistics for the components we need -- we use rail and trucks. Ships are not so relevant for us. Of course, we will see indirect effects if the logistic freight -- the freight rates go up because lorries become more scarce and more expensive, then that will have an effect as well. But that's an indirect effect only, and it's not a main cost driver for us. So we believe that the effect for us will be relatively small. If you compare that to a chemical industry -- chemical site along the River Rhine, they are affected in a totally different way than we are.

Now drones. That's a difficult question. Of course. The answer is, of course, we cannot say that we are sufficiently protected in Germany. We are unable at the moment to secure airports, the big, small airports we have. How could I then tell you that many of our 100 distributed grid points are fully under control. That's not the case, of course. Germany, Europe needs to do more across the board. We are in the process of improving the physical security of our sites also as part of the KRITIS legislation, and we have had initiatives ongoing for years.

But when it comes to drones, we need to say that progress is so fast here and so huge that -- well, we simply need to say full 100% protection against drone attacks cannot be guaranteed. What we need to guarantee what we need to prepare for is being able to restore the supply after what might be a successful attack. So full protection is an illusion, I think. We can show that attacks are not simple, but we cannot ensure that it's impossible to attack us.

This is a job for us. we need to deal with. This is for the transmission system operators and E.ON to deal with because the high-voltage grid is the most attractive for attackers, but the -- that's where the interesting assets are. Work is not becoming any easier and it's not becoming boring either.

Ms. Wagner, thank you very much. At the moment, we do not have any further questions in the chat. Therefore, again, my question to you is there anything else? Are there any further questions? Mr. Steitz is coming back?

I have a short question concerning the business in Romania. The sale did not materialize, unfortunately, but you apparently had the intention to dispose of the business. Do you see any options in the future? Or are you keeping the business after the transaction failed, although you no longer want to keep the business? Could you put that in perspective, please?

We don't really want to speculate on M&A, but the businesses that we have are operated decently as long as we have them. And we didn't say that it's not an attractive business. We had a more attractive offer that we pursued, which unfortunately didn't materialize, and that's why we currently are not -- cannot really comment on this further. We -- at the beginning of the year, we only mentioned that the disposal process was interrupted.

Mr. [ Jansen from FAZ ].

What you just mentioned, Mr. Birnbaum, concerning drones was very interesting. It's clear that each and every line cannot be protected. But could you please explain without this being too detailed, what you have in terms of defense and what -- over the past few years, have you been setting up task forces over the past few years in order to protect your equipment, have you built up technological expertise, a power plant can be protected by a drone protection zone by a GPS network? But for a line, I don't know if this is possible, how can you protect your lines even if you have the good intentions to do so?

Well, the protection of the airspace is something that the government has to ensure. We cannot ensure drone-free Germany. Our networks are located everywhere. Of course, the threat situation is rising, and there is a greater awareness of this being a topic that we have to deal with. And there is also a -- well, the industry, the politicians and the energy suppliers have closed ranks. We are working on this topic. We have drone centers. We have teams of specialists that are being set up, and that's the right beginning.

What we need, in my opinion, is a system that works realistically. I, as a private person, feel that we need a system that is integrated that over airports, it will be the police, but beyond the airports, it will be the military. We would be in charge of our equipment until the fence of the substation. These are things that we will have to develop over time. And I do hope that at some stage, the awareness of the problem will exist. And what happened in Leipzig was a wake-up call. We have systematic -- we systematically survey our critical infrastructure on a regular basis. And now we have to respond to what has been happening. But it's a government task. We will make our contribution to this government task, but we cannot replace things or do what the government cannot ensure.

Another question from Julia Becker from FUNKE Media.

I'm from WAZ. A question concerning your subsidiary, Westnetz. Two years ago, you had a problem after -- in customer service after an IT change. What are you doing for customers? Or what are you optimizing in the area of customer service?

Well, let me put this in perspective. You said it accurately. We had a major change in the IT system, and I had already mentioned that in my speech or in an earlier answer. We have to prepare our systems or have to upgrade our billing systems. We now have increased the number of entities feeding electricity into the grid from 2 to 3 million PV systems are being integrated. Everything needs to be steered and controlled. The measured values have increased exponentially. And with the smart meter rollout, we've been able to cope with this.

But with the old IT system, we were not able to do billing. In the whole of Germany, billing systems were changed. Westnetz was the pilot company in this case. And we learned from the pilot because something failed, and that was in the area of existing systems that were being processed and changed. And during the migration, we had loopholes. This had to be repaired manually, but 10,000s of values had to be done manually. 1 percentage point didn't work, and that led to the problems.

But it would have not been an alternative not to do it. The rollouts in the other companies went comparatively well. We didn't have the same problems as in Westnetz. We've identified the problems. We have identified groups of problems that we are working on with task force with special task forces and teams that are working on these topics. And together with the Federal Network Agency, we're looking at the problem and how things are developing so that we can solve the problem quickly.

And for the customers, we have interim solutions, which made it possible that down payments are made so that they do not have to wait until the complex processes have been completed. In addition, we have teams for special complex situation. So we're doing everything in order to make sure that the customers are not put at a financial disadvantage that the processes can be completed and that we will learn our lessons for the future.

But I would like to summarize that this is not our aspiration. Of course, we do not want our customers to feel any negative impact, but -- and we truly deplore that this was the case and that the customers were affected.

Thank you very much. We don't have any further requests for the floor in the chat. I would now like to close the Q&A session. I would like to thank you warmly for participating. Thank you very much to the journalists in the call and to the audience in the live stream, and thank you very much to Leo and Nadia. Thank you very much and all the best from Essen.

Good morning, everyone. Dear analysts and investors, a warm welcome from my side to our first quarter 2026 earnings call. I'm here with our CFO, Nadia Jakobi, who will present our results. As always, we will leave enough room for your questions at the end. With that, over to you, Nadia.

Thank you, Iris, and a warm welcome from my side as well. Only 2.5 months ago, we presented our full year 2025 results to you and updated our outlook until 2030. Today, I will give you an update how we performed in the first quarter. The last months have been marked by a volatile macro environment by geopolitical turmoil. The ongoing U.S.-Iran tensions drive commodity prices higher and increased market volatility. Our results demonstrate our ability to effectively and successfully deal with market turbulence as we have shown before during the COVID and the energy crises caused by the Ukraine war.

The resilience and defensiveness of our unique business model positions us as a safe haven in an increasingly volatile world. Most of our EBITDA is generated in regulated energy networks, where earnings are largely protected against volume and price risks. Strong secular growth trends make us nearly independent of economic cycles. Our predominantly European supplier base and procurement leave us largely unaffected by U.S. tariff developments.

Around 98% of our supply spending is within Europe. Our energy infrastructure business is supported by long-term contracts and price adjustment mechanisms, which provide inflation protection and commodity prices pass-through. And for our Energy Retail business, we have a robust risk management framework and hedging regime in place and have no direct exposure to the Middle East or any directly affected markets.

Before I move to our Q1 results, I would also like to share a few words on our OVO acquisition, which was announced on Monday. This transaction provides us with a unique opportunity to acquire a highly synergistic portfolio. It represents a highly complementary fit to our existing U.K. business. We see 3 key value drivers.

The combination will allow us to drive material economies of scale by optimizing custom operations and offering innovative products to a broader customer base. It strengthens our U.K. market position and enables further development of a customer-centric and digital energy business. Customers are increasingly expecting simple, digital, sustainable, and affordable energy solutions.

This transaction strengthens our ability to deliver exactly that at scale. From a financial perspective, the transaction supports our long-term earnings growth and cash generation. It creates additional financial headroom to further support our investment capacity in regulated networks and delivers a positive EPS impact. We have approached this transaction with clear financial discipline and a strong focus on integration planning from Day 1.

With our track record of turning around underperforming U.K. businesses, we possess the necessary knowledge and capabilities to carry it through successfully. We are excited about the opportunities ahead and are confident that this combination will create long-term value for our customers and shareholders. That said, let me now turn to our results for the first quarter of this year with my 4 key messages. First, E.ON delivered a strong operational, financial performance, which puts us firmly on track to achieve our full-year guidance.

Our adjusted EBITDA reached EUR 3.3 billion, and our adjusted net income came in at around EUR 1.3 billion. This links into my second message. Our growth trajectory is progressing well. Our investments continue to materially exceed depreciation. Most of our investments are allocated to our German Power Networks business to further enhance the energy transition.

Third, our balance sheet remains strong. Economic net debt of around EUR 46 billion in the first quarter reflects the typical Q1 cash flow seasonality driven by the working capital pattern of our business model. And finally, we fully confirm our guidance, including our dividend policy. Let us move on to our Q1 year-over-year adjusted EBITDA bridge. Starting with Energy Networks, adjusted EBITDA was broadly stable year-over-year.

Continued investments in our regulated asset base supported earnings growth across all business regions. This was offset by negative structural effects mainly from deconsolidating one of our regional utility participations in Germany, NEW AG, and the sale of our Czech Gas Networks business. In addition, we saw higher costs to support the continued expansion of our Networks business.

We have continued our track record of operational excellence even as network complexity has increased significantly. Beginning of this month, Germany experienced exceptionally high solar generation, a peak generation of around 46 gigawatts coincided with low holiday demand of only around 43 gigawatts.

This led to prolonged periods of sharply negative power prices at times reaching almost minus EUR 500 per megawatt hour. In these challenging conditions of high system volatility, all of our DSOs were able to maintain full system stability. This effort was also recognized positively by the regulator. Moving on to our Energy Infrastructure Solutions business. Here, we have seen positive earnings effects from the commissioning of new projects and the pass-through of higher procurement costs related to previous years.

In Energy Retail, we delivered a strong first quarter. We saw slight earnings increase in Q1, driven by temporary effects from phasing of price adjustments in our German business, which we expect to normalize over the course of the year. In addition, the performance of our U.K. B2B business has continued to normalize as expected. Our adjusted net income came in as expected at around EUR 1.3 billion.

All P&L items below adjusted EBITDA developed in line with our expectations in Q1. Looking ahead, the current development in adjusted net income is expected to be offset over the course of the year by higher interest expenses. As stated in February, we expect an increase in interest expenses this year, driven by higher net debt levels from ongoing investments and higher refinancing costs for maturing low coupon bonds.

A portion of this is already visible in Q1. Overall, we remain well on track to achieve our full year adjusted net income 2026 guidance. Looking at the development of our economic net debt, I would like to highlight 4 key points. First, our promised investment growth trajectory is progressing, and we are well on track to deliver our full year targets.

Second, the negative operating cash flow in the first quarter reflects the typical seasonal working capital pattern of our business and is expected to reverse over the course of the year. Third, we are well-advanced in executing our 2026 funding plan. Ahead of recent market volatility, we secured EUR 1.6 billion in the Eurobond market and a further EUR 1.4 billion from investors outside the Eurobond market even during the volatile period.

This brings us to a total funding of EUR 3 billion at attractive spreads, covering more than half of our 2026 requirements and underlining both resilience and increasing diversification of our funding base. And finally, our balance sheet remains strong, and we continue to see substantial extra balance sheet capacity over the guidance horizon. And this has just been confirmed yesterday by S&P and Fitch, while affirming our BBB+ ratings with stable outlook.

Let me conclude today's presentation with my key takeaways. First, we delivered the first quarter as promised even against the backdrop of geopolitical uncertainty and elevated market volatility. The strong Q1 outturn firmly supports our expected guidance delivery for 2026. Second, our growth trajectory, especially in Power Networks, is progressing well and continues to drive the energy transition in Europe.

Third, our balance sheet remains strong. We will continue to focus on delivering an attractive total shareholder return based on value-creative organic growth and an annually growing dividend per share. Finally, we fully confirm our full year 2026 guidance and 2030 outlook. And with that, back to you, Iris.

Thank you, Nadia. And with that, we will start our Q&A session. [Operator Instructions] And with that, the first question comes from Julius Nickelsen from Bank of America.

My 2 questions. The first one is on OVO. So you said that the deal will be EPS accretive by 2030. But could you maybe shed a little bit more light in earlier years? Is there any adjustment necessary to the intermediate 2028 guidance? So that would be useful. And then the second one is on German regulation, specifically the OpEx adjustment factor paper, which came out in April.

Would you say that this document materially increases your visibility on regulation now or there are still missing pieces? Or put the question another way, are you internally now able to quantify the impact of this factor? Or is there still some missing pieces that you would need to actually have like a sense on what it could do to your numbers?

So thanks for the questions. So first of all, let me highlight again, we are very happy to have been able to conclude this transaction. I will give you a bit more insight into the earnings impact. So over the overall guidance period, the cumulative ANI impact is broadly neutral, especially -- expect 2028 to be negatively impacted by integration and restructuring expenses.

And then ANI contribution will be then positive from 2029 onwards. And the last guidance year, as we have already highlighted before, 2030, we will see a high double-digit million positive impact. Let me maybe briefly explain why that is.

We have this time very consciously decided to not put restructuring expenses into non-operating earnings but include that in our operating results. And secondly, also that you have got purchase price allocation effects from the depreciation of that from the customer book, that is also included...

Hello? It seems like you dropped out, Nadia.

I dropped out? Since when? Can you hear me now, Julius?

Yes. Maybe it was just me, but I couldn't hear anything for the last 30 seconds.

It wasn't just you.

Okay. So then if it was everybody, we will -- I will just start again and say, okay, look, total guidance period, cumulative ANI impact is broadly neutral, 2028 specifically will be affected by integration and restructuring expenses. ANI and EPS will be positive from 2029 onwards, and then we will reach in 2030 an ANI impact of a high double-digit million-euro impact.

Reason -- and now we have reason for why that is sort of negatively affected in 2028 is because we have consciously decided not to put the restructuring expenses into nonoperating earnings but leave that in the operational result. And second point is that from the purchase price allocation, we expect depreciation of the customer book, which will be also affecting the results. So then going over to OpEx factor, yes, you're right, Julius.

We received in April, BNetzA has published some information, which is not legally binding. Generally, it's a good instrument, which we welcome. It's also good and previously discussed, there were thresholds for the OpEx adjustment factor that are now no longer discussed. What we are critical about is that account foresees an introduction of a 2-year time lag for recognizing the OpEx adjustment factor that deviates from the original proposal and from our perspective, lacks any economic justification.

You asked then about can we now calculate it already and that is currently not the case from what we see here. The mechanism is very closely linked to benchmarking, and the final shape depends on the benchmarking results. And of course, the benchmarking results will be only available in 2028. So the main key parameters remain uncertain. And that's why at this point in time; we are not able to assess the financial impact from the OpEx adjustment factor.

With that, we come to the next question from Harry Wyburd from Exane.

So 2 for me. So first, another one on OVO. Can we just talk a bit about the balance sheet rationale? And for me, it's not a deal I would have expected you to do because you're so focused on the core distribution business in Germany and there's headroom to raise CapEx there. So why did you do this deal? Was it just too good to pass up? Did you feel like you had -- your procurement operation gave you some kind of advantage?

So just why this deal now? And does it preserve your EUR 5 billion to EUR 10 billion of spare balance sheet headroom? Or is it even accretive to that? Or does it affect in any way your ability to raise CapEx on distribution later? So that's the first one. The second one is on AccelerateEU and Iran and what I think we all hope is going to be an accelerated pace of electrification as a result of all of that.

And is there any opportunity to use that as a catalyst to come to quicker agreement on returns with the regulator, perhaps with the assistance of the government? Because my perception is that, we're slightly stuck in the mud for the next couple of years. You've got this trickle of OpEx adjustment factor, the gas regulatory review, but there's nothing coming up in the next 12 months unless I'm missing something that would be decisive and allow you to go ahead and raise your investment.

So could you go to the government or the regulator and say, given AccelerateEU, can you give us some early clarity and then we can go faster? Is that something that's plausible? Or do we have to wait for a few years now to see the final CapEx envelope?

Thanks, Harry, for the questions. So maybe starting with the last part of the first question. We -- as we have indicated, this transaction will actually provide us with a headroom increase of a high 3-digit million-euro impact and therefore, is by no means restricting any investments in the regulated asset base, but exactly the opposite.

So it was -- it is a rare attractive opportunity that presented itself to us to acquire a highly synergistic portfolio. It will strengthen our U.K. market position and will enable further development of a customer-centric and increasingly digital energy business. And it will -- there's really this synergy case that we are after.

And we have the retail business for its earnings generation, but also very much for its cash flow contribution. And this deal will actually enhance the cash flow contribution and therefore, will be very positive for further growth in the infrastructure business. Second point on AccelerateEU grid package, maybe coming to the last part of the question.

So first of all, my judgment would be that it's a good thing, whether this will now swing the needle in German regulation, who is very much on their own time schedule, I would say every little helps, but I would rather see the upward pressure from the German economy from dissolving the bottlenecks from all the requests that we have for renewable connection, battery connection, and industry connection and customer connection.

I would rather see this bottom-up push from all our regional connection requests and also the top-down push from the German politics, i.e., the Ministry of Economics, I would see at this point, more influential for getting faster resolution on the regulation. So -- but overall, AccelerateEU grid package strengthens European resilience to increase incentives for further electrification, which is good.

And it very much aligns with our strategy to drive the electrification through Europe. We like the expansion of industrial electricity pricing and electricity tax relief for customers. We like all additional incentives for electrification because we think it's the right thing. Further details will be worked out in the coming weeks, but we think it's got a positive impact on our businesses, AccelerateEU good package, but not an immediate impact from my perspective on the regulation.

Okay. And just to clarify, the high triple-digit figure. So we're basically saying that if it was EUR 5 billion to EUR 10 billion before, it's maybe sort of EUR 5.8 billion to EUR 10.8 billion now. Is that the right way to think about it on balance sheet headroom as a result of that?

Yes. If you may say so, that wouldn't be outside the ranges that I would have given.

And with that, we come to the next question from Deepa.

Sorry, I'm also going to start with OVO and then ask a boring question on the balance sheet. So on the OVO transaction, I noted that you've talked a lot about the technology stack and synergies and so on. So my main question is you are using the Kraken system in the U.K. OVO has been using Kaluza, which are both, apparently, good and comparable. So what is your assumption on the integration?

Because presumably you can only extract synergies if all the customers -- all the 10 million customers are on the same. So what is your assumption? Will you move the existing E.ON customers to the Kaluza or the other way around? And what do you mean by that digital stack being attractive?

