Iberdrola Stock

Good morning, ladies and gentlemen. First, we would like to extend a warm welcome to all of you who have joined us today for our 2026 9 Months Results Presentation. As is customary, we will follow the traditional structure of our webcast. We are going to begin with an overview of the results and the key developments during the period, and the presentation and the Q&A session will be delivered by the top executive team joining us today: Mr. Ignacio Galán, Executive Chairman; Mr. Pedro Azagra, CEO; and finally, Mr. José Sainz, CFO.

After the presentation, we'll move on to the Q&A session. I would like to remind you that we will only be taking questions submitted through our website. Please send your questions exclusively via www.iberdrola.com. Finally, we expect that today's event to last no more than 60 minutes. Should any questions remain unanswered, the IR team will, as always, remain fully at your disposal. We hope that this presentation will be useful and informative for all of you. Now without further ado, I would like to hand the floor over to Mr. Ignacio Galán. Thank you. Once again, please, Mr. Galán.

Thank you, Ignacio. Good morning, everyone, and thank you very much for joining today's conference call. In the first 9 months of 2026, reported net profit increased by 10% to EUR 5,816 million, and adjusted net profit reached EUR 5,141 million, which is 9% up. 13% excluded, this increase would be 13% excluding foreign exchange impacts. Adjusted EBITDA increased by 7% to EUR 11,191 million, driven by the strong performance of networks, up 15% due to a higher asset base in all countries, rate increases, and a growing contribution from transmission.

Total investment increased by 13% to EUR 10.1 billion in only 9 months, with 75% allocated to the United Kingdom, United States, and Brazil. Network investment reached EUR 6.3 billion, up 28%, leading to a 14% increase in regulated asset base to EUR 56 billion. And we invested an additional EUR 3.6 billion in power and customers, with more than 2,300 megawatts of new capacity operational from January to September, for a total of 3,300 megawatts in the last 12 months.

Thanks to our active debt management, we have combined those record investments with an ongoing reinforcement of our financial strength, reflecting a net debt-to-EBITDA ratio of 3.4x. And we maintained 70% of our total debt at fixed rates, excluding Brazil, which provides us significant protection against potential increases in interest rates. Following this result, the Board of Directors approved yesterday an increase of 8.7% in the interim dividend to EUR 0.275 per share. As usual, we will add to this amount a supplementary dividend once approved in our Annual Shareholders Meeting in 2027. Finally, in the last month, the acceleration of electrification and new energy policies have allowed us to increase the visibility of additional regulated investment and growth opportunities across the United Kingdom, United States, Brazil, and Spain up to 2030 and beyond.

Moving to results. Adjusted EBITDA reached EUR 11.9 billion, up 7%, with almost two-thirds coming from the United Kingdom, United States, and Brazil. Networks increased by 15% to EUR 6,430 million, contributing already 54% of the total EBITDA, thanks to a higher regulated base in all countries. The positive impact of RIIO-T3 in the U.K. in April, new rates in New York, Connecticut, and the U.S., plus additional revenues from transmission after the commissioning of NECEC, rate increases and contribution from transmission in Brazil, and a strong performance in Spain as well.

Power and customers EBITDA reached EUR 5,359 million, as the strong increase in demand in the third quarter led to higher procurement costs for electricity that has been sold at prices fixed in 2025. This negative impact is not expected to continue in the coming quarters, as new sales are already reflecting higher prices. In addition, this business was impacted by ancillary services in Iberia and higher costs in regulated gas tariffs, partially offset by the increasing contribution of pumped hydro in Iberia through the new facilities in operation like Valdecañas and Valparaíso in the Tajo and Tera rivers. All in all, excluding the FX impact, EBITDA grew by 8%.

Total investments were up 13% year-on-year, reaching a new record of EUR 10.1 billion to September, or more than EUR 15.5 billion in the last 12 months. The United Kingdom was once again our largest destination with more than EUR 3.1 billion invested in the first 9 months, 31% of the total, followed by the United States and Brazil with 21% each, Spain with 16%, and other European Union countries and Australia with 10% of the total investment.

By businesses, network contributed 62% of the total investment, reaching EUR 6,237 million, 20% more than last year. In the U.K., network investment increased by 36%, reaching EUR 2.1 billion or 33% of the total, driven by 60% growth in transmission and a 20% increase in distribution. Investment in Brazil also represents one-third of the total, almost doubling year-on-year, thanks to a 23% increase in distribution and the acquisition of the Neoenergia minorities, which more than offset the decrease in transmission after the completion of the last project awarded. United States network investment reached EUR 1.5 billion, with a 10% decrease due to the full commissioning of the NECEC transmission project last January. Finally, investment in Spain increased by 20% year-on-year to EUR 525 million.

As a result, our regulated asset base reached EUR 56 billion, up 14%. Transmission continues to be the key growth driver with a 31% increase in RAB year-on-year to EUR 17 billion, and distribution RAB rose by 8% to almost EUR 40 billion. By countries, the U.K., the U.S., and Brazil registered double-digit growth rates, reaching a combined contribution of 83% of our total regulated asset base. And this trend is expected to continue in the coming years.

In the case of the United Kingdom, distribution investment in the RIIO-ED2 framework increased by 20%. In the U.S., the temporary distribution rate recently obtained in New York will support $2.2 billion of investment up to May 2027, and the Powering New York multibillion project continues progressing. And in Brazil, Neoenergia will invest EUR 9 billion in distribution up to 2030, doubling previous investment levels after the renewal of the concessions, and more than offsetting the expected decrease in transmission after the completion of the old projects awarded that already represent EUR 4.3 billion of regulated asset base and will contribute more than EUR 250 million of annual EBITDA. In Spain, we will also continue increasing investment following the improvement in incentives included in the new regulatory framework. And finally, the authorization process for the acquisition of Caruna in Finland is progressing as expected.

Investment in renewables reached EUR 3,257 million, with EUR 1.2 billion invested in onshore wind, another EUR 1.2 billion in offshore wind, EUR 450 million in solar, and EUR 400 million in storage and other technologies. As a result, we installed more than 2,300 megawatts of new capacity, of which 1,000 correspond to onshore wind, mainly in Continental Europe, Australia, and the United States; 550 megawatts of offshore wind in the U.S. and Germany; and 700 megawatts of solar and storage, mainly in Iberia and Continental Europe. By countries, more than 600 megawatts were installed in the U.S., in line with the strong increase in capacity registered across the country over the last quarters. In the last 12 months, total capacity additions reached 3,300 megawatts, as I mentioned before.

Once again, the increasing cash generation allowed us to register record investments and preserve our strong financial position with a net debt-to-EBITDA ratio of 3.4x, fully compatible with our BBB+ rating. And we have continued to increase the share of fixed debt to 78%, excluding Brazil, providing significant protection from potential increases in interest rates. Following this result, and our strong current financial position, yesterday, the Board of Directors approved an interim shareholder remuneration of EUR 0.275 per share, 8.7% up. Next year, we will add to this amount the supplementary dividend approved at the Annual General Meeting next year.

As mentioned, in the last month, we have continued to see similar improvements in our investment outlook to 2030 and beyond, driven by increasing electrification targets and new energy policies. A few weeks ago, the International Energy Agency published a special report on electrification showing that just by using technologies currently available and cost-efficient, global electrification rates could increase by more than 10 points in just 10 years. Under this scenario, global electricity demand will increase by 50% up to 2035. This remarkable growth trend after a decade of flat evolution is visible across all energy uses. For industry, where 40% of low and medium temperature processes could be fully electrified, through transport or cooling and heating, both with 50% electrification potential. And according to the International Energy Agency, this potential is even higher in mature economies like Europe, where the electrification rate could increase by 15 points to almost 40% of the total final energy consumption.

These technological trends will be further supported by energy policies that are promoting new investments across our main markets, especially in networks. In the European Union, the electrification action plan recently approved by the commission has set a target of 46% electrification by 2040. And the European grid package calls for a strong increase in network investment up to EUR 600 billion in just 5 years. This includes measures like the acceleration of permitting and the design of regulatory frameworks with sufficient incentives.

In the United Kingdom, the Clean Power 2030 plan targets 95% clean electricity in just 5 years, a building block of the country's Net Zero strategy to reduce emissions by 87% by 2040, but also as a way to promote energy security and economy across the U.K. All this requiring present investment in transmission and distribution, in line with the recent report published by the U.K. independent system operator, which estimates that only in transmission networks, investment should reach GBP 89 billion in the next decade, far above the estimates made 2 years ago.

This positive outlook is already translating into tangible growth opportunities in all businesses and geographies. In networks, we expect to increase our regulated base by around 60% up to 2030, reaching more than EUR 90 billion, driven by huge investment requirements, including growth investments linked to demand increase, especially in Brazil, but also in Spain and the rest of our markets where we continue receiving more and more connection requests as well as new transmission lines or interconnectors. On top of this, refurbishment investments will also rise considerably, mostly in the U.K. and the U.S. due to the high age of network assets, which average reaches 45 years and in some cases, up to 70, 80, or even 90 years old. Finally, we also expect a strong growth in investment linked to reliability and resilience due to the increased regulatory requirements.

Given the positive investment outlook in the U.S. and the U.K., we expect an ongoing rise in the contribution of both countries to our network regulated base, reaching 65% by 2030. In power and customers, we expect 15 gigawatts of new capacity between '25 and 2030, of which 60% are already installed or under construction. 5 gigawatts were already commissioned between January '25 and September '26, and 3.8 gigawatts are currently under construction, with 1.5 gigawatts starting operation already in the fourth quarter of 2026, mainly corresponding to the East Anglia THREE offshore wind farm in the U.K., another 2.3 gigawatts in 2027 and 2028, including the East Anglia TWO offshore wind in the U.K., and 700 megawatts of onshore wind and solar in the U.S.

In addition, we have up to 6.5 gigawatts of capacity that will start construction shortly and will be commissioned in '28, '29, and 2030. Around one-third of this capacity will be in the U.S., mainly driven by life extension and repowering opportunities across our 11-gigawatt fleet in the country. We'll now hand over to our CFO, who will present the group financial results in further detail. Pepe?

Thank you very much, Chairman. Good morning to everybody. 9 months reported net profit grew 10% to EUR 5.8 billion, and adjusted net profit grew close to 9% to EUR 5,141 million, supported by a 7% increase in adjusted EBITDA to EUR 11.9 billion. Since last year, the dollar has depreciated 4.1% against the euro, the pound 1.7%, while the real has appreciated 5.5%. Excluding it, adjusted EBITDA growth would have reached 8% and adjusted net profit 13%.

The adjustments to the reported P&L are as follows: in this quarter, in Q3, there is an impact of a GBP 382 million U.K. Smart Meter capital gain, which is excluded from the adjusted net profit in '25. The remaining adjustments were already reported at June. Regarding Mexico, in accordance with IFRS 5, Mexico is classified as discontinued operations. Therefore, its contribution is excluded from EBITDA in both reported and adjusted results. At the net profit level, Mexico is presented under discontinued operations in the reported accounts, while in the adjusted figures it is reflected under the equity line. As a consequence, in the second quarter, we excluded the positive capital gain of around EUR 1 billion from the sale of the remaining Mexican business to COX. As usual, U.K. capital allowances are adjusted at the net profit level in '25 and '26. Finally, U.S. past recognition is excluded from adjusted net profit in '25, EUR 530 million gross, EUR 389 million net. You can find all these effects explained in more detail in the annex on Slide 37, 38, and 39.

Adjusted revenues increased 8% versus 4.2% at June. Procurements rose to 12.3% compared with 4.8% also at June, mainly driven in Q3 by higher purchase volumes and prices required to support the strong demand and reinforced system operations. Selling prices have started to increase, and the benefit is expected to be reflected in future periods. Adjusted gross margin grew 4%, and excluding the negative FX impact, would have grown 5%. Adjusted net operating expenses were 1% lower year-on-year and remained flat, excluding the FX impact. 9 months '25 adjusted other operating income excludes the EUR 382 million U.K. Smart Meter capital gain. Net personnel expenses increased 8.2% as the second quarter of '25 included some positive nonrecurring impacts. Average headcount increased by 2.9%. External services grew 1.7%, and adjusted other operating income, once excluding the mentioned EUR 382 million Smart Meter capital gain, improved by 37%, as in Q3 of '25, we had a negative impact of EUR 121 million due to the deconsolidation of East Anglia THREE.

Analyzing the Networks business, its adjusted EBITDA grew 15% to EUR 6,430 million, with a balanced contribution from the four geographies and driven by a strong performance in all of them. Networks EBITDA already accounts for 54% of the group EBITDA, reflecting the increasing contribution that will continue growing in the following years as the Chairman has commented, and as Iberdrola invests predominantly in networks.

In the U.S., adjusted EBITDA increased 19% to $1,780 million. Excluding the EUR 550 million past recognition booked in the first quarter of '25 included in the reported figures, underlying performance benefited from higher rates in distribution and an increased contribution from transmission, including NECEC following the January 16 COD.

In the U.K., EBITDA increased 20% to GBP 1,355 million with increasing contribution from transmission, driven by the new RIIO-T3 framework in place from April '26 onwards.

In Brazil, EBITDA grew 4% to BRL 10.4 billion, driven by higher revenues in distribution due to better rates and demand, partially offset by a temporary accounting negative impact from recent concessions renewal. As the investments have been completed, there is also a higher contribution from transmission.

In Spain, EBITDA increased 18% to EUR 1,586 million due to the new financial remuneration and additionally, the recognition of operational expenditure allowances from previous years, especially visible in Q3.

9 months power and customer business adjusted EBITDA decreased 2% to EUR 5.4 billion. During the period, Iberdrola produced 91 terawatt-hours of electricity, 3% higher than in '25, driven by the U.S. and the U.K. amid increasing demand, with 90% sourced locally and fully emissions-free, advancing in energy self-sufficiency while strengthening the availability and reliability of our supply.

In Iberia, EBITDA was EUR 2.9 billion, 4.6% lower, with sales increased due to demand growth, but impacted by higher procurement costs with a slightly lower renewable production, mainly due to lower wind and more gas production. We have been selling at '25 prices, but procurement cost in this quarter has been much higher. We are already selling at higher prices, which will help to offset the increase in procurement costs. The benefit is expected to materialize from '27 onwards. In addition, we registered a negative impact from regulated gas rates linked to the higher cost of gas as well as an increase in ancillary services. We are appealing to the regulator these ancillary services charges to be included as fixed costs in the rates.

In the U.K., adjusted EBITDA increased 8.4% to GBP 880 million, thanks to higher wind but with lower prices that will be reviewed for '27. Reported figures are affected by the Smart Meters capital gain in Q3 of '25.

In the U.S., EBITDA grew by 4.2% to $847 million. Growth was driven by the higher contribution from wind and solar assets, supported by 750 megawatts added over the last 12 months and stronger power prices, partially offset by lower thermal contribution as well as timing effects.

In the rest of the world, EBITDA decreased 11.9% to EUR 580 million with higher production but lower prices, also additionally affected by the sale of Hungary and France and the negative impact of higher ancillary services in Portugal. In Brazil, EBITDA increased 6.3% to BRL 1,007 million with a higher contribution from the retail business, partially offset by lower renewable production.

D&A and provisions grew 1%, reaching EUR 4,245 million, in line with previous quarters, driven by higher provisions, partially offset by the life extension in the wind assets.

Adjusted EBIT grew 11%, reaching EUR 7,645 million. Net financial result increased by EUR 524 million to a negative of EUR 1.7 billion, mainly driven by negative derivatives impact, especially in the second quarter, reflecting the East Anglia THREE positive one-off of EUR 292 million accounted in the second quarter of '25 and FX hedges linked to the exchange rates, as they were positive in '25 and negative this year, especially due to the recent revaluation of the dollar and the real. Debt cost increased 22 basis points as a consequence of higher Brazilian rates and the real appreciation. Excluding the real, debt cost fell 7 basis points to 3.47%.

Debt has had a moderate growth of EUR 600 million in the quarter to EUR 54.6 billion, even after the August EUR 2.5 billion dividend payment, unaffected by currency appreciation. The evolution in the year also reflects the strong effort in CapEx, more than offset by FFO generation and asset rotation proceeds.