So that was the first question on technology and the plan. Second question on the balance sheet. Just wanted to reconfirm that the overall cash conversion for the full year is around 100%. And would you be able to say where you expect the net debt for the year-end to be? Yes, that's my second question.

So as part of E.ON's acquisition of OVO Energy, E.ON will enter into a long-term license agreement with Kaluza. So as you have highlighted, Kaluza is a scalable, flexible and proven technology platform and simplifies energy billing, reduces costs to serve and enables faster product innovation to facilitate the energy transition. We will conduct an objective assessment of the Kaluza platform, looking at 3 different perspectives.

So first, as a core platform for the U.K. energy retail business; second, for E.ON's businesses in other international markets; and third, as modular components [indiscernible] Kaluza Flex. And then when we've looked at all of that, we will then make an objective choice for E.ON U.K.'s one single retail platform. So synergy delivery is for us agnostic of the platform choice. And as you have highlighted, we will now first assess the platform, and then we will make a decision on to which single platform we will migrate.

And then on cash conversion, we have got the same target for cash conversion, i.e., the 100% cash conversion that we had articulated before. And then when it comes to economic net debt, we stick to our year-end guidance of being below or at least -- or equal to 5.0 economic net debt. And from today's perspective, I see no reason to deviate from that.

With that, we come to the next question that comes from Pavan from JPMorgan.

I just have one big picture question, please, Nadia. Can you just give us a reminder of where we stand with the German electricity networks regulation, upcoming milestones that investors should be looking forward to? And a reminder of the outstanding, if you will, key areas of concern between E.ON and BNetzA, whether it's things on the return or other areas that you'd like to see improve before you have the clarity that we need?

Yes. So I think it's pretty much unchanged compared to what we have said at the full year conference. We have got now a bit more clarity on the OpEx adjustment factor. And as we highlighted there's going to be the gas determination with the draft determination for gas in July 2026 and the final decision by the end of the year, which could provide cross reads for power.

Final clarity for the WACC for power is expected to be until end of 2027, and some of the remaining regulatory parameters like cost audit will be set in 2028. I think we have reiterated the points in what we don't like about the current proposal and where we still have open points. So let me go back to what we said in Q3 and in the full year.

So 7-year look-back period without mark-to-market adjustment for cost of debt for existing assets is for us unacceptable because we cannot refinance our existing assets on that basis with a 7-year look-back period. We have a couple of parameters outstanding when it comes to the cost of equity.

Think we specifically highlighted points around re-dispatch cost when it comes to the benchmarking, where we are in intensive discussions with the regulator to highlight how that is something which would give a strong disadvantage for those who are enabling the energy transition.

And as we indicated earlier, overall, the overall framework must be right for us to earn our value creation spread of 150 basis points to 200 basis points, mostly on pretax WACC. So basically, there is -- on top of the OpEx adjustment factor where we've got some insights now, there is not more news flow that we received in the last 2.5 months.

And with that, we move on to Ahmed from Jefferies.

Actually, I'm going to ask both questions on the first quarter results. My first question is you referenced phasing effects within German retail. Could you quantify that for us as to what is the sort of the number in the first quarter for these phasing effects? And when do you expect these to reverse over the course of the year?

And then my second question is just on the -- very quickly on the D&A and the interest line for the first quarter. Can we see them as sort of good run rates for the full year? Or are there any seasonality effects within -- or sort of adjustments within the 1Q number, which we sort of need to bear in mind?

Yes. Thanks, Ahmed. I think from the German retail business, the phasing effect is a mid-double-digit million-euro effect, which will reverse continuously in the next 3 quarters, which comes through the different timing of price adjustments that we had in -- now in Q1. When it comes to the second question, I think on the interest line, I have alluded to that in my presentation that we will see more increases of interest expenses due to the maturing of low or very low interest bonds, which need to be refinanced.

And of course, due to the growth trajectory that we are in, we also need to finance that growth on top. And on -- I guess on the depreciation side, you will need to take into account that we have, for example, de-consolidated NEW. We have not -- we have sold our gas distribution network in Czech, and that's what affecting that depreciation line.

So maybe just one clarification. All these deconsolidation effects are now through in the first quarter. So just to check sort of all the effects that have come through.

So I think when you look at the gas grid in Czech Republic, that was sort of very low double-digit million-euro EBITDA effect, what I can -- what I know. And then on the NEW effect, that is approximately high double-digit million-euro impact on EBITDA, if that's the question on that. So I'm not fully -- so I don't now have sort of the details of the depreciation Q1 effect on that, but I guess colleagues can come up with that.

With that, we move on. The next question comes from Louis from ODDO.

Maybe 2 questions as well here on my side, one on OVO and one more general. I think that you mentioned that they have around 70% of customers which are under SVT tariff. Does it create, according to you, greater sensitivity to the future option price cap change? And how would you eventually mitigate that risk in your customer strategy going forward after this acquisition?

And maybe another question more general. You repeatedly stressed that you have a resilient business model. And I think that once again in the first quarter, we see that it is indeed the case with reasonable resilience and strong performance in spite of the political and geopolitical environment. What do you see on your side as the biggest external risk for not reaching your target in 2030 today?

Yes. So we highlighted that 70% of the customer base of OVO is related to SVT because it demonstrates that this is a high-quality durable book with a strong average tenure. So that was the point why we highlighted that point. We don't see now additional risk from additional price cap because the price cap is doing exactly that. It is U.K. price cap regulation is based on a comparatively short hedging tracker.

And the integration and the combination of the businesses will only take place once we have done the platform assessment. So the OVO customers will be continued to be supported by the current agreement, Shell agreement that they are on to get their energy procurement. So I don't see an increased risk from that. And then the second, as you highlighted, we are saying, yes, we have got a very resilient business model.

The Q1 has developed fully in line with our expectations. that's why we have -- we don't see now -- I, from today's perspective, don't see big risk. Of course, we always have some operational risk. We need to deliver on our availabilities. We need to make sure that we develop our customer portfolio.

But I wouldn't now single out some risk, of course, bad debt can increase if the gas prices increase for our customers. On the other hand, we are also benefiting from our long-term setup of professionally managing our commodity portfolio. So I'm confident about the outlook, as I have said in my presentation.

And with that, we come to James from Deutsche Bank.

Congrats on the deal. I had multi-questions, but I'll keep it to 2. So the first one is just trying to square what you're saying about the restructuring expenses for OVO. I kind of had in mind that restructuring expenses would be pretty large, like hundreds of millions of euros or pounds or whatever just because obviously, the kind of expectation is you shut down one of the platforms, I presume there's probably going to be quite a lot of headcount losses, but then you're saying you're going to not strip them out as one-offs and overall, it's going to be kind of neutral over the period from a net income perspective, but only getting up to double-digit million euros at the end.

So that kind of seems to imply the restructuring charges could be quite low. So I guess the question is kind of how should we reconcile that? And is there any more details you can give us in terms of what the restructuring expenses that will be flowing through into the adjusted net income would be? I guess maybe I'm over -- was overestimating it. And the second question is on the beta for the German regulatory review.

We've -- everyone's talked a lot about the risk-free rates, the market risk premium, the cost of debt mechanics, the cost of -- the cost cutting or cost allowances, but people haven't really talked much about beta. And as far as I'm aware, there hasn't really been much out from the regulator on the beta. So my question is, what's your expectations? Do you think it will be kind of held broadly in line with what it was previously? Or should we be expecting it to be reduced?

Yes, thanks. So we're expecting total restructuring and integration expenses in a low triple-digit million-euro range across 2026 to 2029. But bear in mind, of course, this is based on the EBITDA impact. So you would assume that from an adjusted net income impact, that would then also, of course, also be tax deductible. Then when it comes to beta is a bit from what I said earlier, yes, on the cost of equity side, we don't have the insight yet. And as you say, its risk-free rate, it is market risk premium.

And it is beta. I think what's positive in the new regulatory regime is that it is now saying that all the different elements need to be looked at from an integrated perspective, i.e., you cannot just pick and choose different kind of tenures, but it needs to sort of be looked at integratedly and I cannot now say I expect EBITDA to develop in this direction because I don't now have any more information on that. As we highlighted -- as I highlighted before, there isn't any additional news flow compared to what we've talked about in full year.

And the next question comes from Alberto.

I have 2 non-OVO questions. And the first one, a bit complicated, but hopefully. So you've done 48% of full year midpoint guidance. So I was trying to understand what you might see going wrong in the rest of the year for you not to be able to upgrade guidance above the top end. It looks like -- I'd love to see if you can comment on that.

It looks like you're trailing above the top end on Energy Networks and perhaps midpoint EBITDA on EIS and energy retail, maybe even a little bit better than that, which together with the lower depreciation would suggest actually you to be above the top end on net income despite refinancing. So I was trying to understand, can you poke holes in these pieces?

What I may not be considering because it seems to me you are really trailing above your guidance. Is it a matter of prudence and we wait and see later in the year? Or there's something specific that we need to think about? And I'm already accounting for all seasonality here.

The second question, a bit broader, but should we expect an Investor Day from E.ON before year-end, maybe to address cost savings plan or any incremental growth, any potential acceleration in electrification we might see from incremental incentives that the EU may start to trickle down in the rest of the European member states?

Yes. Thank you, Alberto. So the Q1 has developed fully in line with our expectations. So the irony is, as you highlighted, a bit stronger than last year, but the Q1 also includes some lower earnings contributions from entities with minority interest in 2026, which is just a temporary uplift in adjusted net income. So that might be then one of the [indiscernible] in your thesis. Then on -- I think you highlighted the 3 different segments.

And in the 3 different segments is also how we've indicated they have been all running in the first quarter in line with our expectations, ICE and Energy Retail, but also the Energy Networks business have developed in line with our expectations. So we don't expect now the full year ANI increase from our Q1 results because the financing costs are expected to rise further and then they bring back the ANI growth year-over-year to be broadly stable.

Yes, second question, Investor Day. Iris, [indiscernible]. So I'm not aware, but maybe Iris said and she hasn't told me. No. So from today's point of view, we have not looked at an Investor Day. I think you also asked the question about cost savings in the full year call, where I think Leo has given some answers. Yes, there is cost efficiency improvement potential in our retail business, which is baked into the results. As you can see, we are increasing the result from a midpoint EUR 1.7 billion now to EUR 2.1 billion in 2030, which is quite some increase.

Of course, there is always also a potential -- there's always a good point in analyzing whether you get -- could gain more from AI. But of course, AI can also produce headwinds because it makes competition more fierce. So I guess we would stick to the answer that Leo has also given in the full year call when it comes to sort of Investor Day and cost savings.

Was there any other thing? I think there's some other incrementals that were trickling down. I think there I would lean back to the answer I gave earlier, yes, in general, this EU political developments are providing us with tailwind, whether that is concrete enough to make out of that in Investor Day in Q3, I would be a bit skeptical.

With that, we have a question from Piotr from Citi.

I have 2. So the question I wanted to ask you, like how do you think about the relation between the rate and your 2030 targets? And I'm specifically referring to the fact that risk-free rates are basically up, I don't know, 20 basis points since the Iran war. We don't know which way it goes. But do you think about it that you will be ultimately able to pass through all of this increase, and therefore, we should think about your 2030 as an upward moving target on the bottom line of EBITDA?

And then specifically on Germany, do you -- does this move of the 25 basis points increase, let's see if it continues, impact your view where you will end up with the total package on the German regulatory view, apart from the technical mechanical adjustment of the averaging and so on. But I was just thinking like do you have some number in mind and it's being changed because of what happened in the market happening. Or do you have more like a floating number in mind?

So for us, we have given sort of an absolute target for 2030. And I think you have covered it quite well. There are, of course, things that are positive and negative on a 20-basis points variation. So as you know, 20 basis -- and we have discussed on the topics around the fixing of the regulated cost of debt in Germany, I think we've discussed on that enough.

And of course, it becomes more difficult to reach that if you stick to this 7-year average. So we are currently not working with floating ANI guidance. So we would be sticking to sort of a firm ANI guidance. And as I said in the presentation, we are fully confirming our outlook for 2030. And of course, the announced acquisition not being part of that.

With that, we move on to Rob from Morgan Stanley.

Just 2 quick questions, if I may, which are really follow-ups from earlier. The first one, just holistically regarding OVO again. Is there any conceptual reason why E.ON cannot turn around the levels of profitability in OVO to where E.ON's U.K. business currently is? I appreciate, sort of, spreadsheet exercises make anything possible. But from your perspective, can you achieve parity with your current U.K. business?

That's question one. And secondly, you talked earlier about the regulatory cost of debt. Maybe I missed it, but when could we hear an update from the regulator on the allowed cost of debt for your existing assets, which seems to be, if I understand, one of the main sticking points with the regulatory package as it looks today.

First of all, for the OVO question, what you need to bear in mind, our U.K. business is not just a B2C retail business, but it's also including a B2B business and some other elements around that. I think we are also serving Telecom Plus customers, et cetera. So you wouldn't just be able to pro rata the per customer result that we have been including in our report.

So you cannot just take the EBITDA that you see in our annual report and divide that by the customer numbers. And then secondly, as I indicated earlier, we'll also have effects on the write-down of the customer book, not the write-down, but the depreciation of the customer book, which will not be finalized by the end of 2030 yet. So that would be that. And yes, it is not only the regulatory cost of debt.

It is also the cost of equity, the benchmarking, et cetera. I think we highlight the cost of debt always because it is sort of -- it's a significant part and it is also quite easy to understand that this is sort of not a fair representation of how we can refinance ourselves in the capital market. I think what we have said, the regulatory cost of debt for gas, which is a very, very small part of our German business will be then determined by the end of 2026, most likely if the regulator sticks to their time lines.

And then for power, we will have the same in the end of 2027. What we don't know yet what is the individual weighting of the different years in the averaging of the cost of debt and seeing this big increase in interest from 2020 to now, it is, of course, highly relevant how then the final cost of debt will be determined.

And with that, we come to the closing questions from Wanda from UBS.

Hopefully, you can hear me.

Yes.

Two questions. One on -- I mean, two on OVO, apologies. There have been many, many questions on OVO today. Do you expect any cash injection into OVO once the deal is closed, so we can understand if there is more cash or any kind of cash equivalents are going to be put into the OVO business beyond the closing transaction then?

And the second one is what makes you so confident about the U.K. retail business? Because this is one of the most competitive markets, right? I mean you are telling us it will be EPS accretive in 4 years' time from now. The political environment is not the best currently, if you look at the recent local elections. So what am I missing on the U.K. retail?

So thank you, Wanda, for the question. So we will benefit from the strong E.ON balance sheet and the transaction has a positive on E.ON's headroom in 2030, as we said, but we will now not disclose any exact cash flows on -- in the business plan. So second point, why do we think the U.K. market is a positive? We have been in the U.K. market since 2000, E.ON since 2002, former npower business was in RWE since 2000.

So we have been acting in the market. And you're right, the market was quite difficult, particularly in 2019 and '20. But what we have shown is that we have consistently been able -- so first of all, we've done a big integration like this with some of the main leadership still being in place. So we have done all that. And when you look back into how we have been able to make positive EBITDA contribution in that business in the last years, it almost always had exceeded investor expectations.

I think we have seen a lot of reasonable way of how the regulator has now been behaving in the market with things like capital adequacy rules, sort of in prior years, in like 2019, we have seen some unjustifiable benefits for smaller operators who eventually went bust and then needed to be saved by the others in the market. So we are -- we see -- and we have a very close interaction.

We see a very -- we see a positive outlook for the market. We have got a very professional relationship with the U.K. regulator for a long time regardless of the political sentiment. So we believe it is an attractive market. And when it comes now to political speculation, we wouldn't now speculate on that. I would see in something as fundamental as gas and electricity, I wouldn't now see that this is then affected by the current political discussions.

Thank you all. Maybe it's also worthwhile for us to sort of demonstrate and show again how we have been able to develop our U.K. business and how we've been able to consistently show very positive financial results in the last years. Maybe we can also bring that to the next -- some of next quarter's meetings or some of the other meetings.

Thank you very much, Wanda, and thank you, Nadia. And thank you, everyone, for your time and participation and interest. If there are any remaining questions, I know some people have their hands up a second time, please reach out to IR. We are happy to follow up with any further questions that might be there. Thank you very much. With that, we close our Q1 call, and have a nice day, everyone. Bye-bye.

[Audio Gap] our full year results. As with every occasion, we will leave enough room at the end for your questions. With that, over to you, Leo.

Yes. Good morning, everybody. Thank you, Iris, for the introduction also from my side. The past financial year has once again proven one thing. We at E.ON deliver on our promises, and we at E.ON are exceptionally well positioned to not only be the playmaker of the energy transition, but also a beneficiary of this transition. In a year that has been characterized by geopolitical instability and macroeconomical challenges, E.ON is a safe haven. One has to admit that our business is facing a secular growth opportunity. It has no U.S. dollar exposure. It's largely inflation protected. It's unaffected by U.S. tariff policy, and it's even largely shielded against the latest fear of an AI disruption. What more can you ask for in terms of resilience. But that doesn't mean that we are without challenges.

And so let me now move to our -- my 4 messages before handing over to Nadia. First, we have delivered strong financial results for the year 2025. again. Second, we have not only delivered financially, we have also delivered operationally. And our focus on outstanding operational excellence means that we are at the forefront of the energy transition, and this enables us to execute our growth plan successfully now and also in the future.

Third, our growth case is based on a secular growth trend, and this trend is extremely robust. It's driven actually by a broad set of structural drivers and not only by one thing changing. And it's largely independent of short-term economic and -- economical and political fluctuations. And fourth, we are committed to long-term shareholder value with a disciplined focus on value creation. We will grow our investments until 2030 and are ready to pursue further growth opportunities, but only once the parameters for RP5 in Germany are set.

So on my first message, we have delivered on our financials with an adjusted EBITDA of EUR 9.8 billion and adjusted net income of EUR 3 billion, both actually reaching the upper end of our guidance range. In 2025, we have on top, executed, increased our group CapEx for the fifth consecutive year, and we have completed a record level of investments into Energy Networks up to 20% up year-over-year, supported by successful project executions across Europe. And this demonstrates again the continuous progress of our growth strategy driven primarily by our Energy Networks business. We are operationally well set up. Nadia will talk you through the details of the financial performance later.