Iberdrola maintains solid credit metrics with a comfortable BBB+/Baa1 rating. This financial strength allows the group to continue investing while preserving balance sheet flexibility. Our adjusted net debt-to-EBITDA stood at 3.4x. The adjusted FFO over adjusted net debt was 22.4%, and our adjusted leverage ratio 45.8%. Ratios are in line or better than in the first half and weaker than 1 year ago, but remember that we did the capital increase in Q3 of last year.

9 months '26 adjusted net profit grew by 9% to EUR 5,141 million compared to EUR 4,727 million adjusted net profit in the 9 months of '25. Excluding the FX impact, adjusted net profit would have grown by 13%. Reported net profit grew 10%. The difference between adjusted net profit is mainly explained by the EUR 1 billion capital gain from the Mexico transaction recognized in the second quarter, partially offset by capital allowances in the U.K. And now the Chairman will conclude the presentation. Thank you very much.

Thank you, Pepe. To conclude, over the first 9 months, we have seen a consistent growth trend that we expect to continue in the fourth quarter, driven by an additional 15% increase in network RAB up to December, mainly due to transmission investment in the U.S., U.K., and Brazil, and rate increases in distribution across markets like the one recently approved in Brasilia. Power and customer results will reflect 3,300 megawatts already installed in the last 12 months, plus 1,500 additional megawatts that will be operational in the fourth quarter, benefiting from higher prices expected year-end and in 2027, as well as the increasing contribution from pumped hydro in Iberia through the new assets in operation.

Finally, cash flow generation will continue increasing due to new investments, mainly in regulated networks and long-term contracted businesses, and to our ongoing operational efficiency measures, supporting our strong financial position and our BBB+ rating. All these factors allow us to improve today our guidance for full year 2026 results to more than 10% growth in adjusted net profit. And we are targeting to maintain a 10% average growth rate in adjusted net profit over the next 5 years, benefiting from increasing investment opportunities in networks, renewable generation, and storage across all our markets.

Our anticipation, our business model, and our execution capabilities place Iberdrola in the best position to capture these opportunities. Over the last 25 years, we have built a non-replicable footprint of network licenses across the U.K., U.S., Brazil, and Spain, and shortly also in Finland, and a competitive and diversified generation fleet with increasing repowering and life extension opportunities, as well as a mature portfolio of greenfield projects across all our geographies, strong commercial capabilities, and a large base of residential and industrial customers, a solid balance sheet, and full access to capital, supply chains, and talent. So we will provide you further details regarding all these aspects in our Capital Markets Day next March. So thank you very much for your attention. We can now begin with the Q&A session. Thank you.

Thank you, Mr. Galán. And the following financial professionals have raised the following questions: Alberto Gandolfi, Goldman Sachs; Meike Becker, HSBC; Pedro Alves, CaixaBank; Peter Crampton, Barclays; Rob Pulleyn, Morgan Stanley; James Brand, Deutsche Bank; Peter Bisztyga, Bank of America; Ahmed Farman, Jefferies; Manuel Palomo, BNP Paribas; Fernando Garcia, Royal Bank of Canada; Skye Landon, Rothschild; Jorge Alonso, Bernstein Societe Generale; Javier Garrido, JPMorgan; Javier Suarez, Mediobanca; and finally, Gonzalo Sanchez-Bordona, UBS. The first question is related to the main drivers of Iberdrola's adjusted net profit growth in the first 9 months of the year 2026.

So I think the business drivers were very clear. Networks higher RAB in all countries, as I mentioned, reaching EUR 56 billion. Also, we have a strong performance in all countries. U.K., higher contribution from electricity in the North West that we consolidated in March, increasing contribution from transmission with the T3 that we had started construction in April. And U.S., higher rates in New York and Connecticut. The contribution of the transmission, the interconnection between Canada and Massachusetts, and NECEC from January. And in Brazil, increasing revenues in distribution, thanks to better tariffs in most cases, better rates, higher contribution of the transmission I mentioned we just completed. It's more than 6,000 kilometers of transmission lines completed. In Spain, a strong performance, thanks to the investment recognition of OpEx allowances from previous years.

In power, higher demand in Q3. And the only problem here is with prices fixed in 2025 resulted in a higher procurement cost, as has been mentioned by Pepe. But now is the new sales are already reflecting these new prices. And so I think that can be already a positive contribution on that one. Higher production in the U.K., U.S., EU countries, and an increasing contribution of pumped hydro, especially that one, we are beating records of production during this year. Negative impact as well of regulated tariffs and the increase in ancillary services in Iberia, which we are asking to be regulated. As you know, that is the case of Portugal, where they are already in this moment just putting part of it as a part of regulated things, which is not affecting negatively to us. So all in all, I think the adjusted net profit was 9%, which is 13% if we are excluding the FX impact that Pepe mentioned before as well.

Next, what nonrecurring items affected EBITDA and net profit in the first 9 months of 2026? And how do they compare with the 2025 fiscal year? Pepe?

Yes. Well, as you know, in such a large group, there are always some nonrecurring impacts across the different businesses. But as we have defined them in Page 18 of the presentation, basically, it comes from the asset rotation capital gains or losses in general, and we've been consistent on that. There is an exception with this accounting treatment of the sales in the U.S., which didn't have a cash impact. So basically, at the EBITDA level in '26, there is no adjustment from nonrecurring impacts, defined as we have done it in the Page 18.

And in '25, we have had -- we are taking the positive impact of EUR 530 million due to the network past cost recognition in the U.S. and the positive impact of the EUR 382 million that we had also positive in the U.K. due to the sale of the Smart Meter businesses. And obviously, at the net profit, the impact of these two is netted from taxes, so EUR 389 million from network cost recognition in the U.S. and EUR 191 million for Smart Meters in the U.K. And in addition to that, we had the EUR 953 million of capital gains from the asset rotation this year that we are taking out for reflecting on an adjusted basis.

Next, which are the main drivers supporting the upgrade in your 2026 guidance?

So as I commented last July, our good performance in the first half has already improved in this quarter due to things I mentioned before. I think increasing our regulated asset base in all countries. I think we are investing more. So the RAB is increasing in all countries. There are some frameworks with better rates as well in regulated. It's as well increased contribution from our transmission business. The T3, I think as much investment we are making, that is directly contributing to our P&L. And NECEC is already fully completed. And in Brazil as well, all our transmission is completed now is, as I mentioned, is making a contribution of circa EUR 250 million to EUR 200 million per annum additional. And also the full ownership of Neoenergia. Since the beginning of the year, we have already this Neoenergia, which is 100% our own.

I think power, as well I mentioned, I think we had already built 3.3 new gigawatts in the last 12 months. But I think to this one, we will add another 1.5 gigawatts before the year-end, which now is in construction. I think we have -- we are achieving better prices. I think as -- was mentioned by Pepe, we have been selling most part of the year with 2025 prices in our retail business, that now we are already just signing [ 2026 ] for the rest of the year and for 2027, prices much higher according with the wholesale prices of the market. And that will transform this negative impact we have already had on this one into a positive one. As well, as I mentioned, we are beating records in pumped hydro, and we expect that to continue as well in the following months.

Of course, our efficiencies, we will continue systematically on that one in all terms. Now certain of these efficiencies is coming as well by the introduction of artificial intelligence in some of our processes that is already just starting delivering some positive effect. The positive management of the debt and financial expenses, Pepe mentioned as well. And that all the reason -- this reason is what has already allowed us to provide already to increase the guidance to double-digit growth in adjusted net profit by year-end, more than 10%. So that is what we have been saying before.

Next, regarding the next Capital Markets Day. It has been over a year since you presented your strategic plan. What has changed? What upside do you foresee for your current plan? And what should investors expect from the next Capital Markets Day?

So I think all the trends and all the expectations is already moving in our direction. So you see -- I presented already the documents that have been made by the International Energy Agency, by the European Commission, by the British government. So all of them are coincident with our vision, which has been already developing across the last 25 years. And that's a lot. So increase in electricity demand, more electrification. So that makes ourselves that we need to make higher investments than expected, both in networks and in power and renewables. And I think if we make more investments, if the demand is increasing, if the prices look already like trends which continue at a good level, this provides better results. And that is what allows us to fix already this target of 10% average growth in adjusted net profit for the next 5 years.

Nevertheless, I think we will provide you more details in our Capital Markets Day. But I think I'm quite optimistic. I think for years, I think we've been predicating renewables, networks, and storage. And now all the documents being published are talking about more power renewables, more networks, and more storage. So -- and I think we are 25 years already making this one, so which I think we have the basis for growing more than no one else because we have already the base for making this already growth much higher than others. We now are discovering that it is needed to make more power renewables, more networks, and more storage.

I think as I mentioned, in terms of networks, we have already a unique footprint. So we are present in different countries and all countries are already with the same targets. United States for one reason, U.K. for another reason, Iberia for another reason, and Brazil for another reason, and soon as well Finland for another reason. So -- but all of them are coinciding on one thing, needing more and more and more investment in networks, transmission, and distribution.

So in transmission, for instance, if you look already at our documents, I think now it represents roughly one-third of our total RAB. So it was almost nil a few years ago. It is not considered, but the growth in this area is huge. In the U.K., we multiplied by 5 our transmission business. In the United States, we have billion transmission in this moment in construction for injecting electricity into New York City. In Brazil, we just completed almost EUR 5 billion of transmission lines that we had nothing a few years ago. So all those target trends will make us to be already positive and optimistic about the future of the results of the company.

Next is asking about Caruna acquisitions, approval processes, explaining the strategic rationale and expected return from this new company in the group.

David?

Thank you, Chairman. Regarding the approval process, the authorization progress is advancing as expected. There are three regulatory approvals required to close the transaction. The first one is the European Commission antitrust that has been already received. The second one is the European Commission FSR. All questions received during the pre-notification phase have been replied successfully. And after positive feedback received from the authorities, the formal notification has already been submitted. And third is the FDI in Finland. The filing has been submitted and the authorities are processing it. As a conclusion, approvals are expected to be received before the end of 2026 and transaction closing is expected early in 2027.

Regarding the strategic rationale and expected returns, just to remind that Caruna is the largest distribution company in Finland, serving 1.5 million population. Finland is a market that will require huge investments due to electrification with additional opportunities in AI and in transmission. A clear example is the recent announcement made by Google of EUR 15 billion in data centers. Caruna has high-quality assets and a strong team in a stable AA-rated country. It is an accretive transaction since the first year, and net profit is expected to grow at an average of 7% rate in the next decade. Just as a reminder, we financed the transaction with the funds and the capital gains obtained from the sale of our thermal generation in Mexico.

So I think I had the opportunity last week to visit Finland with the occasion of the official visit of the Spanish King and Queen. I had the opportunity of meeting in the official dinner with the President of the Republic, with the ministers, with the Prime Ministers, and with members of the financial community. I think I came more than delighted. I think we are more than welcome. Everybody was very positive toward our transaction, our deal. The country expectation is very, very positive in all terms. It's tremendous stability politically. So independently who is running the country, I think there are clear ideas about what has to be done in our sectors to provide stability and predictability.

They would like to continue expanding the grid and repowering the grid to electrify more and more and to make the grid even more reliable. I think more than half of the grid is underground, so which I think that is something which is unique in Europe. But they would like to continue making in the same line. So I was very positive and delighted, and I'm very glad what David has mentioned that all the permits are going to be obtained soon and to complete the transaction even shorter than expected.

Would investors expect further M&A transactions after Caruna? Sorry, I repeat because my phone was off. Should investors expect further M&A transaction after Caruna?

So I think you know always my answer. So I think let's first complete Caruna and lets me afterwards to talk another thing. I think historically, always, we have already made the same process. We are very predictable. We integrate -- we acquire something, we integrate. And when it's fully integrated, we start thinking on other opportunities. But we are not making 3 things at time. I think it's first now priorities and focus is to complete the transaction of Caruna. Once will be completed, we will integrate this Caruna into our system. And who knows what is going to be in the future.

But now it's not our future. It's not -- we are not already dreaming and thinking what you're going to make in 2033 once I think now it's all our people is fully focused, as David was mentioned, is looking and accelerating all the permits needed. All our business people are already prepared for making the integration and with the rest with the [ metal ] system processes, et cetera, et cetera, of the group. And when this will be completed, we will see, but now it's not looking at more things than those which is already, as always, complete the transaction, integrating the transaction.

Next is, what is your view on the new U.K. government and its approach to energy policy, regulation, grid investments and the autumn budget?

So the first thing is the Prime Minister is not an unknown for Scottish Power. So you know we have already worked with Andy Burnham and his team in the Greater Manchester area during the time he was a mayor. So we have the distribution in this area. We know well his administration and all the things related. But I think what we are seeing on the comment he is already making already, we are seeing continuity in the key policies. So I think they continue with more support to electrification. They are looking for more self-sufficient in the country, using all kind of means for making that happen.

So they would like to diminish the external dependence of import, which is coincident with the European Commission is already predicating as well. That commission is trying for all means to increase the share of electricity, not because only electricity is because of diminishing dependence of importing energy from third parties of fossil fuels and others. So in this sense of more electrification, the government has announced reduction to 0 to the VAT for electricity bills. And as well, they are already announcing the acceleration of more grid connection, even if pushing us to accelerate that one, opening the door to a special company, which is based in British grid or something else, which is a little amount, but I think it's already just is only EUR 4 billion more than EUR 100 billion investment required.

So -- but I think that is an incentive for moving faster, and that can help already as well for obtaining permits and on turning already acceleration and more agility in all the things which is needed for being faster. You know as well that the regulation for transmission is already giving incentives for acceleration of the contraction. We can reach even 100 basis points extra return if we accelerate and we -- that is why we're working very hard.

And the government is very, very pushing on that one. That is the British government, but I can say exactly the same thing related to the Scottish government. I had the opportunity to have a meeting with the Scottish Prime Minister last week as well. And I think he was more than pleased in helping us for doing the necessary for accelerating all the investment required in the Scotland for making already more electrifying more and more the economy because of the positive effect we have already for the economy. There are still thousands of megawatts pending connection, and that is what we have to deliver as soon as possible for the benefit of the British citizen and the Scottish citizens.

Next is regarding Spain. What is your assessment on the regulatory measures being considered in Spain, including the removal of the 7% generation tax and a higher investment limit for electricity networks?

So I think the removal of 7% of generation tax, I think is certain, that's good. That is going to reduce retail prices and wholesale prices that is positive. I think that will be -- you have to be aware, that is going to be implemented gradually from now to 2028 and following one. And there are certain conditions as well as certain fix on that one. I think that is not new. That is following the recommendations of European Union to reduce taxes on electricity and to promote electrification.

So I think it's very current with the European directives in the sense of helping to more electrification and penalizing less electricity toward another fossil fuel sources. And other positive things. I think in the case of networks, it has already been eliminated the restriction to invest. So that is positive. You remember that was linked to the GDP and so on was something which is not already reflecting the reality of the needs of the country. Also has been introduced certain improvement in the rate case of distribution with certain incentives for improving -- which can improve the return of equity that gave us the incentive to accelerate our investment.

So I think it's -- the numbers, the return on equity they gave was quite low. But I think with this potential incentive, then we will fight for achieving that makes already more attractive. So all in all, that makes that our expectation is to invest on the range of EUR 1.2 billion in distribution in 2027, which is more than 50% of that one we've been making in 2025.

So which I think we feel is positive is rational. So we need already connection. We need to make more connection, and we need already to refurbish the grid, and we need already to expand the grid. And I think that is what now has been removed all this limitation and they are giving incentive same than U.K. for another reason to accelerate to make things better in a proper manner.

Next is another about Spain. Are you concerned about possible government intervention in the Spanish electricity market?

So I think all what we are hearing at level of European Union at the level of Spanish government and a level of all the stakeholders is they are talking about oil and gas. They're not talking about electricity. All the measures they are already is mentioning in oil and gas as areas where they can already look how to protect the consumers if the prices continues increasing. The fact they are taking measures on this one. They are reducing taxes to oil to gas and to diesel for consumers. And I don't know if they are planning to make another thing. They are already requesting to make some kind of taxation for oil and gas, but never they are not talking about electricity.