To my second message, we have not only delivered financially, we have also delivered operationally. In August 2025, we crossed a major milestone, around 110 gigawatts of renewable energy sources are now connected directly to our grids in Germany. Let me just give you some perspective. We operate around 1/3, if you calculate it in grid length of the German grid, but we have 70% of Germany's total onshore wind power capacity and around 50% of its solar capacity. We have 58% of the installed battery capacity, you name it. It's like the energy transition is happening and taking place in our grids.

At the end of January 2026, just last month, we hit another milestone. We connected the 2 million renewable energy source to our German grid. For perspective, we celebrated 1 million somewhere in October 2023. So it took us 15-plus years to reach -- to do the first million, it took us 2.5 years to deliver the second million. The third million will happen in less than 2 years. That's the scale of acceleration that is currently just being driven by us. And in parallel, we are delivering on the smart meter rollout. All E.ON DSOs in Germany have met the mandatory 20% rollout target for smart meters with an increase of, on average, 60% in rollout volumes versus 2024.

For us, at E.ON, this makes one thing clear, the energy transition is now an operational task on an industrial scale. And aside from massive investments, operational excellence is a prerequisite, not only to scale the business, but to stabilize also an increasingly complex system.

Regarding operational excellence, let me share a few highlights from 2025 regarding standardization and digital transformation as well as some innovation examples. Within Energy Networks, we have successfully concluded our component standardization project in Germany. This gives our EU-based manufacturers visibility and builds the basis for long-term supply agreements on key components well into the 2030s.

And it contains enough flexibility and scope to support a CapEx envelope beyond what we have in place right now. We are now rolling out this approach across our European DSOs as well to further strengthen supply chain planning and improve component quality across all our DSOs. And in these less standardized markets, we have already achieved a 20% reduction in technical specifications across key categories.

Beyond standardization, we actively pushed the digital energy transformation by embedding digital capabilities deeply into our operations. Obviously, you can't integrate 2 million feed-in points without digitization. So in Energy Networks, for example, our new field assistant app in Germany provides technicians real-time visibility of the power grid real time. I emphasize real-time visibility. Early results show up to 45% less effort for circuit planning, up to 40% less documentation, enhancing both safety and productivity.

In Energy Retail, we continue to invest into digital capabilities that improve efficiency and performance. Based on that, our U.K. business was able to increase digital sales by 30% in Q4 2025 compared to the same period 2024. And finally, as a playmaker, we do, as you would expect, also innovate. In Energy Networks, we are rethinking grid expansion. We developed a feed-in grid socket as we call it, that bundles renewable energy sources at a single grid connection point. The simplicity, speed and cost effectiveness of the feed-in grid socket means that developers can access capacity faster through online booking and achieve a quicker and cheaper route to grid connection.

For our retail customers, we continue to rapidly expand our innovative offerings, and we now have around 16 flexible energy propositions across 6 markets, including the world's first bidirectional charging proposition launched with BMW in September 2025. So standardization, digitization, innovation, the message is clear. This is part of operational excellence, and this is how we deliver and build the foundation for future success.

Let me get to my third message regarding the extremely robust secular growth trend that we are in. On our Capital Markets Day in 2021, which was the last one we did, we set a clear strategic course, focusing the business on energy networks and investing decisively in grid infrastructure. Since then, we have continuously ramped up our investments. When we compare the year 2021 to 2025, the level of energy networks investments has doubled. And many of the emerging growth drivers have not yet reached their full potential. Let me touch upon a few ones.

Continued grid expansion and modernization. It's clear that grid reinforcements are necessary to deal with the integration of renewable energy sources associated -- and the associated increase in volumes. But that's also true for other drivers like data centers. In the south of Frankfurt, for example, we planned upgrades to the high-voltage lines, and that will increase transmission capacity by 2.5x replacing 170 old mass with 135 new ones.

In data centers, we have last year committed to connect an additional 12 gigawatt of data centers to our grid in future years. And just as one example, we will build the connection for 700-megawatt data center in Nierstein, close to Frankfurt, which will be one of the largest grid connections for data center within Europe.

E-trucks, 5 years ago, when we did a Capital Market Day, we were still assuming that hydrogen is going to take a large part of truck transportation. But right now, actually, this is not looking like it. We are moving towards electrification also here, and we are reaching the tipping point with the total cost of ownership approaching parity, if not having being already beyond parity. And the EU-wide CO2 fleet standards require manufacturers to reduce new fleet emissions. This is an emerging opportunity, but also a big commitment of E.ON for the green mobility transition. In Germany alone, we will be adding more than 160 new grid connections for high-performance electric truck charging infrastructure. That represents roughly half of the nationwide fast charging network for electric trucks as initiated by the German government.

So to summarize, our growth case is robust, supported by diverse growth drivers that accelerate well into the decade ahead. And if one driver turns out to be less than in the past, always others have turned out to overcompensate for that. So we are extremely confident on that trend.

And that brings me to my final message for today, the further upgrade of our networks investments that we will do. So we have rolled forward our guidance to 2030, and we will increase our 5-year CapEx envelope from EUR 43 billion to EUR 48 billion for the years 2026 to 2030. We continue to invest at a run rate of close to EUR 10 billion per year from 2027 onwards, which translates into a 10% power RAB growth in Germany. As said, we are operationally ready to invest more. Our processes and capabilities fully would support a higher investment pace that is also potentially really needed.

As highlighted today, it is our continued operational excellence that enables us to capture and convert this growth into strength and value for our shareholders. And our attractive combination of organic growth with a continued dividend growth target of up to 5% per year offers attractive long-term value with an opportunity for more. Now a successful energy transition requires significantly more network investments. They are essential from a macroeconomic perspective to avoid cost. They are good for our customers. They are politically supported in the business case in itself crucial for industry. Therefore, our confidence that final RP5 package will be attractive enough to actually deliver on those CapEx envelopes remains unchanged. We need more infrastructure. More infrastructure is good for German customers. Therefore, we assume that the prerequisites will be in place. What we need as a prerequisite is the necessary regulation that gives us the long-term planning certainty and financial attractiveness to support this further expansion.

With that, let me hand over to Nadia. Nadia?

Thank you, Leo, and a warm welcome to all of you from my side. I'm pleased to share with you the details of our 2025 financial performance and our new guidance for 2026 and outlook to 2030. My 3 key messages for today are: first, we delivered a strong performance in 2025. Once again, our steady execution translated into strong full year results and record high investments, providing growth despite ongoing geopolitical and macroeconomic uncertainty. We achieved an adjusted EBITDA of EUR 9.8 billion and an adjusted net income of EUR 3.0 billion, both reaching the upper end of our guidance range. Our investments increased by 13% year-over-year to EUR 8.5 billion, supporting continued growth in our regulated asset base.

Second, we introduced our 2026 guidance and provide an outlook to 2030. We expect to deliver more than 6% earnings growth, while shareholders continue to benefit from a reliable dividend growth commitment of up to 5% per year. This represents an attractive total shareholder return. We maintain strong investment momentum, increasing our 5-year CapEx plan by over 10% to EUR 48 billion, while strictly adhering to our value creation framework.

And third, our strong balance sheet provides further opportunities to pursue additional investments beyond the current guidance once regulatory visibility on key RP5 parameters in Germany improves. At the same time, it provides us with a prudent buffer against potential risk.

On my first message regarding our strong 2025 delivery. As we already anticipated earlier this year, our adjusted EBITDA came in at the upper end of our guidance range with EUR 800 million year-over-year growth. We saw a significant EBITDA increase in our Energy Networks business through accelerated investments in our regulated asset base across all our regions.

Our annual network investments increased to EUR 7 billion in 2025. As is well known, the result was also driven by value-neutral timing effects. Further effects in Q4 bring the total amount to around EUR 400 million. Most of the effects came from our Energy Networks Europe business, driven by volume effects and recovery of network losses. The remainder is with our German Networks business, where higher volumes and lower redispatch costs added a high double-digit million euro amount.

Our Energy Infrastructure Solutions business grew by around 5% year-over-year to EUR 588 million. The growth was driven by higher volumes compared to previous year and improved asset availability in the U.K. and Nordics. Additionally, we saw investment-driven organic growth as well as continued smart meter installations in the U.K.

Moving to Energy Retail business. Here, we landed as expected at the midpoint of EUR 1.8 billion. The earnings development in the U.K. progressed as anticipated with the well-known effects continuing. In our B2C segment, customers continue to switch from SVT into fixed-term tariffs. In our B2B segment, contracts from previous years continue to roll off. Price adjustments in Germany from earlier in the year had a positive compensatory effect.

Just for completeness, we had a negative high double-digit million euro one-off effect from efficiency programs in our Energy Retail and ICE business. This brings our total one-off effects to around EUR 300 million, resulting in a total underlying EBITDA in 2025 of EUR 9.5 billion.

Our adjusted net income came in at EUR 3.0 billion at the upper end of our guidance range. We continued to see slightly higher depreciation costs caused by the increased digital investments with shorter useful lifetimes. At the same time, our interest cost rose due to the higher net debt level compared to last year and the higher refinancing cost for maturing bonds. On an underlying basis, this converts into EUR 2.84 billion of adjusted net income.

We maintain a strong balance sheet. Economic net debt decreased by EUR 200 million quarter-over-quarter to around EUR 43.2 billion at full year 2025 despite the continued investments in Q4. Our investment increased by 13% year-over-year to EUR 8.5 billion, extending our track record of 5 consecutive years of annual increases following our strategic repositioning in 2021.

Our strong operating cash flow of EUR 3.6 billion was the main driver of the debt reduction in line with the typical pattern. As a result, we closed the period with a comfortable debt factor of 4.4. This shows that we remain fully committed to a capital structure staying below our up to 5x promise to maintain a strong BBB/Baa rating. This balance sheet strength is further supported by 100% cash conversion rate, reflecting disciplined working capital management and the high quality of our earnings.

Turning now to my second message, our new attractive guidance framework. For 2026, we are guiding an EBITDA of EUR 9.4 billion to EUR 9.6 billion and an adjusted net income of EUR 2.7 billion to EUR 2.9 billion. For 2026, we expect a broadly stable EBITDA development. In the Energy Networks segment, continued investments into the regulated asset base will be largely offset by cost for further growth in our Networks business.

Our Energy Retail segment is expected to remain broadly stable at EUR 1.6 billion to EUR 1.8 billion with operational improvements, including increased stabilization of our procurement, largely offset by the structural deconsolidation of one of our participations, moving it to at equity accounting.

In Energy Infrastructure Solutions, continued investments are expected to drive earnings growth in 2026. This development feeds through into our adjusted net income. Looking out to 2030, we expect our underlying earnings to grow by more than 6% on average per year. In absolute terms, that means adjusted EBITDA increasing over EUR 3 billion to around EUR 13 billion by 2030. Over the same period, we expect our underlying adjusted net income to grow at the same pace by 6% per year on average. This takes us to around EUR 3.8 billion by 2030, an increase of around EUR 1 billion.

Let me now outline how each of our 3 business segments contribute to our growth story. In Energy Networks, we are stepping up investments in all our markets, which translates into underlying EBITDA growth of around 6% per year to 2030. Germany is by far the largest contributor, driven by continued investments in the power RAB. In addition, Sweden and Czechia are key contributors.

In Energy Infrastructure Solutions, we expect to see a CAGR of 12% by 2030, turning into an EBITDA of approximately EUR 1.1 billion. The largest business drivers are B2B solutions, including on-site generation, battery opportunities and district heating and cooling.

In Energy Retail, we expect to ramp up our EBITDA to EUR 2.1 billion by 2030. The growth is primarily driven by innovative products such as flexibility and e-mobility offerings as well as higher efficiencies stemming from the centralization of our procurement and further digitization. This translates into exceedingly strong cash generation. By 2030, our Energy Retail business is expected to generate a cash contribution of around EUR 7 billion, almost 3x what we plan to invest. Therefore, Energy Retail plays an important role in funding our investment program.

Let me now outline the CapEx envelope that underpins our growth story. Since our strategic repositioning in 2021, we have consistently increased our CapEx envelope, and we are doing so again. We raised our CapEx to EUR 48 billion for the 5-year period to 2030. We have rolled forward our CapEx for another 2 years. Our CapEx amounts to around EUR 10 billion per year in 2027 and 2028. We will maintain this level in 2029 and 2030. This translates into a 10% power RAB CAGR in Germany, reflecting investments of more than twice our depreciation. This also increases the power share of our total WAP from 88% in 2025 to 94% by 2030.

This expansion is fully aligned with our strict value creation framework, ensuring that each segment delivers a business-specific value creation spread. By far, the largest portion of the investment budget, around EUR 40 billion is allocated to our Energy Networks business. Most of this capital is allocated to power grids.

In our Energy Infrastructure Solutions business, we plan to invest around EUR 5 billion over the 5-year horizon. These investments are mainly allocated to our district heating network, our industrial and commercial customers for decarbonized energy and heating solutions as well as to opportunities for data centers and batteries. Within Energy Retail, our investment focuses on innovative products and -- advancing our digital capabilities to service our customers in an efficient way.

Let's move to our financing outlook. Our balance sheet capacity remains unchanged at EUR 5 billion to EUR 10 billion, even with a higher investment budget. We retain flexibility for selective value-accretive portfolio opportunities while benefiting from high cash contributing of our energy retail business. Hence, our strong balance sheet provides a solid foundation for additional investments while keeping a prudent risk buffer to preserve financial resilience.

As Leo mentioned earlier today, the growth opportunities we have are robust and long term, particularly for power grids. And we stand ready to invest more, considering what is still necessary for a successful energy transition. We are operationally and financially prepared to increase our CapEx run rate in the outer years and invest an additional EUR 1.5 billion to EUR 2 billion per year, considering what is still necessary for a successful energy transition. But for that, we first need the necessary regulatory visibility for improved RP5 parameters.

This brings me to my final message. With our new attractive outlook to 2030, we are fully committed to deliver sustainable earnings growth of more than 6% per year and grow our dividend up to 5% per year. And we have optionality for more based on the structural growth of power grids that is still needed. Our combination of organic growth alongside growing dividends offers attractive long-term value for our shareholders with an opportunity for more.

And with that, back to you, Iris.

Thank you, Nadia. And with that, we will start our Q&A session. Let me remind you all please stick to 2 questions each. And the first question for today comes from Wanda from UBS.

Hopefully, you can hear me. Two questions, one for Leo, one for Nadia. Maybe let's start with Leo. Today, at the Bloomberg interview, you said you are quite confident that you will get a regulation that will allow high CapEx program in Germany. But at the same time, you didn't really raise your 5-year CapEx program. So what makes you confident? How the talks with the German regulator have been going so far? And when do you expect to have enough visibility to basically make up your decision on the financial headroom?

And the question to Nadia, could you please talk about the assumptions behind your 2030 German network EBITDA? What allowed return did you assume? And what is the cost outperformance cut versus today that you assume in your 2030 numbers?

So there is no new information that has emerged over the last months that has changed our position. So the confidence that I've shown is just a repetition of what I've said in the past. And what I also tried to say this morning it's absolutely clear that we have a structural shortage of infrastructure. It's actually not a German issue, it's a European issue, it's actually even in the U.S. It's a general issue. It's number one.

Number two, bottlenecks in infrastructure are extremely expensive, and we see that they are especially expensive in Germany, but they're actually expensive all over the place. The third one, the acceptance, the fact that the energy transition becomes a business place -- business case depends on somehow solving this structural need.

And therefore, like I think it has been acknowledged now by everybody that we need more infrastructure. It has been acknowledged by everybody that we need private capital for that. And therefore, I'm saying, well, then I'm confident that there will be a regulation in place that allows for private capital to be invested via E.ON into infrastructure. And therefore, I'm saying, I can't see why we would not get something like that with all the ongoing discussions. But clearly, it's not that I can point to a big revolutionary development since we last time met.

Now on the question until when will we have visibility? This depends on the news that we get. Like this year, we have RP5 in Germany, we have RP5 in Sweden. But in Germany, actually, we have the OpEx adjustment factor we are expecting eventually, let's say, in the first half, some news what it really is and what it could mean so that we could potentially quantify it. We are expecting regulation on the gas side that would give us potentially a cross read. And we are expecting then the OpEx regulation in the next year with the cost base based on the cost audit that's being done right now. So it depends a little bit on the news that we are getting in the next -- let's say, in the next month.

Yes. And regarding the assumption that we took, we -- please understand that we not disclose the single individual regulatory parameters. What we say and what we have said in the past, our goal is to reach our value creation spread of 150 to 200 basis points ROCE over WACC. And we would assume that we have included that. You can assume that we have included that in our guidance. Yes, full stop.

So in that case, can I ask another question because I didn't really get anything about the 2030 German network EBITDA.

Yes. So again, when it comes to the 2030 EBITDA, we are disclosing at this point in time that our overall networks result is at EUR 9.8 billion as long as I remember that correctly. And we are not disclosing what share of that is now within Germany or in the international business. Because if we were to do that in the end, we would sort of give -- I think we are giving quite some insights, but we don't -- also in the past, haven't given the further drill down into the subsegments.

So you can't disclose the allowed return, which was baked into Germany in 2030?

So what we are saying is our goal is that we aim to get the same value creation spread the 150 to 200 basis points. And our expectation is that all our Networks businesses live up to that.

Thank you, Nadia. The next question comes from Julius Nickelsen from Bank of America.

Yes, I have 2. And the first one is kind of a follow-up on the timing. So as you mentioned, there is the OpEx adjustment factor and then there's the gas draft determination. But let's assume those come out and the outcome is favorable. Is there scope to already do like a CMD or so after the summer to raise the CapEx? Or do we have to wait until basically 1 year, full year '26 until there's another opportunity for you to fully open the CapEx envelope? That's the first question.

And then the second one is maybe a little bit cheeky, but if in your absolute bull case scenario, if regulation comes out, how you like and you can raise the CapEx, do you feel comfortable to give any kind of indication where EPS in 2030 might land in that scenario? That would be quite useful.

Yes. So you rightly pointed out that timing is, let me call it a bit path dependent. And I would, at this point in time, not like to now say it's like let's revisit on the whatever day X in months Y because then we think the timing is too unclear. I would say the following. If we only get good news, then we will react to that. If we only get bad news, then we will react later to that. So sincerely, I can't give you a specific timing right now. This is in the hands of the regulator who now needs to first give us additional information so that we have something additional to say.