I think that was the letter sent by different European Union countries to the commission, which was included in Spain. It was absolutely in this line. But I think the document has been sent by a statement made by President von der Leyen and Commissioner Jørgensen and other commissioners are clear. They would like to distinguish clearly between fossil fuels and electricity and all are very focused on promoting electrification.

I think you listened the President of the Commission, Ursula von der Leyen in her speech, she was very, very clear that her ambition of diminishing the European dependency through investment more and more in local sources and investing more and more in transmission and distribution and looking for a central planning, European central planning and promoting for all means the use of systems like heat pumps, transport, electric transport, et cetera, et cetera, et cetera.

So all -- I think now the European Commission and the European countries understood clearly that the problem is not electrification. Is the solution for the external dependency of the countries and for avoiding the crisis, which time to time is happening as a consequence of the import of energy for their countries. Energy, when I said energy, I mean oil and gas.

Next is what the new and the proposed capacity market in Spain? Any insight of the calendar?

So I think we are seeing every day how Red Eléctrica, the Spanish system operator is already just making worries about the level of lack of enough synchronous power and they are already just forcing to stop already to disconnect certain big users and that are already giving us not permission for making some kind of maintenance of the synchronous, et cetera. So I think that means that the need of more synchronous power in the system is clear. I was repeating that one for many, many times. I think in the blackout I was insisting the lack of enough synchronous power connected to the system.

And I think that is for that thing is what is this is necessary this capacity payment, you would like to keep already enough power available for that one. I think still that is in final details. I think there are already some documents for making already this happen. I don't know if that is possible or it's not possible to make before election because the election is already stopping a bit all those things. But I think all the, let's say, administrative work is ongoing. And I think the terms of that one is clearly defined. All technologies are allowed to participate. There are different kinds of -- depending of the level of consistency of one or another one. But I think it's something which looks already moving in the right direction, but I think we have to expect that I don't know before the election, after election, but now it's moving faster, that one.

Next is again about Spain. How do you expect Iberdrola's retail margins in Spain to evolve over the long term?

I think Pepe was mentioning clearly, I think we've been -- fortunately, the demand is growing. I think that is a very positive thing. I think demand in August grew by almost 5%, which I think that is precisely the numbers, which is the international agency is mentioning that the demand in most Western world is going to move from 2% to 5% or 4%, 5%. So I think that's positive. What happened in our case? I think we sold in 2025, our expected production at the prices at that time they were and the prices were lower.

If the demand is higher, we have not enough already production of our traditional sources with most of them are already renewables. And we are forced either to generate with gas, with our CCGT or to buy electricity from the market. And I think for covering the excess of demand, and that is affecting to our accounts. I think we are selling at the prices based in the previous prices, and now we are forced to produce or to buy at prices much higher as a consequence of the today's situation of the gas prices. But I think that is changing. I think in this moment, we are adjusting all this renovation of contracts, we are already modifying the prices for adapting to the new terms.

So I think we are going to benefit of the new prices of those contracts that we are already renewing during this period. And those is going to be the prices for 2027, which should be based more in the actual prices and then those what we can already expect next year. As well, then we are fixing all our expectation of production of our, let's say, renewable sources together with the other sources that we complement always. But I think we are positive because prices are higher, covering already the gap between what is the cost for certain marginal cost that we have already for this excess of demand. But the positive thing is the demand is growing. That is a very good news because that means the electrification of the country is already been accelerating, and that's good.

Next is regarding the U.S. What opportunities do you see in the U.S. renewables market, particularly from new projects? Are you seeing higher appetite for signing new PPAs?

So we are seeing in the U.S. a huge demand of I think it's -- we are seeing there is project by international agency. And we are seeing as well in the last 18 months, United States has already installed something like 89,000 megawatts of new renewables and batteries, which I think that means that there are demand for that one. And the expectation is in the next 12 months to continue in the same range. I think we identified something like 80,000, 85,000 new megawatts, which is going to be built in the next 12 months.

And of course, we are benefiting of this demand. As we -- as I mentioned, we have installed 750 megawatts in the last 12 months. And we have already much additional project online for the next 5 years in 2 lines. One is extending life of the existing assets or repowering those ones. What we are selling, making new PPAs at higher prices. So we are continue having appetite of PPAs at prices better than those one we have already signed before.

And I think is I can already say last week, I was in the United States, and I can already -- I saw already the optimism in our people for already for building more and to benefiting of this extra demand. So I think we have a unique position. I think we have 11,000 megawatts already in operation of renewable wind mostly. And I think most of those can already be either extending life or repowering and selling new PPAs as we are doing in this moment. So we are optimistic that the next few years, we will -- months, we will continue already increasing our fleet and our numbers and the contribution of our power business in the United States.

Next is about U.S. Can you provide an update on Avangrid's rate cases in New York and Maine?

Pedro?

Thank you, Chairman. I think in the U.S., first, we finished the rate case in Berkshire in Massachusetts, which is a 3-year rate case that's done. I think in New York, we got $2.2 billion of capital expenditure approved between now and the end of May next year. So we're also done $2.2 billion. We're working right now on the OpEx related to the period and also on a multiyear rate case to be approved as well. I think it's important that whatever we get approved next year, there is a make-whole provision, which basically means everything starting June 1, '26 will be already considered in that remuneration that will be approved. I think in the case of Maine, we were focused on the storms recovery. We got everything that was pending last year, several hundred millions. Then early this year, we filed a rate case. That rate case is expected to close in April '27. And it will be all the investments we have done in the last 18 months plus 1 year forward. That's what we expect to happen in April next year in '27.

Next is, which is your outlook for power prices, volumes, sales and commercial margin across Iberdrola main geographies?

So as I mentioned, the demand is increasing. And as I mentioned as well, we are seeing higher prices. And so I think if we expect the due at these higher prices, our margin will already improve in the rest of 2026 and 2027. I think the conditions for the -- a bit lost what is already the situation of the Gulf. But I think it looks that the situation of gas prices, the forward prices are not already diminishing much. So if that continues in this one, I think probably the prices will continue higher for a while. I think it's -- I wish that finished as soon as possible. But if not, I think we'll be depending on this one.

In any case, prices reach are not already those ones we had already in 2021. So I think it's -- we are already at a level prices, which are much lower than those we achieved at this period. I think this year, at least in Spain and France, in Portugal, I think the highest prices are probably on peak EUR 140, EUR 130, EUR 150. But the average price on the year is on the range of EUR 70, EUR 60, EUR 70 still because we have the first part of the year very low prices. So I think the average is higher than previous, but not much, so which I think that is a reality. So we have not considered only the situation -- puntal situation, but as well the average of the year.

There are a couple of questions on data center, including what opportunities data center and artificial intelligence can create for Iberdrola and our opinion about the Spanish royal decree to regulate their development in Spain.

So I've been already mentioning to you the artificial intelligence, we are very positive on it because it's another source of demand growth. So I think it's -- but is another like is cooling and heating, like it is transportation, like is electrification in certain areas of the industry, et cetera, et cetera. So that's why we've been doing our best to facilitate that this new demand will be installed. So we are helping to our customers to invest in data centers, providing in the case we can land connection permits, power, et cetera, et cetera. I think that also is very good for networks.

I think it's the extra investment on networks, the extra cost that can already provide this extra investment in networks can be diluted for the citizen for the higher consumption of these data centers. Which I think all citizens can benefit or lower fixed prices in their bill in the tariff as a consequence of the largest use of energy of those one, we can already contribute heavily in the -- supporting the cost of the networks.

So as you know, we have already PPAs for almost 14 terawatt hours. And I think we continue already making those one. Every year, we make another 3 or 4 terawatt hours additional, and we continue increasing. I think almost half of those one or more than half is United States. But as well, we are in Iberia, we are in U.K., we are in other markets as well. So in terms of the regulation of data centers, so -- well, my position is really clear. It's going to happen. Data center is going to be built. So they are already -- they are, in some cases, having certain concern about the consumption of water for refrigeration, but they can be refrigerated with water, they can be refrigerated with air or in the case of fill, they can use for central heating.

It can be already used the extra heat can be used for avoiding already to boil -- to burn gas or to use some other things for making already central heating, we can already be connected. So in the case of the jobs, et cetera, so certain that is going to provide job, different type of job, but it's going to provide hundreds of thousands of new jobs on that one. So I think all the arguments which in use, I think I'm sure that it is going to come in due time.

I think when I listen, the water consumption remind to me once somebody said the nuclear cannot be installed because they make consumption of water. And I said to this one -- we said to me that one said the consumption is exactly the same one that the coal power plant because the [indiscernible] cycle is the same one in the cycle of Rankine, which is exactly using the same thing, steam, which is transforming in water and afterwards is steam and water and refrigerated. So that is the same thing.

It is already need to be refrigerated, but that means for refrigeration. We have power plants which are refrigerating with running waters. We have power plant refrigerated with air, and we have power plant chimneys of hydroelectric chimneys, we can refrigerate with less consumption. There are many means for that one. And the central heating is reality in many countries with the central heating exist as a way of heating the people there.

Next is how do you assess the outlook for offshore wind in Europe and U.K.? And what criteria guide Iberdrola's participation in new auctions is?

So I think in this moment, we have 7 offshore wind farms in operation. We have already a track record and experience in building and delivering. We participate in all the auction, all this space in selective criteria. But with one clear idea, if we participate and we win, we deliver. So we are seeing in this moment that in the Western world, more than half of the auction awarded has not been built. So almost 78 gigawatts has been awarded in our core markets. Only 50% has already -- even though completed, has FID.

So -- but only 4 or 5 has already finally built. But we participate with commitment towards the authorities, then we will build those one if we win. So many others are already coming there as an auction. Then we build doesn't depending on many things. When we make an auction, we already secure our supply chain, guarantee all the terms, permits, et cetera, et cetera. And I think it just execute. That's why all our wind farms are all of them being executed in some cases, even having tremendous difficulties, regulatory difficulties, but we always succeed in making that happen.

So what is the criteria? First, if we go, it's because we would like to build. So -- and I think I repeat to all the governments, the big difference between ourselves and others is that always when we bid and we win, we deliver. So -- and I think those countries, what they would like to have already show a success on auction because many bidders, but they don't care about how many of those are executed is fine. In that case, we don't play this game. We play the game and presented already some project with looking for strict profitability, a balanced risk between the construction and operation.

We always go with a secure supply chains always prior to the bid. So -- and with -- always as well with the offtakers at a great price. So we are not already insisted for us, it's not an auction just to see if we have opportunity or not. We have already the commitment of execution, which is our -- if you put in our brand, Iberdrola equal execution. Iberdrola never failed, always executed.

Last question. Looking beyond 2030, what do you expect from the long-term investment cycle in networks? And do you believe the current growth trajectory can be sustained?

So I showed to you in my presentation that our planning is to accelerate investment in networks up to 2030 and beyond. And not because we are planning, it's because we are requested by regulators and by countries to accelerate that one. I think the case of Spain or the case of U.K., introducing incentives for moving faster. So I think that it's a clear term. The European Commission is recommended to give already better, let's say, make already more attractive. The investment on that one is thing. I think it's the electrification is here. I think it was my dream 25 years ago. Now it's not a dream, now it's a reality.

So the demand is growing in all countries. The number of electric vehicles because of this energy crisis is booming in all countries. Now the problem is if it's Chinese, Japanese, Korean or European or American. But I think the demand is there and the cars are already being installed. So the electrification is a fact. I think -- but I think that needs already networks for reconnected. It's no connection only between the production centers to concession center as well it's already the connected between the concession centers and to make already this concession center more reliable to put much more power.

So imagine that suddenly Madrid decide that all towns, all the city will be ready with heat pumps, which now is being promoted. So we need already to expand the power of all our connection. All our grid need to be double or triple the capacity at present. And that means new -- reinforcing the cable, reinforcing the substation, reinforcing the transformers because that is happening.

And I think I used to say that probably our sector is the only one, which always we are behind the demand. Normally, the factories, I make the sample, the factories are made after the roads are built. Here, we make the factories and afterwards, we are looking to build the road. So that is what European Commission would like to change the trend. So let's put readiness infrastructure for facilitating electrifying many, many uses because if we are expecting, then the usage will be built. Before the connection, that never happened because the people is not ready to build the factory, expecting then the connection arrived. It's looking for the connection for starting the factory.

So now the trend which is moving. That's why we are receiving this new incentives for accelerating and accelerating this investment. And that is what we are present. I think we have a unique footprint, United States, U.K., Brazil, Spain and soon as well, Finland and Australia, what all are the same thing. So any country ago is double, double, double. I was -- last time I was in Brazil. They already extended the life of the concession, but the condition is you have to invest more in networks, double. So I think that is the reality we are facing everywhere.

Okay. 10 minutes more than the expected end of this conference call. I will now hand the floor over to Mr. Galán again to close this event.

So thank you very much for taking part in this conference. As usual, our Investor Relations team will be more than available for any additional information you may require. But I hope that, that has been useful for you and the explanation we provide and the expectation -- the positive expectation for the short term and the medium term as well. Thank you very much. Thank you.

Good morning, ladies and gentlemen. First, we would like to extend a warm welcome to all of you who have joined us today for our 2026 first half results presentation. As is customary, we will follow the traditional structure of our events. We are going to begin with an overview of the results and the key developments during the period.

The presentation -- Q&A part will be delivered by the top executive [indiscernible] as today. Mr. Ignacio Galan, Executive Chairman; Mr. Pedro Azagra, CEO; and finally, Mr. Pepe Sainz, CFO.

After the presentation, we'll move on to the Q&A session. I would like to remind you that we will only be taking questions submitted through our website. Please send your question exclusively via www.iberdola.com. Finally, we expect that today's event to last no more than 60 minutes. Should any question remain unanswered, the IR team will as always remain fully at joins. We hope that this presentation will be useful and informative for all of you, now without further ado, I would like to hand the floor over to Mr. Ignacio Galan.

Thank you once again. Please, Mr. Galan.

Thank you very much, Ignacio. Good morning, everyone, and thank you very much for joining today's conference call. In the first half 2026, reported net profit increased by 22% and reaching [ EUR 3,336 million ] and adjusted net profit up 8% to $3,565 million, reflecting strong operating performance up to -- adjusted EBITDA rose by 7% to more than EUR 8 billion driven by [ networks ] up 13% due to tariff increases and higher asset buys in all geographies. Adjusted EBIT in powering customer increased 1% due to higher production and margin, especially in the second quarter and the condition of [ pump storage ], which already accounts 35% in our total hydro generation.

Investment rose by 24% to more than EUR 7 billion, with 72% located to U.K., the U.S. and Brazil, including the acquisition of Neoenergia minorities. Networks accounted for 2/3 of the total investment, driving 11% increase in our regulated asset base to EUR 55 billion. In Power & Customers, up to June, we have commissioned 1,600 additional megawatts. And we are accelerating the addition of new capacity due to increasing demand across our geographies, especially in U.S. This is also driving governments and regulators to approve new framework to guarantee the availability and sufficient power and the reliability of transmission and distribution networks.

In Europe, in the last week, the commission has published decreased package to increase network investment as well as several injective reduced taxation on electricity in a new electrification plan with very ambitious targets to double electrification rates. The U.K. also continued showing full commitment to electrification with increasing braceability, on the need of additional investment in transmission and distribution supported by attractive remuneration schemes.

Finally, in Brazil, the renewal of distribution concession for 30 more years was signed reaffirming the country's attractive regulatory outlook for the coming years, supporting our recent acquisition of Neoenergia minorities for EUR 1.1 billion, as mentioned. In this context, our increase in investment during the first half, we have also continued preserving our financial strength with an FFO to adjusted net debt ratio of 22.4% and liability of more than EUR 21 billion.

As you know, yesterday, we announce the acquisition of Caruna network, the largest electricity distribution in Finland with an enterprise value of $5 billion. Under the agreement, [indiscernible] will acquire 80% of Caruna for EUR 2 billion which EUR 1 billion will be paid in 30 months. The remaining 20 % stake will continue in hands through Nordic investment and pension funds. Caruna operates to distribution areas with major activities around Helsinki the main condiment area in Finland and [ joints ]. In total, Caruna has 89,000 kilometers of line, almost 70% underground.