And on the bull, I don't want to speculate now on bull, because I think we have given you a guidance what we expect. If -- and if the word would be a paradise, I would try to figure out what makes sense for my customers because then I would know that if I do something which is beneficial for my customers, it will be honored that I have done it. If I do something which is stupid for my customers just because I got a lucky strike somewhere, this will come back at me. So we more have a perspective to do. We do what is needed, and we are confident that the regulation will be good enough. We don't bank on bull's cases.

Yes. Maybe adding to that, we have deliberately chosen that we just keep our annual run rate of CapEx at this level overall, E.ON, approximately EUR 10 billion from 2027 onwards because we have got very positive signs from politics, from what is needed from macroeconomic, also what regulator has been saying that he appreciates that there are higher returns and higher revenues needed, but then we haven't seen anything black on white. And that's why we neither increased our run rate nor decreased our run rate. And you need to bear with us, of course, as we don't know anything more, what we also said in Q3 that we would have hoped, we would know more by this time, but we don't. We cannot also now not guide for a specific EPS increase. On top of what we -- we would say we've already demonstrated, of course, quite a significant EPS increase with a very attractive 6% CAGR up til 2030.

And the next question comes from Alberto from Goldman.

I think you already provided quite a good picture, so I'll avoid talking about returns. But I wanted to ask you one point on the assumption of the power networks, which is maybe 2 parts. The first part is, can we get a feel for how saturated is the German network? We are hearing that network is at capacity around Frankfurt. You're talking about all this gigawatt of data center demand. So do we know with this investment plan, what is the saturation level today? Is it running at 90%, 95% capacity? What will it be in 2030?

And as a second part on the assumption, would you be able to tell us of the CapEx upgrade you presented today, how much is perimeter, how much is equipment cost inflation and how you think about that?

And the second question is actually totally different. Your supply...

I would say it's the third one.

Should I stop here, Iris? I will face the police.

No, no, no.

Sorry. Sorry. Sorry. I will not do follow-ups. So in terms of cost savings, your supply retail business was originally created as a people business, but we are seeing companies putting out there recently big cost savings program, AI-driven facilities and software, natural attrition. So I wonder, is this target including a significant cost reduction effort? I noticed in your guidance, your holding costs are going down quite a bit, but I suspect there's much more to go. Am I right?

Okay. Since the second question was the third one, I'll give a very short answer. Cost reductions are baked in. But I'm sure we will actually see much more opportunities for much further cost reductions, which we might not have baked in. But on the other side, we will see also pressure, which we might not have baked in. So in that sense, AI will change, will clearly change the retail business. But I think that's maybe a good point to make. It's like your colleagues came up with the Halo suggestion.

I really think that the advantage which we have in the majority of our business in the ICE and energy networks is actually that we can't really be disintermediated because the disintermediation of the physical grid doesn't work because it's a physical grid in the end. So AI will completely change. Also ICE business will completely change Networks business, the way we run our processes, but it will not disintermediate us. So that's maybe a nice point to make here.

Now on the add capacity, I think overall, we are in a better situation in Germany than a number of other markets, which we observe across Europe. We have taken note of the load, for example, in the Netherlands or we have taken note of what Endesa presented yesterday or what we have seen in the U.K. I think we are not there yet. But it's clear, whilst we had massive bottlenecks on the TSO level in the past, these bottlenecks are trickling down into the -- from the extremely high voltage into the high voltage and where we have solar also in medium voltage, not yet on a kind of like complete level as in other markets, as I just mentioned.

Now 2 comments. I think we can't give a general statement. It really depends on the region. For example, in Eastern Germany, where we have massive additions of renewables, we are in many places, clearly at capacity already. In others, this is different. So we have to look at it on a regional basis. That is number one.

Number two, it will depend massively on the upgrade, the revision of the grid connection regime, which is under current -- under discussion right now in Germany. I would say if the proposals which are on the table right now for a new grid connection regime, use it or lose it, something else than a first come, first serve, if that materializes, we can achieve much more with the same capacity.

Whilst if we do not change the current picture, then I would think that the grid would run to full usage -- to being fully blocked very fast because we have, let's say, a speculative run for connections. So it depends a little bit on the political debate. And on the inflation and growth, we are continuously looking at that. I'm not sure, did we do in the context of the budgeting a new exercise then? Or is it still the 1/3 or whatever inflation that we...

I think there was more that what we communicated like 1.5 to 2 years ago, when we look now at the higher level, we say from this level that we have been communicating our price inflation is at this point, moderate and it's primarily volume growth. But we, of course, as Leo has said, we have seen a step change of higher inflation when we last spoke about that.

Thank you, Nadia. With that, we come to the next question. Thank you, Alberto. The next question comes from Pavan from JPMorgan.

I have 2, please. So firstly, and it's following up from Julius' question, Leo, but maybe in a different frame. Can you give us an indication of the quantum of which you think you can accelerate the CapEx to 2030? And should we be taking the EUR 5 billion to EUR 10 billion headroom as an indication of the upside you can see there? That's my first question. And secondly, related to that, are you able to talk about or give investors comfort on your readiness, as you mentioned in your opening remarks, to accelerate on CapEx? Do you already have the supply chain capacity that you need, your workforce? I appreciate the acceleration is not coming today, but given it's a big focus, I would appreciate some color around that.

Okay. So I'll take the second one, and then Nadia will follow up on what you said in your speech on the additional quantum. So I would say, first, E.ON, we have put in the last 5 years, a big focus on operational excellence. I tried to say that in the speech. So -- and we are -- we have been building up a workforce. Again, in the last year, we had a net increase of the workforce. So we have built up in the networks around 7,000 additional people over the last years. So we have the workforce, number one.

Number two is we have the supply chain contracts for the critical equipment. I cannot exclude that we will have a bottleneck here or there. But I think actually, overall, for the critical components, switchgear equipment, power electronics, transformers, cables, we are actually well set up. So we should be able to manage that.

On the permitting side, we would need faster permitting that would be -- but we are -- actually, we are set up for the 8-year processes. If we would get an acceleration, we should have absolutely no problem there as well. And on the digitization side, I think we have now pushed the envelope really with the transformation programs that we have done. By the way, the last point is the one where I usually never get a question is the one that I find personally the most challenging one to deliver large-scale IT transformations at -- on time, on budget.

So having said that, with the confidence that I have is we have achieved it year-over-year over the last 5 years. We have always achieved what we said that we would do with a few small exceptions from which we have learned. This year, we have achieved every single operational target that we have set for ourselves. I have absolutely no reason to believe that my organization would not be able to repeat that going forward also with a higher volume. But again, it doesn't come by itself. It's the result of very hard work on all of these topics. I hope that gives you enough color. We can obviously detail that in more afterwards. So Nadia on...

Yes. So regarding the potential for additional CapEx. So when you look at total envelope being like easy to remember, EUR 10 billion per annum overall E.ON CapEx, out of that, approximately EUR 6.3 billion is for Energy Networks Germany. Out of that, approximately EUR 5.3 billion is dedicated to WAP effective -- power RAB effective Germany. So if you then take the EUR 4.3 billion, we would have an additional EUR 1.5 billion to EUR 2 billion per annum, where we could invest more at the -- in the outer years when we look at our network build-out plan that we did in 2024.

Of course, these network build-out plans are, of course, also -- we will have -- we see no new network build-out plans, but the data that we've got compared to this network build-out plan that was issued in 2024, that would be this EUR 1.5 billion to EUR 2 billion more in CapEx from -- in the outer years.

So operationally, we can. And financially, it depends on regulation.

Thank you, Pavan. With that, next question comes from Harry.

This is Harry Wyburd from BNPP Exane. So 2 ones for me. So first, can we focus a bit on this grid connection regime reform because it's actually quite significant and it's actually hit seemingly quite a lot of resistance from certain political parties and lobbies. So if you -- maybe you could just remind us a little bit for those who aren't familiar, what has been proposed here and sort of locational reform and so on. How do you think that's going to end? And is that actually going to impact you because it could theoretically shift around where you're investing? And is that something that feeds into your CapEx deployment or operations and so on?

And then the other one is on affordability. So we've had all these headlines on carbon, all these headlines on EU power market reform. I guess you're, in some ways, a sort of neutral observer here given you're not exposed explicitly to power prices. So I value your independent view on how you think this is going to end. So do you think we are going to get power market reform. Is that going to cut baseload power prices in Europe? And do you see this as something that's actually relevant for you if we end up with lower electricity prices via regulatory change and that triggers higher power demand?

Harry, good seeing you. Two tricky questions as a price for seeing you. Now on the grid connection regime, first, let me just repeat. What we're currently seeing in terms of request is completely unsustainable. There's no question. We are seeing connection requests at E.ON only, we actually published those numbers, 500 gigawatts for batteries, 70 gigawatts for data centers. It's just absolutely unfeasible that we can deliver on that.

Even what we only agreed to deliver is already stretching the limits in the envelope massively, 12 gigawatts on batteries, 16 gigawatts on data center or the other way around, I always mix, that doesn't matter. 28 gigawatts data centers plus batteries in 2025 only, plus 20 gigawatts, nearly 20 gigawatts in renewables. So there is a limit for that.

Now what we are seeing is, we clearly see that there is speculation for grid connection because grid connection is scarce, so it must have a value. If I can secure it, then I have something which I can sell expensively. And since we have the first come first serve and no use it or lose it, actually, this is pretty cheap speculation. And therefore, I think something needs to happen. So this grid package, I think, is just a reaction to an absolute unsustainable situation that needs to be changed.

Now for us as E.ON, it's like don't we -- I mean, it's like if we don't change it, we have to invest like hell and if we change it, we have to invest like hell. So it doesn't really make a difference. But it makes a difference whether we can actually connect customers. And what I'm really afraid of, if you ask me what's the biggest impact of E.ON is that the biggest impact on us would be if we don't get changes and we need to tell consumers that we can't connect them because the grid is full with solar farms, which we have to redispatch.

That would make no sense. And that would be then very detrimental for our perception. So this is what I -- so I'm not concerned financially because I mean it's like the CapEx opportunity is just too big. But I'm concerned that we don't do an efficient energy transition and then we get an affordability backlash at the whole energy transition. So that's the point that I would really like to make here.

Now what is materially in the package? I think you can differentiate 3 buckets of discussion. One bucket is, should we philosophically change the approach, not the first come, first serve, not -- should we introduce something like use it or lose it. And I think there is broad consensus that something needs to change in that direction. That's not contentious. Then the second one is we have many innovations that we could do to just be more efficient in how we connect, for example, renewables. We have technical innovation. That's not contentious either. It depends what the regulation we do, et cetera.

For example, do we get combined connections between solar and PV? Do we -- your 100 megawatt of PV, do you always get your peak or you get 97%. So there are technical details. And then there's a third one, which I would call how do we achieve locational signals so that the expansion of the feed-in happens not in grid-constrained areas. That's one really contentious point because obviously, the renewable players, especially renewable players here have a big interest in getting only locational signals that they can calculate and which don't bite them too hard. But if they don't bite, as we say in Germany, then they are meaningless. So -- and that is now depending on the details.

If you ask me what's going to happen, I think bucket #1 is going to change. Bucket #2 is going to change. Bucket #3 is something is going to happen. Whether it's going to be enough, we will see from the discussion. But I think it's absolutely the right discussion that we are having at this point in time.

Now on the switch, that was regulation on grids. Now on the wholesale power, we obviously have looked -- I have also looked with interest at what was proposed in Italy or what will happen now in Italy. So I'm certainly not the best experts to talk about that. But actually, I would say it's not an economic consideration which has taken place. This is a political -- these are political actions. You are trying to achieve somehow a politically -- a target which you see necessary politically and then you just taking whatever tool works.

I personally think that marginal pricing and the pricing is coming from that will be needed, but the position is weak because we know that if we go to 300 gigawatts of renewables in Germany, marginal pricing won't be the one that is going to incentivize investments anyway. So there will be -- there will need to be a change in the power market design. But what we see here is not building something which is sustainable in 2050 in a 100% renewable world. What we're saying here is a political intervention to achieve a political goal.

Whether this is done efficient? I think the only debate that you can have is, is this more or less efficiently, but I think it's inevitable that we will see this more and more. Personally, I think the discussion will never go away on market design. But luckily, I'm not in this commodity volatile business on the generation side. For me, regulation on the grid side is already enough.

Okay. Thank you, Leo. With that, next question comes from Deepa from Bernstein.

So I had 2 questions. One on the data center opportunity. Can you quantify how much of the EUR 40 billion network CapEx is for connecting data centers? Just trying to get a feeling for how meaningful it is or it is not? So that's the first question.

And secondly, maybe moving away from Networks. Your Customer Solutions business, you've had ambitions to improve your revenues from selling solar panels, batteries, maybe exploiting flexibility. I wanted to check how that development is going. Are you seeing the necessary uptake from consumers for these low-carbon solutions? Is it ahead of plan, in line? Just directionally, how is that going? I know it's a much smaller part, but obviously, you are projecting earnings growth in that business to 2030, and I'm assuming that this would be a part of that. So those are my 2 questions.

I cannot quantify, maybe Nadia can, but I can't quantify how much of the EUR 40 billion is data centers. But I would say there is a remarkable difference between the data center boom in the U.S. and in Europe. So in our case, the infrastructure growth is really driven by multiple simultaneous factors that we're seeing, truckloading, data centers, renewable connections, heat electrification. So the growth trend is extreme -- or batteries and so on. So the growth trend is extremely robust. because it's driven by multiple factors. And we have not quantified how much of the million goes into batteries, into data centers and into renewables.

I think the situation is different in the U.S. where data centers -- in some parts, at least must be the overwhelming driver. So sorry for that. On the Customer Solutions side, I think I can answer it. So yes, we have combined the flex, let me call it, non-commodity retail products that you alluded to. They're part of our retail business -- customer solutions business, I would say. We are seeing a tick up. We are seeing a nice tick up. It's number-wise irrelevant. You said that yourself rightly so. And we would like to see even more aggressive tick up operationally. There, we are actually readjusting every month, so to say. But it's moving.

Thank you, Leo. With that, we move to -- we still have quite a few hands up. Maybe if someone just has one question so to get everyone the chance to actually still ask the question. Louis from ODDO is the next.

Actually, the second one will be very fast. So I think it's going to be okay. So the first one, regarding the capital allocation, I was wondering, in case it's not going exactly in the right direction for you regarding the CapEx expansion, do you have any leeway in your capital allocation to eventually adjust and increase your CapEx envelope in the other geographies? Or eventually, would you consider higher payout or share buyback program in order to allocate maybe better your current financing capacities? That would be my first question. How would you do in a worst-case scenario?

And the second question, which is quite fast, I guess, is regarding the underlying assumptions that you could have taken in your cost of debt by 2030. When I look at your guidance for the EPS, the EPS does not look highly demanding considering the EBITDA. So I was wondering if you were taking into consideration some increasing interest cost of debt in your assumptions for 2030.

I take the first one. So we have a clear plan A, and we are pursuing this plan A. I don't want to speculate on a plan B.

And as you know from us, we are always committed to value creation and to balance sheet efficiency.

So I'm sorry, that sounds like now we don't want to treat you badly, but it's really as short and crisp.

So the second one was cost of debt or sort of why we didn't increase the dividend?

Cost of debt.

Cost of debt assumptions, higher interest.

Yes. On the cost of debt, we have -- when you look at -- we have been just issuing some of our new bonds at the beginning of the year. And when you look at that, we had an 8-year bond, we had a 12-year bond. And if you combine the 2, they were of an average of 3.7%, that is sort of actual numbers we had. I don't know, I think, 95 basis points credit spread on the 12-year duration bond, that is sort of one sign of guidance that I can give to you that also, I think we are communicating later in our pack some of the maturing bonds.

So it's fair to say, as you would anticipate that some of the very low interest bonds are maturing up until 2030 and that need to be then refinanced at these levels that we have been seeing now in January this year. And that is also, as we have been highlighting, when you are confronted with a cost of debt for existing assets, which is just backward-looking 7 years and includes the low interest years, then of course, you cannot assume that you can still refinance at these low levels because everybody of us would love to still do the -- buy a house and finance it on the terms of 2020. Unfortunately, that's not possible. So I think that's kind of the indication that I can give to you.

Thank you, Louis. And with that, we move on to Rob from Morgan Stanley.

I have one question. We've spoken a lot about the regulatory terms to increase CapEx and guidance. But could we just dive into specifically which areas are you looking for from the regulator to improve versus the rest of draft materials we got towards the end of last year?

I think, Rob, there is something -- one of that is what we have just discussed, i.e., being the cost of debt, both the level and also the fact that there is no mark-to-market for the cost of debt on all those assets that are built up until end of 2026. That's something where you cannot refinance at the levels in the market even as we do it in a very proficient way.

Second one, I think we also debated that in this round when it comes to cost of equity, there is just some high-level explanations. We don't have clarity yet. Also this look-back period for the risk-free rate is important. MRP, even if we are going to a higher level, where we appreciate the arithmetic mean you can see that the market clearly demands an MRP of 6% plus. And there, we are still quite a gap apart.

And then there are quite some other elements also regarding the benchmarking that are open and as Leo has just said, so far, we only know that there will be an OpEx adjustment factor, but that's about it. There hasn't been any specification how that's going to work. In principle, this is something that we clearly value and we are welcoming that this has been appreciated that when you grow your CapEx, you also, of course, will grow your OpEx. But so far, we don't know which kind of magnitude this is going to have.

Thank you, Nadia. With that, we move on, thank you, Rob, to James from Deutsche Bank.

I've got one -- kind of one straight two questions. One question and clarification. So the question is on the benchmarking actually, the efficiency assessment. I think you talked about in the past as being quite tough or certainly getting tougher than it has been in the past, but then we had some new proposals come out before Christmas. So I was wondering whether you could just give us an update on whether the proposals there have moved in a more positive direction or whether you still think they're very challenging.

And then the clarification is just on the timing. So obviously, we've got the paper on the OpEx adjustment factor and then the determination of the cost of capital for the gas networks. I think you mentioned you'd have visibility in the next month. Was that for both of those or just for the OpEx adjustment factor? Because I think the paper on the OpEx adjustment factor is due fairly soon, but it was less clear when the cost cuts of gas was due.

So I'm always careful to say it will come out in March because my experience is then it turns out April, and I need to explain all the time where it was in March. So I would say OpEx adjustment factor first half, the gas side, second half of the year. So -- and rather go to the back end and be surprised if it happens earlier. So that on the timing.