The transaction that we expect to close in the first quarter 2027 perfectly fits our strategic focus on regulated networks. With the recent investment of our remaining Mexican power plant, we will be changing thermal generation for a fully regulated company within an asset base of EUR 2.5 billion. That served to more than 20% of the electricity [ storage ] in Finland, a country with AA+ rating in Eurozone. With a stable regulation and a strong demand growth prospect, given the ambitious electrification target saved by the government to reinforce any security sufficiency.

As a result, Finland system operators estimate demand growth between 22% and 45% up to 2030. Which will require a strong increase in generation. For instance, the system operator [indiscernible] estimate the wind capacity will multiply by more than 3x in the next 10 years, reaching 30-year by 2035. To secure the network investment required to support this growth, Finland has set a stable and predictable regulatory framework for electricity solution till 2031. With attractive condition, including an average return on equity around 8%, 100 basis points, to give you an example, above Spain.

The transaction will also have a positive impact in our results and growth prospects. It will be accretive from the day 1, and we expect a sustained loan chain growth of around 7% per annum in the net income, thanks to additional investment up to between EUR 200 million and EUR 300 million per annum. With further upside due to electrification, the expansion of the centers and the possibility of the low 400-kilowatt transmission lines opened by the Finnish regulator earlier this year.

Finally, given its size, its regulated profile with supportive framework and its cash flow generation, there is not enough headroom for this transaction in our current credit ratios. All in all, this deal is an excellent opportunity to accelerate the execution of our strategy by increasing our expansion to regulated networks in a country with a high rating, attractive regulation and [indiscernible] growth prospect.

Coming to the numbers of the presentation. Adjusted EBITDA increased by 7% to EUR 8,050 million, supported by a stronger performance in the second quarter compared to the first quarter. Network adjusted EBITDA reached EUR 4.2 billion in the first half, up 13% compared to net customers registered in the first quarter. In Power & Customers registered an adjusted EBITDA of $3,800 million, up 1% year-on-year, driven by positive dynamics in the second quarter. By geography, in the U.K., EBITDA rose by 14%, supported by the higher contribution of transmission following the beginning of RIIO-T3 as well as a strong increase in production up to 27%, thanks to the onshore and offshore wind. In the U.S., excluding the one-off impact of Networks past cost recognition in 2025, EBIT increased by 6% thanks to a higher rate in New York and Connecticut and the contribution of the NECEC interconnection line between Massachusetts and Canada.

In Brazil, EBITDA grew by 90%, driven by tariff increases in distribution and the new transmission line in operation as well as the good performance of Power & Customers. In Spain, EBITDA is up by 2%, thanks to a strong hydro output, mainly from pumped storage, which has allowed us to increase production and maintain our reservoirs close to record level of 73% of the total capacity, equivalent to 8,300 gigawatt hours of energy stored.

Finally, the bid in another European countries and Australia was affected by the impact of ancillary service costs in Portugal and the sale of our onshore activities in Hungary and France, despite and overall trade increase in production, mainly in offshore in Germany and France. All in all, 83% of our EBITDA comes from [indiscernible] countries.

Regarding FX evolution, the depreciation of the dollar and the pound against the euro has a negative impact of EUR 106 million as of June on our operating results. This means that including this effect -- excluding this effect, the increase in EBITDA will have reached 9%. Investment in the first 6 months were up 25% to EUR 7 billion, with 72% in the U.K., the U.S. and Brazil. 30% of the total investment we have made in U.K., mainly interest mission and distribution networks. 70% in the U.S. with increasing investment in distribution and offshore renewables offsetting the completion of NECEC and [indiscernible] project. And 25% in Brazil, including the acquisition of Neoenergia minorities. Spain represented 14% of the total investment in Australia and other EU countries remaining 13%.

By businesses, Network continue to be our main investment destination, accounting for nearly 2/3 of the total. To reach EUR 4.4 billion, up to 42% year-on-year, mainly driven by U.K., which represent 1/3 of the total network investment after 43% increase driven by transmission. The U.S. account by 22% of the total as ongoing investment in distribution partially offset impact on NECEC project 1 is completed. The contribution of Brazil reached 40%, including EUR 1.1 billion due to the acquisition of Neoenergia minorities as mentioned. And this represents 7% of the total investment.

As a result, our Regulatory Asset Base rose by 11% year-on-year to EUR 55 billion, thanks to the double-digit increase registered in the U.K., U.S. and especially Brazil were rose by 18%. Transmission was once again the key growth driver. With RAB up 30% in just 1 year. By RIIO-T3 in the U.K. NECEC in the U.S. and the completion of the large transmission lots in Brazil. Distribution RAB increased by 6% to EUR 40 billion well spread among geographies.

Investment in renewables reached EUR 2,234 million with 70% allocated in wind increased $700 million in offshore, mainly in East Anglia 2 and 3, in the U.K., Windanker in Germany and Vineyard Wind 1 in the U.S. are more than EUR 900 million on onshore wind, mainly in the other European countries in Australia. We also invested around EUR 330 million in solar PV and [ EUR 300 million ] in the storage and others.

All in all, up to June, we have put in service 1,600 megawatts. And we expect to accelerate additions of capacity from the second half of the year, supported by the demand growth and the strong appetite for PPAs. As a result, by the year-end, we will install 2.1 gigawatts more than 50% East Anglia THREE offshore wind farm in the U.K. We have another 2.2 gigawatts already under construction, 2/3 in U.S. and U.K. Plus 3 gigawatts more ready for final investment decision in the coming months, [indiscernible] been in the United States, mainly corresponding to repowering and life extension. In order 4 gigawatts in advanced development that could be ready by the end of the decade.

This means the capacity addition by 2030 can reach up to 15.5 gigawatt significant fleet versus 9.5 gigawatts between 28, included in our plan. This increase internal investment in solving reinforced by governments and regulators who are taking additional measures to secure the viability of power and the reliability of network infrastructure to obtain all the benefit of electrification in terms of any security [indiscernible] competitiveness.

European Union, only the last few weeks, the commission has published an ambitious grid package to increase network investment through faster permitting additional incentives. In electrification action plan, which sets specifically vision target of 43% by 2040, doubling current levels in just 50 years which could also mean multiplying total demand by 2 in the period. The plan announced measured incentivized heat pumps, electric vehicles and charging infrastructure. And proposed elimination of subsidies to fossil fuels and a strong reduction of taxation and electricity in line with several commission recommendation [indiscernible] published in the United Kingdom.

RIIO-T3 continues progressing as schedules with our [indiscernible] decision already published. And the independent system operator has issued an updated plan beyond 2030, showing the network investment will continue to increase strongly in the next decade. In Brazil, following the renewal concession for 30 more years, Neonergia doubled this investment plan in distribution in the next 5 years [indiscernible] represent EUR 9 billion. Mainly in Bahia, where a few weeks ago, I could see personally a huge increase in power demand, driven by the electrification of the western part of the state and digitalization of recruiter and other sectors.

In the U.S., new rate case progress as expected. For example, in New Year, where the regulator recently put $2.2 billion investment for this year and confirm the new tariffs we expect to close by year-end will have retroactive effects in May. And in Australia, we continue to sell to see full support electrification from federal state authorities are reflected new auctions in generation, storage and transmission.

In terms of financial profile, our FFO net debt ratio reached 22.4%, and net EBITDA is fully consent with our BBB+ rating and our liquidity stands at EUR 21.5 billion covering 20 [ motor ] financial needs. As you know, our last AGM approved a dividend per share corresponding to 2025 result of EUR 0.685, equivalent a total dividend payment of EUR 4.5 billion, 2% more than previous year. According to Monday, we will pay EUR 0.47 per share as supplementary dividend.

The average both received AEM was 97.9%, an with a quarter on 73.6%. Let me thank you all, our shareholders once again for their participation and support.

Now you, Pepe, explain the result in more detail. Thank you.