Second, in the final papers, there were no real substantial improvements. Therefore, the criticism on the benchmarking is still very clear. We actually have seen that it will be harder to achieve top efficiency, which is okay. That's fine. That's the challenge that the regulator should put in front of us. But we have still seen that redispatching costs are included in the operational benchmarking as influenceable cost.

And since when it -- I mean, clear, 90% of the redispatching costs are with the TSOs, but out of the 10%, which are with the DSOs, we at E.ON get 90%. Why? Because we are the rural guys, which are connecting the renewables and basically putting redispatching into the picture just punishes exclusively E.ON, which has done the most investments, kind of like to achieve an energy transition. I repeat my word, 1/3 of the networks, 70% of the wind, 50% of solar, and then we get redispatch -- and then no agreement on localization signals and then we get the redispatching cost allocated on top of us. Still the same criticism. Really no changes in the final paper versus what we explained to you in the second half of last year.

Thank you, James. And with that, we move to the 2 last questions, while the first one comes then from Ahmed from Jefferies and then Piotr from Citi. We'll then close the call.

I guess just a very quick follow-up question. You just mentioned -- gave us some sort of time lines, right? You said the OpEx adjustment factor and I think it's the draft for the gas distribution that you mentioned. Are there any other data points or milestones that are required from your side to get the clarity? Or are these the 2 critical data points? I just want to make sure sort of just for completeness that if there is a full -- there are other elements as well that we are just aware of what other regulatory updates are required. So that's my first question.

My second question is on retail. This is a follow-up to an earlier question. So retail, if I look at the last couple of years of results, it sort of hasn't really delivered much growth, and you are guiding to growth going forward. I just wondered if you would explain a little bit -- you already talked a little bit about the drivers, but a more profile of this growth as to where the growth will come through. Obviously, you're sort of talking about a sort of flattish profile to 2026. But do we expect to see this growth profile already in '27? Or is this more back-end loaded?

Yes, I'll take the timing question. So I understand from all of your questions that you would ideally want us to give a precise time line when is what materializing so that we can give you a further update. But -- I mean, this is really where I would need to say you need to raise those desires somewhere else, I'm afraid. I can only repeat what I just said. It depends a little bit what information we got.

Look, last year, I told you, I am confident about the outcome because I still believe that if something needs to happen, eventually, it happens because the alternative is just unattractive. So I truly believe we are going to get a regulation which is sufficient to make the necessary investments because the investments are good for Germany, good for our customers.

But having said that, it's kind of like I did not get anything positive last year that actually really helped me to say, I -- now look at this. This is why I'm right to believe that. Now if the next news that come out would clearly show in the direction that, let me say, a basic optimism is okay, then I can be bolder going forward and say, look, this works out, it will come to the right result. Let's make a judgment call.

But if the same thing happens this year that happened last year that I get negatively surprised, like, for example, by this redispatching cost, which you all know annoyed me like hell, if something like that happens again or if whatever details come out on the OpEx adjustment factor make it irrelevant, then it's kind of like then I don't have something. So it's a bit past dependent. But clearly, like the people who can influence that time line are less us, I'm afraid. We can only do operational great work and show that what we are doing is beneficial for our customers and then expect that others will honor that.

Yes. So coming to your energy retail question. So when you refer back in the past years, there were past years also from the energy crisis where we took on a lot of risk when it comes to revenues. So we had high prices. And now we have seen some normalization. We have still stuck to our 3% to 5% B2C margins. But of course, when you had a far higher revenue level, then that sort of meant that the absolute amounts reduced. So that's basically the reduction that you have been seeing coming from -- when you take sort of 2022 and '23 as a basis here. When you sort of go further back into the year 2020 or '21, you see that we've actually seen some significant increase also in our energy retail business.

Second, I guess you are less interested in the past, but more into the future. We're very much aware that we are projecting stable EBITDA from 2025 to 2026. There's one technical effect in there, i.e., we are deconsolidating one of our entities and the equity contribution to that is then because of the joined up grid and retail business, that's now portrayed in the grid business, but going from EBITDA to only a net equity contribution.

And then the second one, so we see some operational growth, but it's fair to say that some of the digital foundations that we need for future flexibility products and the ramp-up that we are seeing will be also late in 2026. And then when it comes to how near term the progression is, I think we have been guiding to an energy retail business in 2028. And then we see some further increase in 2030. So as you say, first stable, laying the foundations, and then we would expect to see some increases in 2027 going forward.

And with that, we come to Piotr with the very last question then for today. And obviously, we're happy on the IR side to follow up on any further questions that you might have. Piotr?

I have just one big picture question to Leo actually about -- how do you think about the grid fee structures going forward in the context of affordability and the need of CapEx, in a sense that a lot of the growth comes from the data centers and therefore, the cost when it goes into the RAB, the connection it's being socialized and therefore, all of the consumers have to pay for it.

Likewise, there are a lot of consumers that really have a lot of self-consumption and also pay less than for the infrastructure. How do you think -- in the context of affordability, would charging for infrastructure differentiated prices to different consumers would not be a solution?

And likewise, when you think about the investments, there are certain investments like releasing redispatch costs and so on. So what is the return on the investments from the consumer perspective on this extra EUR 5 billion to EUR 10 billion CapEx that you propose to the regulator? Because if it's about the data center connection, I agree why the regulator may not be willing to give you the higher rate. But if it's about really saving cost for consumers, then he should be more than willing to spend -- for you to spend this money.

Yes. I think actually, there is a misperception on the impact that data centers have on consumers. If -- now we take the German example and then we -- like in Germany, you have actually -- you pay grid fees and you can pay a lump sum for your connection...

Construction grant.

Construction grants. That's the word, okay. So you have construction grants and grid fees. Now data centers, the overarching target is to get fast access. So they are perfectly fine to pay high construction grants. That's number one, which means actually that the cost really socialized in the grid fees are not that big. Second is they are actually pretty big consumers. And we have energy-related and capacity related, I mean, fees in Germany.

So what happens actually if a data center gets added into your DSO area, you as a consumer, a B2C customer, you see lower grid fees because then the same -- basically the same cost base is spread on a larger volume. So -- and that's actually the whole way how the energy transition can work. We need to increase electricity volumes so that we can allocate the higher cost base on a higher volume basis. And so specific costs stay constant or even decline. So data centers in a DSO area reduce the grid fees.

Now on the generation side, they need additional power stations. That's what's being discussed in the U.S. right now. Obviously, if you have like in Tennessee, a 5 gigawatt, whatever data center, you don't want to put that into the rate base and then have the consumers pay for the 5 gigawatts of additional generation capacity. But if the data center comes with its own PPAs and new assets, then it's actually fine. So in our case, data centers in Germany would reduce the grid fees and actually would be beneficial.

Now on the wholesale market side, they would need -- they would require more baseload capacity probably, which is why we think generation capacity needs to be added. But so for us, data centers are beneficial for us at E.ON, data centers are beneficial from an affordability standpoint. They make our life easier.

Thank you, Leo. Thank you, Piotr. With that, we come to an end. Thank you all very much for participating and the interest in E.ON. And if there's anything else you would like to discuss, the IR team is happy to follow up with you. Thank you, Leo and Nadia. With that, I close the call for our full year '25 presentation. Take care. Bye-bye.

Thank you.

Bye-bye.

Good morning, ladies and gentlemen. I would like to welcome you warmly to our annual press conference. I would like to welcome all journalists here in the room. Very happy that you have come here despite the difficulties of the bridge that is blocked and all other traffic difficulties. I would like to also like to welcome all journalists in our virtual room.

Our CFO, Nadia Jakobi; and CEO, Leonhard Birnbaum, are here. As always, both of them will give you an overview of the past fiscal year in the next 30 minutes, and then you'll have the opportunity to ask questions.

And with this, I'd like to pass the floor to Leonhard Birnbaum. Go ahead.

Lars, ladies and gentlemen, good morning from me as well. I'd like to welcome you to our annual press conference for fiscal 2025. my text says 2025 was marked by economic and geopolitical uncertainty. That hasn't improved in 2026. So we will have to live with that probably as in previous years, unfortunately, this uncertainty has reached a new dimension and much of what underpins international corporation and creates stability is now being called into question. The confidence in reliability and predictability has been lost, but these developments are beyond of what we can control at E.ON.

Nevertheless, what we can do as a systematically relevant company is living up to our responsibility and help make Europe strong. And therefore, I'm happy to be able to say that E.ON has concluded fiscal 2025 successfully. We are delivering financially on the promises of our growth strategy. With an adjusted EBITDA of EUR 9.8 billion and adjusted group net income of EUR 3 billion, we have fully met our guidance, and Nadia Jakobi will comment on the details in a minute.

What is even more important to me is that we have not only delivered financially, but being the playmaker of energy transition in Europe, we delivered operationally as well. And in particular, we continued to systematically implement our investment program. In 2025, we invested EUR 8.5 billion in our company's future viability and that's in Europe's energy transition in products for our customers, in security of supply and in the modernization of critical infrastructure.

This performance and this increase, EUR 8.5 billion and EUR 1 billion more than last year is not automatic. It's the result of clear priorities, a high level of operational discipline and an organization that remains fully capable even under pressure. And it's above all the result of our employees' hard work and dedication. Day in, day out, they ensure we make energy work reliably, safely and affordably. And for this, I'd like to express my sincere thanks to them.

Today, ladies and gentlemen, when we talk about the energy transition, it's no longer about the vision of the future. It's about implementation. It's about networks, connections, digitization, resilience and secure energy. It's about innovative products for our customers so they can participate in the energy transition. And E.ON, we can definitely say that is at the forefront when it comes to implementation. By the end of 2025, about 70% of onshore wind capacity and almost 50% of solar capacity were connected to E.ON's grid in Germany. And this is despite the fact when you look at the length, we only have about 1/3 of the German network. So we have connected more renewable to our grid than others.

The energy transition is taking place in our distribution networks. Just recently, we integrated the 2 million renewable energy plant to our German grid in January, February, I think it was. The total connected capacity of all these assets in Germany, renewable assets, that is, now stands at roughly 110 gigawatts. And it took at least 15 years to connect the first million, whereas the next million took us just about 2.5 years, and we are now seeing the third 3 million in less than 2 years.

This shows the extraordinary pace at which we are developing the system. It's a growth segment. And everything is developing. And this dynamic growth can only be managed if networks are systematically planned in advance, digitalized and industrialized. And that's why we're investing massively to expand and modernize our network infrastructure. And that is also why we are continually adapting our processes and supply chains to meet requirements.

As part of our supply chain initiative, last year, we signed long-term contracts with manufacturers of core components for network infrastructure. This is how today we are already securing our future ability to deliver. And one thing is clear, as the system grows, so does its complexity. Decentralization of volatility, new loads are fundamentally altering the requirements for network control and stability. Despite this, it's no coincidence that Germany still has one of the world's most stable power networks with an average outage of less than 12 minutes per year and E.ON, thanks to our systematic investments in digitalization, automation, system intelligence is making a major contribution.

The journalists who are here today, we will present some of these things to you later. And those of you who are not here today, I'd like to motivate you to come to next year's Annual Press Conference. So we are making consistent investing in system intelligence. We are the leaders in the energy sector. And this is in exotic forms, for example, the -- our rating in the Quantum Innovation Index. E.ON is propelling digitization. One example is a digital twin for our German grid or the installation of smart substations where we can measure the condition of an asset and control it at any time.

By the end of 2025, we have put a total of around 30,000 smart substations into operation in our German network area. And this helps us to control networks in real time, manage load proactively and balance out fluctuations before our customers even notice them. A key prerequisite for our digital infrastructure is the rollout of smart meters. For E.ON, it was never a question of whether we would achieve the mandatory quota of 20% by the end of the year, but rather how we will achieve it. You can see it on this chart here. We delivered even under challenging conditions.

All E.ON units in Germany surpassed the mandatory quota in some cases significantly. Our average rollout rate was 30%. This operating strength is also the foundation for new customer solutions. We develop innovative products that enable our customers to actively benefit from the energy transition. These primarily include flexibility solutions like Germany's first bidirectional charging tariff, which we developed in partnership with BMW or E.ON Home Comfort digital energy solution that automatically optimizes decentralized systems. And outside Germany, we did nice things. For example, in the United Kingdom, we forged a partnership with Usuno, a technology and service platform to better support our customers in their decision regarding the installation of heat pumps end-to-end.

So heat pumps, solar panels, charging solutions and batteries can now be used in their homes. We also help -- our integrated energy solutions also help industry businesses and municipalities to decarbonize. A project like wind heat Ludwigsfelde shows how wind energy can be used to supply heat to a large industrial park and city. So both directly and when there is no heat -- demand for heat, where they can feed into the network. And you can see that on the right-hand side, the planned United Heat joint venture where -- we are connecting German and Polish cities in the Görlitz area to achieve a transnational decarbonized heating solution for both countries. In short, E.ON delivered and we lived up to our responsibilities and whenever and wherever we were needed.

E.ON is one of the largest investors in Europe's energy infrastructure these days. And if we are not even the largest one, the surge in our investments, particularly in our network business, clearly demonstrates this. For the period 2022 to 2026, we plan to invest EUR 22 billion -- this is when I started here, EUR 22 billion and it was EUR 26 billion from 2023 to 2025 and EUR 35 billion up until 2028. And we now plan to make group investments of EUR 48 billion for 2026 to 2030, of which EUR 40 billion will go towards our network business in Germany and abroad. These figures represent a clear commitment.

We deliver and we are prepared to continue making a significant contribution to the transformation of the energy system in the future. But at the same time, investments of this magnitude require the right regulatory framework, including for the upcoming regulatory period in Germany. Our investments must be profitable for them to be financeable. We've made this assumption in our planning and therefore, explicitly subject to our planning to this proviso. After all, sound regulation is a precondition for the necessary expansion of this infrastructure to continue at a sufficient pace in the years ahead.

One central point is affordability determining the energy transition success. E.ON is actively committed to offering our customers solutions that meet their individual needs. I just gave you a few examples, but that alone isn't enough. Last year, Germany's Renewable Energy Sources Act had its 25th anniversary. And during these 25 years, we have seen a huge ramp-up of renewables. And that's why we achieved 58% of the country's electric last year from renewables. And E.ON is proud that our grid infrastructure helped make this possible.

Nevertheless, we made it clear some time ago that the uncontrolled growing growth of renewable energy plants that need to be connected to the network will further drive up system costs for our customers. And this will call into question the energy transition's public acceptance and long-term success. And therefore, I can only repeat what I said 1 year ago at the press conference. The first half energy transition is over and now the second half has begun. And in the second half, we must play a different game than in the first one.

We now need to fully concentrate on continuing the development of the energy system and make it as affordable as possible. Affordability and reliability are on top of sustainability that cannot be ignored. E.ON cannot and will not implement the energy transition without considering the customers' interests and Germany should not advance the energy transition in the long term without considering its citizens' interest and its economy. And that's why it's particularly welcome that the German government has recognized this necessity and is beginning to systematically address it.

I just said it, we need to play the second half differently than we did in the first half, and that means different rules here and there. So what is need -- the energy transition must now become system transition. A demand-oriented energy system planning will be essential. And according to our calculations, there is a savings potential of EUR 15 billion annually. The new maximum must be only as many renewable facilities as Germany actually needs in the years ahead, in line with the development. And these facilities must be integrated in the right places and so that they benefit our customers. And this includes subsidy schemes that need to be systematically reviewed.

Network connections are another area. E.ON has developed a wide range of solutions to make better use of grid capacity and connect system faster. Examples include we have too many requests, which we cannot serve. So we, as E.ON are playing our part, as we already said, 20 gigawatts of renewables last year, 12 gigawatts for data centers and then contracts for large batteries, the 70% gigawatts of renewable did we had that last year as well in 2024 and 2025. We are playing our part, but cannot continue this way because we are coping with the biggest part. So we have developed new concepts as well, feed-in sockets and flexible connections. But our -- the volume of request is beyond what we can deliver.

The Federal Network Agency in its scenario is expecting an actual demand of 41 to 94 gigawatts of installed large battery storage capacity. Yet last year alone, E.ON was able to confirm grid connection request for new storage capacities totaling more than 16 gigawatts. So even if not all of these systems are built, the ramp-up, the way it is now is -- doesn't offer an advantage for our customers. So that means we need a new net connection regime. And for that, we need a reform in various places.

First of all, a new grid connection regime must be created that moves away from the first come first serve principle and focuses on clear criteria, smart priorities and legal certainty for grid operators. And so legal certainties for the operators as well. What drives me personally is that the first come, first serve principle means that we cannot serve demand because we are fully utilizing the node with new renewable batteries. And then later, the investor wants to electrify their site. We have to tell them, sorry, we don't have capacity until next year. That's not acceptable. We need to change basic principle. We need a totally different logic. Secondly, significantly faster approval procedures are needed for grid expansion.

As part of the acceleration of the old traffic light coalition, we also requested that for the 110 kVs, we get the acceleration, and we didn't get it, but we do need it. Otherwise, we can never reverse the bottleneck because building has happened faster.

And thirdly, we need local signals, cost signals that send a steering effect. The Ministry of Economic Affairs and Energy is considering reservation regarding financial compensation in the event of curtailment for renewable energy plants in grid congestion areas. That's understandable. Some sort of instrument is required, and we would then have to look at the details in the future. But without such an instrument, we cannot reserve the -- reverse the bottlenecks. We therefore welcome the fact that the German government is working on initial proposals for reforming the grid connection regime. And it's no coincidence that leading associations representing industry and the data center welcome that and see it the same way we do -- see it.

There's another point, the importance of significant was shown in Berlin as well. Without electricity, people can end up in difficult or life-threatening situations. Allow me to take this opportunity to make 2 personal remarks. Firstly, attacks on infrastructure are brutal act of terror. They endanger human lives. They're inexcusable. And second, if 5 days in Berlin kept us on edge as being very critical, which they were, then imagine particularly today, I mean, yesterday, we had the anniversary of the Russian attack on Ukraine. We need to pause and think about the suffering endured by the Ukrainian people under Russia's terror attack, which is inexcusable. Since they cannot win at the front, they resort to terror attacks. So we must do everything we can to help Ukraine and its people in their fight for freedom.

Now back to Berlin. The right conclusions must now be drawn from the experiences. The Bundestag’s decision on the KRITIS Umbrella Law is welcomed. But at the same time, demands for a completely redundant network infrastructure are neither effective nor cost efficient. The attacks showed that the technical redundancy alone doesn't guarantee resilience. Resilience means designing systems and processes in such a way that they can cope with disruptions or attacks swiftly and recover quickly. And this is where the focus needs to be because there can be no such thing as a complete protection because if we lie on this kind of protection, then we have an issue when it fails and it will fail.

In addition, existing transparency must be reviewed and withdrawn where they could jeopardize the security of critical infrastructure. And it's also conceivable to establish crisis hubs in the various network regions. In any case, we are glad that our E.ON units were able to restore electricity service in Berlin faster than anticipated. The solidarity within the industry was very remarkable. And the corporation showed how important a trustful corporation is for the benefit of our citizens. E.ON stands for reliability towards our customers, towards society and towards shareholders. We invest, we deliver operationally, and we live up to our responsibilities for an energy system. And we are prepared to do that for the future as well.

And I hand over to Nadia.

Well, thank you very much. I would like to also welcome you to our annual press conference. E.ON in the past year, again demonstrated how robust our business model is in a volatile market environment. We further increased our operating effectiveness, continued to purposefully develop our business divisions and systematically raised our investments to a new level. Adjusted group EBITDA was at EUR 9.8 billion, and that was at the upper end of our guidance range and 9% above the prior year. Adjusted group net income rose to 6% to EUR 3 billion.

Let us now take a look at our business division's earnings. The Energy Networks business division was again the main driver of E.ON's growth in fiscal year 2025. It achieved adjusted EBITDA of EUR 7.7 billion, which was 12% above the prior year. This increase was mainly due to the further growth of our regulated asset base as a result of our investments. Our network business in Germany as well as in Southeastern Europe also benefited from higher-than-anticipated distributed volume. Regulatory catch-up effects, particularly regarding network losses in Hungary, made a positive contribution to earnings as well.

Our Energy Retail business division recorded adjusted EBITDA of EUR 1.7 billion, which was at the midpoint of our guidance range. As already mentioned in previous quarters, Energy Retail's earnings performance was significantly influenced by portfolio effects in the United Kingdom, which resulted mainly from a higher proportion of customers with fixed price contracts. Business in Germany improved moderately, although expenditures on digitalization and customer management dampened growth.

Adjusted EBITDA at Energy Infrastructure Solutions was at EUR 590 million and thus slightly higher than in the prior year. The factors contributing to this growth included higher asset availability in the United Kingdom and Scandinavia, increased heating demand in Germany due to weather conditions and further progress in our smart meter rollout in the U.K. The strong demand for our integrated decarbonization solutions from district heating projects and industrial energy infrastructure to local storage solutions was particularly gratifying.

E.ON's investments reached a new benchmark in fiscal 2025. They amounted to EUR 8.5 billion, which was EUR 1 billion more than in 2024. EUR 7 billion of this went toward our network business alone, a year-over-year increase of around 20%. These investments reflect the need to further expand and modernize our network infrastructure and upgrade it to meet increasing demands. We are investing precisely where the energy transition is being decided, and that's in our distribution grids. We also made targeted investments of EUR 480 million in Energy Retail and roughly EUR 900 million in Energy Infrastructure Solutions, both of which are future growth businesses. Investments in the Energy Retail business went particularly toward the Europe-wide expansion of charging infrastructure, new customer-oriented energy solutions and digitalization.

Our investments in Energy Infrastructure Solutions were aimed primarily at developing our decarbonization projects for municipalities and industrial customers. One message is clear. We prioritize investments that strengthen our operating performance and further consolidate our role as a reliable infrastructure partner. Our investment strategy is based on a solid balance sheet and disciplined financing policy. Despite high levels of investment, our year-end debt ratio was 4.4x, well below our upper limit of 5x. The financing of our growth remains long term, stable, predictable and above all, sustainable.

Around 70% of our bond issues in fiscal year 2025 consisted of green bonds. This added value benefits our shareholders as well. It enables us to propose a dividend of EUR 0.57 per share for fiscal year 2025, an increase of 4% year-over-year. This means we are reliably keeping our promise of an annual increase of our dividend of up to 5%.

I'll turn to our guidance for the current fiscal year. Starting in 2026, we are adjusting our adjusted group EBITDA and adjusted group net income to exclude temporary regulatory effects in the Energy Networks business. On this basis, we expect stable earnings at the adjusted prior year level for fiscal year 2026. We anticipate adjusted group EBITDA in the range of EUR 9.4 billion to EUR 9.6 billion and adjusted group net income between EUR 2.7 billion and EUR 2.9 billion. This corresponds to adjusted earnings per share of EUR 1.03 to EUR 1.11.

I'll turn now to our medium-term plan. It demonstrates clearly that E.ON continues to invest and to systematically pursue its growth path. Today, we affirm our clear growth strategy. We plan to invest EUR 48 billion for the period from 2026 to 2030. Around EUR 40 billion thereof will be invested in energy networks and about EUR 2.5 billion in Energy Retail and around EUR 5 billion in Energy Infrastructure Solutions. This plan reflects the increasingly growing needs of Europe's energy system from renewable energy generation, flexible consumers and data centers to storage technologies and industrial transformation.

An important point that Leo Birnbaum already mentioned is also very close to my heart. Our business' ability to help implement the energy transition at the necessary pace depends largely on an appropriate regulation. We need a reliable regulatory framework. We need secure refinancing of our investments. Regulatory requirements must recognize additional demands on the resilience of critical infrastructure. Germany's network connector regime must set more priorities so that resources can be allocated effectively. Our investment plans are, therefore, expressly subject to an economically adequate regulation. Only then can private capital be mobilized on a large scale.

Based on our planned investments, we expect adjusted group EBITDA to rise to around EUR 13 billion by 2030, adjusted group net income to around EUR 3.8 billion and adjusted earnings per share to around EUR 1.45. This growth is no coincidence, but is the result of the consistent execution of our investment program, and it is based on a clear and robust operational logic. All 3 of these business divisions will contribute to it, supported by their operating performance, efficiency and systematic digitalization.

Ladies and gentlemen, 2025 was a year of implementation and progress at E.ON. We delivered operationally, financially and strategically. We further strengthened E.ON as the playmaker of the energy transition as a reliable partner for customers and policymakers and as a sustainable investment for our shareholders. I'd like to thank our teams in all markets. Their commitment and professionalism are the foundation of our success. And I now look forward to your questions. Thank you very much.

Thank you very much, Nadia and Leo. And with this, I would like to open the Q&A session.

[Operator Instructions]

The first question is from Ms. Höning. As always, it's nice. From Rheinischen Post, Ms. Höning.

I have 2 questions concerning the Heating Act, which was adopted last night. How do you like it? And how do you like the green fuel, ad mixtures that may also affect you? And how did the number of electricity customers develop in Germany? And what do the consumers have to expect as far as prices are concerned?

The Building Modernization Act is what it's called now. That's true, has been adopted. It's a pretty big regulation, and we haven't really looked at it yet. And I don't want to give a quick assessment because the details are important. And you really have to understand if a quota is to be applied. I currently do not feel myself able to make an assessment and to be able to tell our customers what impact it may have on them and on us as E.ON. That was really too much at short notice.

And as far as the customer figures are concerned or the price adjustments, our German retail business reduced electricity prices on the 1st of January and gas prices on the 1st of January and electricity prices on the 1st of February, customers will be benefiting from this and customers are at about 14 million. 14 million customer contracts currently in Germany.

And what -- how do you see the future with regard to prices?

Well, as far as prices are concerned, we are known for offering opportunities or the price development of the wholesale markets are passed on to customers at short notice. The price adjustments have just been made, and we are not giving any outlook on future price developments because they depend on the wholesale markets.

We also have some other questions in the room. Let me -- the next speaker will be Ms. Kapp from Handelsblatt and then Natan Witko from Montel, Eva Brendel from Bloomberg. Kapp from Handelsblatt, please go ahead.

Yes. I'd like to hear about your take on the network package. You also mentioned a few points, Mr. Birnbaum. The way it looks at the moment, this first draft, if it is passed that way, would you then be entirely happy with it? Or would you like to see further adjustments?

Well, first of all, it very much depends on the details. I have to say, because the same headline can depending on the details, have a very different effect. So I cannot give you a blanket answer. What I can say, though, and I tried to say that in my speech earlier, what I do like is that the underlying thought has changed. We had first come, first serve, which led to people throwing out their towel to reserve the place, whether or not the place was actually needed or not. So now we are saying we want to introduce a different principle and really give the grid to those who really want it and not speculate. And second -- then actually go ahead and do it and not just hope to set on the connection. So that's a good approach. So the principle is to be welcome.

Second, there -- it contains a lot of creative and innovative approaches. So instruments we should use, for example, technically the sockets and so on. I do welcome all of that as well. Regulation needs to be changed for that to happen. And once this is done, it will provide or make more grid available for less money. And thirdly, we need the localization elements in there. I mean the re-dispatch reservation that's in there needs to be shaped in one way or another at the end of the day. At the moment, it's designed for the new plants that come in congestion areas. So there will be no compensation, which is understandable.

But what is temporary, what does no compensation actually meet? It depends on the detail. So what we need, regardless of how we do it at the end of the day, and therefore, it is dependent on the detail, we need some decision that actually puts flesh on the bones of this signal. If it doesn't have an impact, then, well, it will not change anything. So principally, it's a good starting point. It's a good package, and it's great to have this debate now. It's very much overdue. Whether it turns out to be a nice package or not, we'll have to see.

Thank you, Ms. Kapp. And then Mr. Witko from Montel, please.

I was going to ask about redispatch as well. You just said it was understandable this change. Can you perhaps expand on that because some energy utilities have called it absurd. You're saying, for example, that it will lead to a reduction of investment in renewables and factual split of the uniform German price zone and all of that without any incentive for the construction of grids to reduce the burden on the infrastructure. So how would you respond to these kind of statements?

Well, I think this warrants 2 answers. One, the approach to me, we could have done more there. And the second is the content side of the discussion. So when the voice is loud enough, then a critical point has been found. If nobody says anything, then you need to think. So a controversial discussion is good. So what's the topic here? We have areas in the grid today objectively where we know that when we connect there, nothing is going to happen that will benefit the customer. The only thing that we will do is spend more money on redispatch.

Now you all know the 3 percentage -- 3% for redispatch. So there's a congestion area and the 3%. Let's leave it at the 3%. So what does it mean? That means if you build in that area, then the likelihood that the additional capacity will -- the output of that will not be limited by 3%, but by 30%. So the grid is already full. If capacity is added, then the output will not be just limited by a little. It's wasted. So the additional construction needs to happen where it creates benefit for the customers. That's important. And therefore, from my perspective, it's necessary for us to have this debate.

Now the second question is, all of that wouldn't have been necessary had you built enough infrastructure. I fully reject this accusation. And I've got proof with me, if you like, Back in 2020, we did analysis as to what we need in terms of grids. I can give you a copy of the study later. We did this with French economics in the University of Aachen. We made assumptions about the renewables, PV, et cetera. All of these assumptions were much lower than what we have today. So we were totally wrong with our assumptions. We're well too low. That's statement number one.

Statement number two is we didn't see any data centers. We didn't see any batteries and trucks, we believe would run on hydrogen. Now all of this is on top now within 5 years. At the time, we said the 2 little investment need to be avoided from an overall macroeconomic perspective. So at the time, we were accused of just wanting to build networks to increase cost for customers. And the same people are saying now you should have built new more networks. And even though permitting takes 8 years for 110 kV networks, it's not possible. If it takes 8 years to get a permit, then we cannot fundamentally change anything within 5 years. But again, the forecasts were much lower and still we were said it's not possible. So I fully refute and reject this accusation.

We cannot compensate a build-out that is fully uncontrolled in the market. And those who are shouting most are the ones that profited most in the past. That's always how it is.

Does that answer your second question as well? You answered 2 questions. You asked 2 questions.

Okay. If I can ask another question, but this is a different topic now, but the data centers -- or is artificial intelligence a blessing or a curse or a threat for the energy transition?

I think artificial intelligence is going to play a role everywhere to say we can decide whether or not to do it or not would be a mistake for the German economy, it's absolutely vital to proactively do something about AI also for the benefit of this -- our benefits of this country, our customers. So we need to use artificial intelligence and not see it as a threat and manage it as a threat. That's my statement.

For our customers, data center means reduced network tariffs because the data centers increase demand. They pay the network tariffs and the network tariffs paid by the data centers don't have to be paid by the customers. So that's good. And if the data centers then build their own generation capacity, which they sometimes do, then from an energy perspective, they are advantageous. And from the customer perspective, they're advantageous and also for society in our economic development. Mr. Wildberger is now saying we need to build data centers in Germany. And we need to provide the right framework for that.

I was shocked therefore that in Groß Gievitz, it was decided not to do so. We have to do it. Without data centers, Germany will turn poor. Without AI, there will not be a good Germany going forward.

Then if Brendel, I need a little help because I have been seeing Mr. Steitz from Reuters, but he's not on my list. Can you please check what the sequences? I've seen you, Mr. Steitz. And also Mr. Schulte, I've seen you as well, but Mr. Brendel first, please.

My question is that you said that you want to invest EUR 5 million to 10 million -- or could invest EUR 5 billion to EUR 10 billion more. When exactly will you decide whether or not you will invest this EUR 5 billion to EUR 10 billion? Will this happen as soon as the Federal Network Agency has provided more clarity on the return on your equity? And once this has been decided, would it be invested in the current period up until 2030? Or could it be possible that you invest this after 2030?

Well, first of all, you're right. We have a leeway of EUR 5 billion to EUR 10 billion compared to the minimum rating target, which we set for ourselves. So this allows us to invest more, but it also provides a certain risk buffer because we will not invest down to our minimum rating. We now have a very attractive new investment program and decided very consciously. Even though as Leo said, we could invest, we've decided not to do so for the time being because the parameters defined by the Federal Network Agency are not right in terms of the return situation. And you mentioned it.

Once we have more clarity on that, then we will be able with our operational performance to raise these investments, and we'll be able to do that from 2029 onwards when the new regulatory period starts. But the earlier we have clarity, the earlier we can, for example, from 2027 or 2028 onwards, if there is an attractive regulatory regime, we could start investing in 2029. But for that, we need early signals, early clarity. And with what's been published so far, we haven't had that clarity.

Thank you very much. And now we -- I can see the right order. So Mr. Steitz, who has joined us online is next, followed by Mr. Bathke, Mr. Schulte and Ms. Becker.

Mr. Steitz?

I have 3 questions. The first question is Mr. Birnbaum. You referred to grid resilience. And you also said that transparency measures would have to be eliminated in order to safeguard or achieve more protection. And I know this is a very important topic for Germany as well. Could you elaborate on that?

Your investment program is accompanied by a disposal program of about EUR 2 billion, which you weren't that clear when you talked about that, but it is oriented towards strategic incentives. Could you please give us more details? Romania apparently is not that you want to develop that further, but what does E.ON want to dispose of in the medium term?

And question number three, how do you see the Turkish market? Is it still part of E.ON's core business? What's your current opinion on Turkey and your business there?

Resilience, Yes, briefly. As a critical energy infrastructure operator, we were asked to make our grids transparent and to make them geo-localizable so that every new investor would be able to look where they could connect themselves to the grid. As representatives of the industry, we criticized that. We said that this might not be such a good idea, but now it's too late. And the entire German critical infrastructure is available on the Internet and with geological data. We can't change this anymore, but anything that we're going to build in the future should not be visible.

As far as critical infrastructure is concerned, transparency may be interested or important, but I do believe there are many, many other interests that are more important and the legislation has to be changed. And I think this will be done in the future.

Now with regard to the Turkish market, these are at equity participations. In some cases, we own them together with a joint venture partner. We have one company is also listed at the Turkish Stock Exchange. It's not a core business, but these are operating units that are developing very well. We would well, enjoy them even more if this country didn't face such a high inflation rate.

Disposal program. We are pursuing our Portfolio Optimization Program. We are continuously reviewing our portfolio. We are planning to achieve EUR 2 billion in total. Of that, about EUR 1 billion have been implemented. And you asked about the -- some examples for disposals. Well, at the beginning of January, we sold our Czech gas distribution grid, but we're also looking at smaller divestitures, which -- in areas where we may not be the best owners and in cases where our disposal would create value for shareholders and would give us money to grow in other areas in which we would like to invest.

We're not under pressure. We are moving ahead opportunistically. And from a perspective of portfolio hygiene, we just ask -- have to ask ourselves whether the individual assets help us create value or whether others might be better owners than we are.

Mr. Bathke from Energate.

I hope you can hear me. I can't hear myself perfect. I have 2 questions. The first one goes to you, Ms. Jakobi. You criticized the economically viable regulation. If you look at the regulatory framework, a lot is being changed. What were you referring to? What is an economically viable regulatory framework? What are central aspects of such a framework?

Second question, Mr. Birnbaum, the network package. There is mention of individual grid connection processes. You mentioned the first come first serve principle that still applies and the regulations on the individual grid connection processes at distribution system level as it is now. Can you work with that? Do you have any ideas? And the transmission system operators have the maturity degree procedure. Is that something that you could also apply at the distribution system level?

Well, we are steering our investment program from EUR 43 million up to EUR 48 million. Our economic net debt also rose further. We would like to attract more private capital. And for that, we need an attractive regulatory regime. And it's not just one single component of the regulatory regime, it always depends on the overall package. And if I would have to pick one aspect, then I would like to mention that we have existing assets that have to be refinanced and the current proposal that is being discussed will not enable us to refinance our investments at market conditions. That's something, for instance, that should be insured in a good regulatory framework.

And I would also like to pick up your question and use it as an occasion to summarize what I tried to say in my speech. We only have 1/3 of the network, if you look at the kilometers, but we have connected disproportionately high amounts, 50% of the PV system, 60% of the strategies, 70% of onshore wind. And the redispatch topic is not an E.ON topic, but a transmission system operator, 78% with regard to the distribution system, it has a disproportionately high amount at E.ON or E.ON because we have the distribution system.

Now with regard to power connected, we are in a very good position to know what customers need. You talked about the maturity degree system for the TSOs. We believe that new criteria for connections are necessary. The maturity degree procedure of the TSOs would be a starting point. But for the 110 kV level, we would like to also take the requirements of final consumers into account, and we should not simply apply the regulations of the TSOs to the DSOs. Thank you very much.

Next, Mr. Schulte from WAZ Newspaper, please.

All the good questions were already asked. So I have another question. Mr. Birnbaum, how do you like what the German government are planning as far as the Heating Act is concerned? You are indirectly affected. And you've been saying for a year, we can do the transition, no problem. We will do it one way or another. The heat transition is the bigger challenge. So will that now decelerate the heat transition? Is it good that the level of 55% of renewables has been eliminated. So what do you think of the plan to bring in more bioquotas for gas and oil? That's where you come in. You as a gas supplier would need to ensure that the gas contains more biogas. Is that realistic? And what do you think about all of this?

Well, I think I said this in reply to Mr. Höning's questions. It's more than the Building Modernization Act as it's called out. There were statements on district heat in there on the supply and the funding instruments that are available. And then also the quota staircase and the buyer percentages. So a big package. As I said, to be honest, today, I cannot answer your question because it very much depends on the details at the end of the day, how positive or negative this will be for customers.

A quota can be too high or too low. It can be too bad for liquidity in the market. It can come too early or too late. So today, I cannot give you an assessment. Let me put it differently. It's great that we now have something on the table and now we can discuss it rather than speculate. We can talk about how to do what's on the table and developing in such a way that it works for climate protection and also for affordability. So I am positive and grateful that we now have something on the table we can work with. And whether it's positive at the end of the day, we'll need to see.

Okay. I think I was out of my room here when Ms. Höning asked the question. So apologies for that.

Well, with this topic, it does do no harm if this question comes up twice. I added a few things now the second time around.

One other question. So do you like the basic idea that the responsibility has shifted away from the consumers towards you?

Again, as a supplier, again, what does this shift of responsibility? What does it mean? What will the details look like? And well, I'll be facing that responsibility in 2 ways. I'm a gas supplier and I'm a gas network operator. What does it mean for gas grids? We had the discussion that we should switch off the gas infrastructure. So I cannot say off the cuff now what my take is on that. We need to look at it in detail or also ask what else do we need to understand for us to be able to give you a take.

Next, Annette Becker from Börsen-Zeitung.

Can you hear me? Okay. Yes. I have a series of questions as well. I would, first of all, talk about data centers and demand planning. Mr. Birnbaum, you just said that you did a study or had a study made 5 years ago that expected a totally different demand or build-out. Now data centers has only really come up in the last 1 or 2 years, and it has increased electricity consumption as well. How big is the risk that you are now wrong again with your plans?

And then back in March or in summer last year, you already voiced this threat that you would not continue to invest if the framework conditions aren't right. You said at the time that the rolling plans would be put on hold. And today, you're saying, okay, we will spend EUR 5 billion up until 2030 after all. So to what extent is the threat an empty threat? I do not fully understand that. And then at a totally different topic, the lawsuit, OLG Schleswig-Holstein Brokdorf, can you explain what that is about?

And then a technical question. You are adjusting your calculations of adjusted EBITDA and the group numbers. Could you explain or at least say how the numbers for 2025 would be had you applied this approach already for 2025?

Okay. Fireworks a question. Well, first, how good are forecasts. I've always said all forecasts are wrong. And whenever we have looked 10 years into the future, and I can go 10 years back, we were totally wrong, all of us always. That's why I do not believe in long-term plans. I do not believe in 5-year plans. They've never worked ever anywhere, and I don't believe in 10- or 15- or 20-year plans. But I do believe in planning over and over again in a rolling way to take another look at reality and adjust plans.

You cannot define a target picture which you want to achieve and then you don't look again in that 10-year period. That's why I welcome the monitoring when it came up because I said it's good to look at reality and to check what are we really observing regardless of what we would have wished X number of years ago when we did the plan. And I said, we should do this monitoring every 2 years. We should check again after 2 years.

And the second topic is we didn't have wrong assumptions. Our assumptions were too low. All of our assumptions were too low for PV, for wind, for heat pumps, for electric vehicles. And they were too low prior to the -- to Russia's attack on Ukraine, prior to the Easter package before the trucks, before the batteries. And even though we weren't wrong, we were too low in all of these segments. And nevertheless, we were told we need more networks or we were criticized for demanding more networks.

If we were to say now 5 years later, with a permitting period of 8 years, you should have built more. It's nonsense. We should have looked again and again what the reality is. And of course, the permitting procedures need to be accelerated if we need to deal with this discrepancy I mentioned. This demand has been made over and over again, and I said so in my speech as well. At the end of the day, I can say from E.ON perspective, distribution networks, particularly E.ON's distribution grids are a growth segment. We'll need more of that. And that's why we are investing so much. Now we come to the wrap-up.

And Mr. Jakobi, please.

Well, you're right, Ms. Becker, you described it correctly. We have now allocated EUR 5 billion more for the 5-year plan. But if you break it down to the individual years, then from 2024 to '28, we had a significant ramp-up, which we -- what we do with our new investment program is that we use the old plans and the numbers we had already defined for '27 and '28, EUR 10 billion. And now we are continuing that at the same level for 2029 and 2030. So our operating point was already directed at EUR 10 billion CapEx overall. And now we have indications suggesting that we increase that.

We don't have clarity yet, full clarity, but we also know, as Leo said, that we need these investments. They are politically desired. They make very much sense from a macroeconomic point of view. And to be -- to say now that we should reduce our network investments would be totally the wrong decision to take. And we have explained this in our annual report as well. The neutral effects that are due to the regulatory account will be cleared. Adjusted for these effects for 2025, we would have an EBITDA of EUR 9.4 billion, and that would be the reference figure.

And the last question was about Brokdorf, Leo.

Yes, sorry, the lawsuit there. I think the lawsuit was filed for the German government or the local government not being active. I think Schleswig-Holstein is where everything is more expensive and takes longer. Decommissioning will not work the way it's panning out now. And therefore, we have taken action, accusing the authorities of not taking action. It cannot be that we wait for the simplest things for years and at the same time, being expected to motivate the people and stay there at the site without being bored. So it was urgently necessary to take this action for failure to act.

In Grohnde, there's almost the similar of the same design in Lower Saxony or what we did at Isar, what we dismantled there. And in Brokdorf, we just filled out forms and elsewhere during the same period, we dismantled thousands of tonnes of plant. Schleswig-Holstein did very good things. Mr. Goldschmidt, the Environmental Minister did a lot of good things in terms of network connection regime. It contains a lot of good things, but it's a very good document. I would subscribe to that. But in that area, his ministry is simply not delivering.

Okay. We can discuss this bilaterally later on. We have further questions. So looking at the clock, I suggest we won't forget that question. I promise you, but let me go through the list here. Ms. Weikert is next and then Mr. Käckenhoff from Reuters and then Mr. Rasch from NZZ.

Mr. Weikert first, please.

Yes. Thank you. I would like to know what progress is being made in your talks with the regulators. So are you confident that more investment will be possible going forward? Maybe you can report on that.

And then the EUR 5 billion to EUR 10 billion headroom, Mr. Jakobi, what will you do if the prerequisites are not right or are not the way you would wish them to be? What will happen with the money, then there are 2 other areas you could invest in. Would the money be invested there then instead? Or what will you do with that EUR 5 billion to EUR 10 billion?

Well, we are basically optimistic that when something is really needed that the right rules will be put in place for them -- for all of this to be implemented. But we are not willing to disclose anything on the bilateral talks we've had. We are having constructive discussions in the relevant communication channels. That's all I can say.

And then I'd simply like to add to that. We have a very high demand and we already said at the last press conferences that the network plan would justify much more investment or we could connect a lot more than we are connecting at the moment. We have waiting times for customers that don't have preferred access. So we could connect a lot more. So our main focus would be on the organic increase of network investments. And since we are confident that we will have positive regulation at some point in time, that's our plan A.

Okay. Tom Käckenhoff from Reuters.

Could you please elaborate on the outlook concerning the figures that have been adjusted? In the text, you say that you are expecting stable earnings, but the figures that you were stating are below the figures of the previous year.

Well, that's what we just mentioned in the context of the last question. Our earnings have been adjusted for the neutral effects that 2025 -- of 2025, they've been adjusted for them. They've been corrected. And as a result of that, we are going to achieve the EUR 9.4 billion. And based on that, we're going to -- we are expecting a stable result.

But what are the figures of the previous year?

Well, that is the figure. This year, we are at EUR 9.8 billion in terms of EBITDA but that already included at the beginning of the year, we said that neutral regulatory account effects of EUR 200 million are included. They were even higher by the end of the year because of higher amounts distributed in Eastern Europe or grid loss recoveries from the previous years. They -- these factors -- well, in the past, we always talked about regulatory account effects. These will be adjusted for in the future.

And for this pro forma figure for the sake of comparison, we have adjusted them. So the unadjusted figure is the EUR 9.8 billion. The adjusted figure adjusted for the neutral net effects for 2025 is EUR 9.4 billion.

Let me add the investors asked us to do so. We always -- well, we used to say, well, it was better than previously assumed because we had fewer losses in Eastern Europe, grid losses. And then the next year, we had to say that it was slightly worse because what we had achieved in the past or received in the past was not available now. So we always had to explain why the earnings figure went up or down. And then, well, when we exclude this regulatory aspect, that was only really a time matter, what is the actual curve.

And now we have 1 year in which we used both tracks, both ways. But next year, we will only have one E.ON figure without any adjustments. But I would like to apologize for the fact that we created this confusion this year because this year was a year in which we changed the approach. But that was a request that we received from the market. And it's also in line with what our main competitors do, such as National Grid.

Mr. Rasch from Neue Zürcher Zeitung.

I'm from the digital financial magazine, Der Markt, we're a magazine for investors. And that's why I would like to ask the following question.

If I look at the free cash flow as analysts report free cash flow, you have a negative free cash flow for 2025 of more than EUR 1 billion. 2026, this figure will even be negative EUR 2 billion, and that it's going to continue. You described your investment program, which is very extensive, and you have a good return on this investment program. But until 2030, if I look at the plan, do you expect that the free cash flow is going to be positive at some stage? What are your prospects in this regard?

Well, we explained that we are a growth business. And if you want to grow -- well, we are growing, but although we are free cash flow negative, we are achieving our KPIs. And now considering the earnings increase, are we also going to manage to finance our increasing debt. You're right, we are a growth business, and we will still be free cash flow negative. But because we are planning to increase earnings substantially, we are still going to be able to meet the rating figures despite the negative cash flow.

Is there any horizon, any time frame? Do you know when you're going to be free cash flow positive?

Well, we have a good portfolio of businesses. We have an energy retail business that generates a very good cash flow. And on the other hand, we have strongly growing businesses in the area of networks and Energy Infrastructure Solutions, which will be financed by the high cash flow from the energy retail business. Based on our current plans, we do not expect that we're going to be free cash flow positive. But if growth would not be that fast in the future, we may have that situation in the 30s. But currently, we rather see this as a positive quality. It's good for us to have the opportunity to invest in the growth businesses.

And this brings me back to regulation. The additional investments need to generate earnings. We can't increase debt with a negative cash flow without generating good earnings. You have a good point. But it's one of our KPIs and one of the KPIs used for steering. We are steering the cash conversion rate, and we also communicated target figures to the capital market.

That's the operational performance of our business. Operating cash flow is to be 100%. So the EBITDA that we are guiding is fully cash effective. And that's really all I can say about this.

Thank you to Hamburg. We still have one last question in the virtual room from Mr. Haas, from Westdeutscher Rundfunk.

I have 2 questions, Mr. Birnbaum. Last year, we talked a lot about smart meters. And I would like to ask you how you see the current development.

And secondly, we also talked about Brokdorf and Grohnde nuclear power plants. And in many countries, nuclear power is facing a renaissance, but not really in Germany. If -- do you see any investments there if this industry becomes more important? Would you think that at some stage, we would -- we will have 2 or 3 nuclear power plants in Germany?

I'll answer the second question because I can answer it more quickly. The answer is a lot is happening, but nothing in Germany. I am very sure that there will not be any private investor who's going to build nuclear installations in Germany. You can discuss this at length, but private investors need 40 years of reliability, and we don't have that, and that's why nobody is going to invest in Germany. Now I forgot the first question.

The first question related to smart meters.

Oh, yes, I'm sorry, I apologize. The second one, I lost track. The smart meter rollout, and I already mentioned that the smart meter rollout continued as planned. The rollout rate of 20% was exceeded in all areas. We built 0.5 million additional smart meters in Germany. We're going to achieve 1 million in Germany now. And I don't know whether the entire industry achieved that, but I would like to say that for a country that is as large as Germany, 1 million is very sad. 1 million were built in Warsaw in 2 years, 1 million can be built in Sweden in 1 year or 2 years at the latest.

And I was criticized that in Germany, we chose the most complicated and slowest smart meter rollout driven by the most expensive and most complicated regulation worldwide. There's no other regulation that's more complex than the one in Germany worldwide. We made a lot of suggestions. None of them were implemented and now we are where we are. We're doing this rollout, but it's not fun.

Thank you very much, Mr. Haas. That's the last question on my monitor. With this, I would like to close the balance sheet press conference for this year. Thank you very much for joining us. I would like to say goodbye to our colleagues in the virtual room and do hope that some of the colleagues who are in the room will stay with us and look at the exhibition mentioned by Mr. Birnbaum.

We also have some snacks for you, and you'll have the opportunity to exchange and discuss if you have any questions throughout the day, my team and I will be available any time. Thank you very much for coming and many greetings to the virtual room. Thank you very much.

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

Hello, everyone, and welcome to our 9 months 2025 results call. Thank you for taking the time to join us today. I am here with our CFO, Nadia Jakobi, who will give you an update on our financials. As with every occasion, we will leave enough room at the end for your questions.

With that, over to you, Nadia.

Thank you, Iris, and a warm welcome to all of you from my side as well. Before I turn to our financials, I would like first to touch upon the latest regulatory developments in Germany. The German regulator has announced the start of the final consultation process concerning the framework concept with a committee of representatives from regional regulatory authorities. Compared to its draft proposals published in the summer, the regulator has introduced amendments to certain items, most of which affect smaller network operators.

The main aspect for us is that the regulator intends to maintain the 7-year average approach for determining the cost of debt on the existing asset base without annual adjustments. This fails to consider that maturing debt must be refinanced at current market rates. The proposed higher weighting of years with higher investment is a step in the right direction, but it does not solve the problem as the average would still be below current market rates. Consequently, the current draft of the framework does not fairly reflect grid operators' financing cost.

Allowing for an annual adjustment would have ensured a more appropriate reflection of actual market developments for both customers and grid operators. The proposals are still in draft format, and so far, we have only seen a brief BNetzA release. However, the regulator has indicated that the current version is close to final and plans to keep its year-end target for finalizing the framework and the methodology on capital returns and efficiency benchmarking.

However, the final values for return on capital will only be determined much later in the process between 2026 and 2028 as was the case for former regulatory periods. Given the status and recent announcement of the regulator, specifically for the cost of debt treatment, the uncertainties regarding RP5 are greater than we had expected by now. We would have expected to be able to narrow down the ranges for capital remuneration further. As we have always said, ultimately, the RP5 proposals as a whole must be sufficiently attractive to promote investments.

In his latest announcement, the regulator stated that the new Nest proposals will increase the revenue cap by 1.4% or EUR 1.3 billion for power DSOs during the next regulatory period. The regulator must now move from words to actions as we do not see the necessary increase of the regulators' returns so far in the publications.

In view of the enormous investment needed for a successful energy transition, we, however, remain confident that the final result will deliver the outcome needed. But we would have expected to have more clarity already at this first stage of the process to invest further investments in detail. We will continue to advocate for an internationally competitive market-based regulatory framework that supports a successful energy transition in Germany. At the same time, we remain committed to our value creation promise and will only invest provided regulatory returns create value for our shareholders. I'm sure we will continue this topic in our Q&A, but let me now turn to our financial results for the first 9 months.

There are 3 key messages I want to highlight. First, in the first 9 months of the year, we achieved an adjusted EBITDA of EUR 7.4 billion and an adjusted net income of EUR 2.3 billion. This represents a year-over-year increase of 10% and 4%, respectively. Based on our full year guidance, that means that we have achieved roughly 76% of our adjusted EBITDA and 78% of adjusted net income at group level.

Second, our investment-driven earnings growth and strong operational execution remain the key driver of our sustainable growth. Our planned investments have developed well with a year-over-year increase of 8% at group level. The main share comes from our Energy Networks business. This shows that our long-term procurement strategy, including our highly skilled workforce, enables us to successfully execute our networks investment plan.

And third, based on our 9 months economic net debt outturn, we expect our debt factor to come in at around 4.5x economic net debt to adjusted EBITDA for the full year 2025. Our balance sheet continues to provide a strong foundation for our investment plans.

Let us now move on to the details of our 9 months year-over-year adjusted EBITDA development. The increase in EBITDA was largely driven by our Energy Networks business, reflecting accelerated investments in our regulated asset base across our regions. We continue to see a substantial contribution to our earnings growth coming from value-neutral timing effects. In Germany, the positive timing effects were driven by increased volumes and lower redispatch expenses, primarily during the first half of this year.

In Southeastern Europe, we continue to see additional network loss recoveries and volume effects. We don't expect significant impacts from value-neutral timing effect in Q4 2025.

Turning now to our Energy Infrastructure Solutions business. EBITDA growth was driven by higher volumes due to normalized operations and weather compared to last year. On top, we saw business growth from new projects coming online and increased smart metering installations in the U.K. Our Energy Retail business delivered in line with our expectations. The usual operational year-over-year development in Germany is masked by phasing effects from true-ups for volume and price assumptions and by restructuring provisions in connection with our efficiency programs. However, the decline is partially balanced by temporary price effects from earlier this year.

As already communicated in our H1 call, the earnings development in the U.K. continued as anticipated and is already fully reflected in our guidance. In our U.K. B2C customer segment, we continue to see customers switching from SVT tariffs to fixed-term tariffs. In our U.K. B2B business, contracts from previous years continued to roll off.

Our 9 months 2025 adjusted net income came in at around EUR 2.3 billion. The conversion of the operational growth into the bottom line came in as expected. We observed slightly higher depreciation costs, driven by increased digital investments with shorter useful lives. Interest costs rose due to the higher coupons compared to maturing debt as well as higher debt levels relative to prior years. In addition, the positive value-neutral timing effects mainly came from our Southeastern Europe network business, which has a higher minority interest.

Let us now move on to our economic net debt development. The execution of our investment program remains strong. In our Energy Networks business, we saw a 15% increase in year-over-year investments. Our group CapEx fill rate now stands at around 60%, which is in line with our typical 9 months level. Our economic net debt improved by roughly EUR 2 billion in the third quarter. The main driver was a strong seasonal operational cash flow. In addition, there was a positive structural effect of around EUR 700 million coming from the deconsolidation of one of our regional utilities participation in Germany NEW AG at the end of September 2025.

In the third quarter, we also benefited from a tailwind in pension obligations, which decreased by a mid-triple-digit million euro amount, mainly due to the rising interest rates between the end of Q2 and Q3. We have also continued to streamline our portfolio as part of our discretionary EUR 2 billion disposal program. Most recently, we announced that we have signed an agreement to divest our Gas Networks business in Czechia. This step enables us to continue pursuing our ambitious growth and investment goals.

In summary, our robust E&D trajectory continues to support our confidence in maintaining strong balance sheet flexibility to finance our ongoing investment program. At year-end, we expect our debt factor to come in at around 4.5x economic net debt to adjusted EBITDA based on the current interest rate environment.

Finally, I would like to conclude today's presentation with my key takeaways and outlook. First, we have delivered strong 9 months group results and are well on track with our investment ramp-up. Our strong balance sheet provides a solid foundation for continued organic growth. Second, on our outlook. Our 9-month performance supports our 2025 earnings expectations. In our Energy Networks segment, we continue to expect to reach the upper end of the guidance range, driven by value-neutral timing effects. This also positions us at the upper end of our group EBITDA guidance range for the full year 2025.

For our adjusted net income, we still expect to land comfortably within our guidance range. With that, we fully confirm our full year 2025 guidance and 2028 outlook, including our dividend policy.

With that, back to you, Iris, for the Q&A.

Thank you, Nadia. And with that, we will start our Q&A session. [Operator Instructions] And we will start today's call with a question from Harry Wyburd from Exane.

So I'll keep my regulation too. So firstly, can I just dig into some of the comments you made on regulation. So noted on the point on cost of debt allowances and your disappointment with that, but you also mentioned that you're confident you will achieve in the end, an agreement that works for you. And you also mentioned you are confident that you are -- or more confident that you'll get the consultation documents by the end of this year. Can you just tell us what a good outcome would look like in those documents you're expecting by the end of the year? It sounds like you're less optimistic about cost of debt allowances. What else could offset that potentially? And what is your latest thinking on where you think operating cost allowances will come out because a few of your criticisms of the regulation were centered on cost allowances.

And then the second one is on consensus for next year. Given that next year, you will no longer be reporting timing effects in your headline earnings. Are you comfortable with the current consensus for next year, which I think stands at around EUR 1.08. If you could give us a flavor of how you're feeling on that, that would be very useful.

Harry, thanks for the questions. I think on the question on outlook 2026, we give the outlook for 2026 at our full year results for 2025. And I will now not give any glimpse into our 2026 numbers. But just, of course, we are, of course, following the consensus always very carefully.

So coming to the first question. So first of all, the regulator has announced that he sees the draft as largely final, and he keeps the year-end time line for the framework for cost of capital and efficiency. Compared to the summer draft, the regulator added amendments and improvements, but those were mainly affecting the smaller DSOs. You might have seen that the simplified that -- also the DSO and the simplified procedure can now get the OpEx factor.

For us, as you highlighted, the key negative point that we have seen so far that the 7-year average without dynamic adjustment is still kept. And honestly, also the weighted average that has now been introduced is not helping that much because we have been also ramping up our investments faster than the industry because we got our ducks in the row on supply chain at a faster pace to enable the energy transition. And as you know, we are sort of connecting 80% of all onshore wind, for example. That's why we have been ramping up far faster than some of the smaller competitors.

So the latest statement on this cost of debt rather confirms a bit of unease that we have highlighted in our H1 call. But we, of course, continue to advocate for competitive and market-based regulatory framework. So I don't see that there will be now massive changes compared on this cost of debt discussion until the end of the year. But of course, the overall regulatory package must be attractive enough to encourage further investments.

So if you ask me, the problem is, at this point in time, we only have seen the press statements of the regulator. In the press statements, the regulator has clearly articulated that he sees that the revenues will structurally increase by 1.4%. But however, we haven't seen that now in the publications. And also, we don't have the final draft in our hands. That's why it's now very difficult for me to sort of point you to the 1, 2, 3 positives in the publications, which might come until the end of the year because I currently don't have more information than is publicly available.

On operating cost allowance, maybe just one word. Of course, operating cost allowances, that was always clear that everything that is -- in regard to efficiency benchmarking and operating cost allowances, that was always clear that this will only come at a later point in time in the regulatory period.

We move then on to the next question. The next question comes from Deepa from Bernstein.

So I think my question is actually continuing on the theme of regulation, but maybe a bit more specific, Nadia, based on your best understanding from your regulatory team. So the new period starts in 2029. So are we talking about like a weighted average cost of debt from -- averaging period from '21 to '28. That number is calculated. It's then fixed and just applied for all the -- I think it's going to be only one RAB, right? So for the opening RAB, new investments, et cetera? Or is there at least going to be some level of dynamism for the new CapEx that's added on from 2029 onwards? So that's my first question.

Second question is a bit related. Obviously, when you will be presenting your full year results in '26, you're going to give us guidance for '26, but there's also an expectation that maybe you will roll your plan forward and give us some updates on CapEx. So my question really is, do you think you and the Board will have enough certainty about the investment conditions by Feb '26 that will allow you to make a decision on whether to keep the CapEx numbers as they are or use some of that headroom in your balance sheet? Yes. So those are the two questions.

So Deepa, you're touching upon some very relevant points. So we -- so first of all, to clarify the second part of your first question, it is very clear from the current proposals that for the new investments that start from 2027, there will be this dynamic adjustment in the cost of debt that we already have in this fourth regulatory period. So that's something which is continued and it's also then working that we get our actual financing cost reimbursed.

Then when it comes to the currently existing asset base, like you highlighted, it is a 7-year average, and this is then fixed and not dynamically annually adjusted for the maturing debt. And what we don't know at this point in time is what years are part of the time series. And that is, of course, very relevant because, as you know, at the beginning of the '20s, we still had this very low interest rate years, and it is very fundamental, which years are being part of this 7-year average. And that is something we don't know, and it is also not clear if we know at the end of the year.

And this also applies, for example, for the risk-free rate that is for the new investments as part of the cost of equity determination. We also don't know which years will be included in that calculation and some of the other elements that are part of the cost of equity for sort of the new investments.

So that then also leads me to the second part of your question. As we highlighted, we would have expected to have more clarity around the methodology at this point in time to be able to narrow down the corridor of potential outcomes. I think that is what I've been also saying the last couple of quarters that the methodology and that methodology, of course, includes also what kind of years are included, et cetera, would help us to narrow down the corridor of potential outcomes. And what I know right now, that has become less likely at this point in time.

So when it now comes to what we will do in our full year, the regulator has clearly articulated and signaled that we will have higher revenues, but we haven't seen it yet. So that's why we will first now wait for the proposals to come. Currently, that's a closed shop exercise within the regulatory authorities and the regional authorities. And once we have now then assessed the final proposals, we will then make up our base case, and we will update you accordingly. But for now, it's too early to comment on our full year communication.

With that, we get to the next question, which comes from Peter Bisztyga from BofA.

So sorry to kind of labor the point on regulation. But what I'm sort of hearing is that the cost of debt aspect isn't adequate and it's probably not going to change very much. You've been sort of clear that you want 8% plus ROE. And if you look at the methodology to date, I don't think there's a chance that you're going to get anywhere near that. Dispatch costs are still included in the efficiency benchmarking. So there's a whole list of stuff that you've been quite explicit about the fact that you don't like. And the revenue increase, the sort of 1%, whatever it is, just isn't very much in the grand scheme of things. So how can this get anywhere near to being a sort of sufficient overall package based on what you have said are your kind of minimum requirements? So that's my main question.

And then maybe just one -- just on a slightly different topic. Your customer numbers in Germany and the U.K. In Germany, you sort of lost quite a few in the first half, but it seems to have now stabilized. And in the U.K., you're sort of losing a few -- 100,000 or so customers this quarter despite, I think, sort of quite aggressive pricing. So I just wondered if you could comment on what dynamics you're seeing in those 2 retail markets, please?

Yes. So let me start with the first part of the question. So maybe starting with the last comment. The revenue increase of 1.4% is only the structural elements, which would lead to this 1.4%. All the market-related elements, i.e., sort of higher interest rates, both affecting sort of cost of debt and cost of equity and of course, all the increase about sort of more investments, that is not included in this 1.4%. But it is just sort of structurally making it more attractive that is included in that.

Second part, the determination of the new regulatory period, which starts in 2029 has always had like 4 years. So '25, '26, '27, '28. So what we are now saying in this first part, what we see up in 2025 and what we would have hoped for to get clarity in this first year and the one-off of the next regulatory period, this is disappointing from what we have known right now. But of course, we will have 3 more years with all the individual determinations to come. And with all the investment needs actually building up, we are still confident that the regulator will see the need for investment and will also then improve on that.

To highlight one topic you have now set around cost of debt, we discussed that. As a positive, which is currently not clarified at all is the OpEx factor. This has been just laid out without making it any more concrete, which should clearly be a positive. You mentioned the redispatch cost. We haven't so far seen anything and also no communication on how the efficiency framework and the benchmarking is going to work. And there, we also still see clearly the potential for improvements. However, so far, we haven't seen it in any of the publications. And so -- as I said in my speech, the regulator now just after he had his words that there will be structural improvements, we will also now see that is actually the actions are also coming.

And customer numbers. So customer numbers, yes. So I think we covered the drop in customer numbers in the first half of the year. And we highlighted in the last call that we are targeting around 47 million customers for our overall customer base, and that is absolutely unchanged. We are pursuing value over volume strategy. So clearly, it's not only the customer numbers, but also the value per customer is what is relevant for us. So we are absolutely sort of keeping to our guidance for the energy retail business for 2025 with a target range of EUR 1.6 billion to EUR 1.8 billion, and that is fully confirmed. And we have been also saying, I think if you remember, as part of our Q1 call that some of the customer acquisition campaigns will be rather tilted to the back end of the year and some of that, you are also now seeing in the market.

With that, we go on to Piotr from Citi.

I have two questions, please. So the first one on this EUR 5 billion to EUR 10 billion extra CapEx headroom that you previously discussed. So assuming the German regulator doesn't provide you the required package, is it possible that you redirect this potentially into other markets? Essentially, what I'm trying to get is, shall we think about this EUR 5 billion to EUR 10 billion that is more likely or not that it will come and be spent somewhere within your structure into different regions? So that's question number one.

And the second question I have on the supply margins outlook into the next year. What is the procurement prices of a commodity component doing on your books? Is it -- should the customers expect declining prices or flat prices? And what that -- does it have any implication on the supply margin you can generate?

Yes. So on this EUR 5 billion to EUR 10 billion headroom that we have. And I think if you remember, Leo, I think, gave some highlights about where we're investing in our international networks business in the H1 call. And there is very clearly also a need to grow in other regions because particularly also in some of the other regions we are operating in, we see a higher economic growth than we actually see in Germany. And there's quite a lot of connection requests also for industrial customers. I would just point you to some of the examples that Leo has given as part of his speech in H1. So there is clearly the need for growth also in our international and European businesses.

Second point, in Germany, there is this clear investment need. We're also already -- at this moment, our demands and needs for investment by far exceed what we can actually include in our plan. And that's why we are saying, as I already highlighted to the question of Peter, that we say because the investment needs are there that eventually we will get a good framework in Germany. So I guess, as you indicated, this EUR 5 billion to EUR 10 billion in headroom clearly earmarked for organic growth in our business.

Second question was regarding the supply margins. Yes, procurement strategy is, of course, more commercially sensitive topic that I will not now share with the whole investor community. I guess, what you know that some of the prices in the U.K., the procurement strategy can be very easily followed by the price cap regulation. So I would point you to that. And in Germany, except from the commodity element, you, of course, know that we have seen quite some reductions in network grid fees with the subsidization of the German government of the TSO grid fees by EUR 6.5 billion, which will now also feed through into the tariffs and the same applies to the cancellation of some gas levy. But I guess that would be what I can sort of share with you on this point. So clearly, some elements where affordability concerns -- where we will see that some of the affordability concern will be dampened, particularly in our biggest market, largest market, Germany.

And then we have another question from Louis Boujard from ODDO.

Maybe two on my side. Maybe the first one would be regarding the timing actually for the new investment plan that you expected. We understand that indeed, the debt factor is not at the level that you wanted, that there is some uncertainty still in the OpEx and in the framework that is currently under discussion. What does that mean if you're not able by February to update and to increase your CapEx plan? Does that mean that it's going to be over? Or does it mean that eventually there is other milestones that you could foresee in the future in the next quarters after February on which we could rely on in order to have a better visibility and better grip regarding the potential upside into the CapEx plan?

And also as a side comment on this question, do you, at the same time, see potential for additional investments in digitalization, smart meters, et cetera, that would enable you eventually to grab additional returns on the networks without relying too much into the regulatory framework? That would be -- sorry, the first question, a bit long.

Second one would be much shorter. On the Retail segment, our EBITDA declined by 18% on the 9 months. Well, we know that there is some normalization effect, but could you eventually elaborate on a geographical standpoint, what would be and if any corrective measures might be needed in certain geographies on which eventually the drop is a bit larger than what you could have anticipated previously?

Okay. So let me come first to your first question. So additional smart meter investments is always a good idea. So particularly, we are investing in smart meters in the U.K. and Germany. And I think we have been the ones who've been always fulfilling their targets. In Germany, we have reached a 20% increase. But of course, smart meter investments is something which we can do, but is not, of course, in any size equivalent to the RAB investments that we do.

When it comes to the timing, I would need to say that we don't want to speculate now. We have so far only got sort of what was uploaded onto the website of BNetzA and one interview of Handelsblatt of Mr. Muller. We have this clear announcement that we will see increases or improvements to the regulatory on top of the market-driven improvements. And that's why I don't want to speculate now what we will do. We will first make up our mind what we will do for the full year 2025 announcements.

So when it comes to the Q2, so the retail business, yes, you're right. As I've been highlighting, we are sort of EUR 300 million below last year in 9 months. We achieved EUR 1.4 billion, and we are sort of following the normal seasonal pattern and are on track for our full year guidance. Q3 stand-alone EBITDA was EUR 120 million. That was down from last year. That was mainly due to phasing. We actually put in some cost provisions for restructuring and some normalization effects across the markets.

So we have been really seeing only now some shifts between Q3 and Q4. Overall, the H2 results are very much in line with what we have been also seeing in former H2s because you need to bear in mind that H1 usually is the stronger of the 2 halves of the year for us.

Yes. I think particularly Germany is a bit hard to interpret because last year, we had the positive true-ups from the reconciliation between actual and planned consumption in Q3. Now we will rather see some true-ups in Q4. And we are really managing also the overall -- we are managing the results in the retail business on a full year basis and not so much on a quarter-by-quarter basis.

And with that, we come already to our last question for today, which comes from Ahmed from Jefferies.

Nadia, it sounds like from your comments that there is still quite a bit of a gap on key parameters, regulatory parameters between E.ON's position and whatever visibility that you get from the regulator. But then you've also referenced that you think in the end, you sort of feel that there will be the 2 sites will sort of come together. Could you just talk a little bit about the process? So if we get the consultation documents by year-end, and there is still a substantial gap between E.ON's position and what it sees as a regulatory proposal, what recourse measures do you have? Are you able to challenge it? Is there a way to sort of take it to an appeal? And how long could that process be? So I just want to understand a little bit more how do we -- what could be the process from there onwards? That's my number one question.

And sorry, my second question is, could you give us some sense of how significant the changes could be to the cost outperformance methodology? Because my understanding is that is quite an important element in terms of when we think about sort of the German regulation.

So Ahmed, as I highlighted earlier, at this point in time, we have only sort of the announcements from the regulator about the draft proposals that has been sent to the final consultation of the committee of regional regulators. And we don't have that yet. So for us, sort of the first step would be that we assess these publications once we have made them available. And then once we have fully analyzed that, we will assess our options. And as always, we also assess potential legal options that we have.

But we will, of course, only do that once we have the information in place. And as the regulator has highlighted, they deem that these drafts are largely final and that they will keep the year-end time line for the framework. So we are pretty sure that we will have them in the next couple of weeks.

The final decisions on the cost of debt and cost of equity are expected between 2026 and 2028, as I highlighted, and the efficiency values for RP5 power will be defined in 2028. So you're right. To summarize it again, you're right regarding the gap to our position versus the regulator. But keep in mind, it's now the framework and determination will only happen over the next 2 to 3 years. Yes.

Very clear.

And then the second question, when it comes to outperformance, it is an incentive regulation that we have and it's a potential for outperformance. I highlighted it earlier, and there's now a new element that is also coming in. So we have got the benchmarking and sort of the efficiency values that we get is also very clearly determining what kind of outperformance that we have. That is something which we will all know at a very later point in the process.

Then the OpEx adjustment factor, we cannot really tell. I guess, on the OpEx adjustment factor, I would hope that we get some more clarification in 2026. There was a bit more push down the line. Sort of even -- currently, we don't even know what the methodology about that is. But okay, what the OpEx factor will actually mean for us, we would also only know at the back end before we actually get into the regulatory period.

I guess that's all I can say on the outperformance right now. Of course, there's always a link between outperformance, OpEx factor and all the other return elements. And as we say, for us, the overall package regarding all elements is actually what counts. In this regulatory period that we are currently in, we managed to achieve a value creation spread of 150 to 200 basis points over all our Energy Networks businesses. And also our German business is living up to this value creation spread. And that's, of course, our ambition that -- and our goal to also achieve this value creation spread in the future.

And with that, we come to the end of our 9 months results call. Thank you very much, everyone. And if there are any follow-up questions or you would like to go into more details on the one or the other point, the IR team is happy to take your questions later. Thank you very much for dialing in and speak soon. Bye-bye, everyone.

Bye-bye. Thank you.