Thank you very much, Chairman. Good morning to everybody. The first half reported net profit grew 22% to EUR 4,336 million, and the adjusted net profit grew 8% to EUR 3,565 million, supported by a 7% increase in adjusted EBITDA to EUR 8 billion. Since last year, the dollar has depreciated 6.8% against the euro, the pound 3.1%, while the real appreciated 4.6%. As a consequence, FX has had a negative impact on the P&L. Excluding it, as the Chairman has commented, adjusted EBITDA growth would have reached 9% and adjusted net profit growth, 14%.

The adjustments to the reported P&L, which are limited and aligned with our guide and definitions as the following: First, regarding Mexico, in according with IFRS 5, Mexico is classified as discontinued operations. Therefore, its contribution is excluded from the EBITDA in both reported and adjusted results. At the net profit level, Mexico is presented under discontinued operations in the reported accounts, while in the adjusted figures, it is reflected on the equity line. As a consequence, in the second quarter, we have excluded the positive capital gain of EUR 950 million from the sale of the remaining business to Cox, which is the main driver of the difference with the reported and adjusted net profit. Second, as usual, U.K. capital allowances are adjusted at net profit level in '25 and '26.

Finally, U.S. pass cost recognition in '25 is excluded from the adjusted net profit of that year, EUR 530 million gross, EUR 389 million net in line with the definition applied in our 25 guidance. You can find all these effects explained in more detail in the Annex on Slide 32, 33 and 34.

Adjusted revenues increased 4.2% and after adjusting the recovery of U.S. pass cost in the first half of '25. Procurements rose by 4.8%. This resulted in a 4% increase in adjusted gross margin, improving the 1% decrease reported in March. Excluding the negative FX impact, EUR 220 million, adjusted gross margin would have grown 6%.

First half net operating expenses are 1% lower year-on-year and 1% higher, excluding the FX impact of EUR 71 million. ENW is included for the whole first semester versus last year that was accounted from March onwards. Net personnel expenses increased 7.7% in as the second quarter of '25 included some positive nonrecurring impacts. External services grew 2.6% and other operating income improved by 40%.

Analyzing the network business, its adjusted EBITDA grew 13% to EUR 4,213 million driven by a strong performance in all geographies due to higher asset base, especially in the U.S., the U.K. and Brazil. Excluding also EUR 53 million FX impact, adjusted EBITDA would have grown 14%. These investments in networks are making electricity available for household and industries, which is critical for the future of the economy and the energy independence.

In the U.S., IFRS adjusted EBITDA increased 19% to $1.2 billion. Excluding the $550 million [indiscernible] recognition booked in the first half of '25 included in the -- in the reported figures. Underlying performance benefited from higher rates in distribution and a stronger contribution from transmission, including NECEC following January COD. In the U.K., EBITDA increased 24% to GBP 924 million with increasing contribution from transmission driven by the new RIIO T3 framework in place from April '26 onwards, higher contribution from ENW versus last year's consolidation started in March '25, while in '26 is consolidated for the whole first half.

In Brazil, EBITDA was 7.1% to BRL 7.2 billion, improving from the 0.7% decline reported in March, driven by higher revenues in distribution due to better tariffs and demand, together with a higher contribution from transmission. In Spain, EBITDA increased 7% to EUR 154 million driven by the new regulatory framework and adjustments from past years. First half '26 Power & Customer business EBITDA reached EUR 3.8 billion and grew 1%, improving 3% fall at March, thanks to the Spain and the U.S.

During the semester, Iberdrola produced 61 terawatt hours of electricity with a 92% sourced locally and fully emission-free, advancing in the energy sales efficiency while strengthening the availability and the reliability of supply. This demonstrates the importance of combining local generation and robust networks to provide a secure, resilient and competitive energy system needed by the new economy.

In Iberia, EBITDA was EUR 1.9 billion and grew 1.5%, improving the 3.2% fall in March. With higher electricity sales and margins in Q2 more than compensating the lower prices, higher ancillary costs and the negative contribution of the regulated gas rate. As of June 30, Iberdrola had 8.3 terawatt hours hydro reserves. Pumping represented 35% of hydro production and should continue to help the results in the second half of the year. In the U.K., EBITDA increased 11.9% in to GBP 774 million, thanks to higher wind resources both on onshore and offshore more than compensating lower prices. The supply division had a positive contribution despite the smart meter sales.

In the U.S., EBITDA increased 3.5%, reversing the decline reported in March to $2 -- to $525 million with higher contribution from wind and solar assets with stronger prices and output more than offsetting the negative timing effect versus '25.

In the rest of the world, EBITDA decreased 18% to EUR 337 million, affected by the sale of Hungary and France, lower power prices and higher ancillary services costs in Portugal. In Brazil, EBITDA increased to BRL 661 million with higher contribution from the client business, partially offset by lower renewable contribution. Depreciation and amortization and provisions grew 2%, reaching to EUR 2,824 million. The evolution was mainly driven by the larger asset base and provisions. Adjusted EBIT grew 10%, improving from a 1% decline at March, reaching EUR 526 million.

Excluding the EUR 52 million [indiscernible] impact growth would have been -- would have reached 12%. Net financial results increased by EUR 508 million to minus EUR 1.1 billion, mainly driven by the negative derivative impacts, especially in the second quarter, reflecting the Q2 '25 East of Anglia THREE positive one-off of EUR 282 million, and FX hedges linked to exchange rates as they were positive in 25% and negative this year.

All of this is despite a EUR 28 billion lower average debt. Debt costs increased 44 basis points, mainly reflecting higher interest rates and higher percentage of debt in Brazilian reals, which is linked to inflation. Compensated at the EBITDA level as revenues in new and inflation adjusted. Excluding the real, debt cost fell 3 basis points to 3.5%. And Net debt increased EUR 3.8 billion versus full year '25 to EUR 54 billion, mainly reflecting higher replacement and currency appreciation. The evolution also reflects a strong effort in CapEx, including the EUR 1.1 billion acquisition of Neoenergia minority shareholders in Q2, partly observed by FFO generation and asset rotation proceeds.

Iberdrola maintains a strong and resilient credit metrics, fully supportive of our BBB+ Baa1 rating. This financial strength allows the group to continue investing while preserving balance sheet flexibility. Our adjusted net debt to EBITDA remained at 3.5x. The adjusted FFO versus adjusted net debt reached 22.4%, and our adjusted leverage ratio was 45.3%, improving at 46.8% in the first half of '25. First half '26 adjusted net profit grew by 8% to EUR 3,565 million compared to the EUR 3,308 billion in adjusted net profit in the first half of 25%. Excluding the EUR 1,290 million FX impact, adjusted net profit would have grown by 14%, while reported net profit grew 22%. The difference versus adjusted net profit is mainly explained by the EUR 1 billion capital gain from the Mexico transaction recognized in Q2, partially offset by capital allowances in the U.K. Neoenergia minority shareholder purchases had added EUR 164 million to the net profit.

And now the Chairman will conclude the presentation. Thank you.

Thank you, Pepe. To conclude, the strong performance for the first half and a very good prospect for the next 6 months to reinforce our positive outlook for the year. As of June, all our businesses has a positive evolution, especially in the second quarter, with net gross EBITDA growing 13%, thanks to a higher regulated asset base and tariff increase and power and customer EBITDA is already up year-on-year since to 3.5 gigawatts added in the last 12 months, higher production and the contribution from pump storage. I state this strong trend will continue over the second half of the year, driven by a further increase in our regulated base in networks made in transmission. The positive impact of new regulatory network like RIIO-T3 in the U.K. and the full contribution of the Neoenergia our net profit level after the acquisition of minorities.

In Power & customers, we expect to have 2.1 new gigawatts before year-end and had reserves are still close to record levels. On top of that, 100% of our expected energy is already sold, and we continue to main our margin through pump storage. We will also benefit from an additional operating efficiencies and ongoing improvement in business processes due to artificial intelligence as well as for a more favorable evolution of foreign exchange. All in all, this allows us to comfortably reaffirm our guidance of growth above 8% in adjusted net profit in 2026. And if the positive trends of the second quarter continued in the coming months, we could give you some good news after summer.

And as we have shown today, we are already working to continue exceeding our logo for coming years. Phase 2 the acceleration of organic investment in networks in the U.S., the U.K. or Brazil and empower, mainly in the U.S., additional efficiency gains and process improvement like linked to artificial intelligence. As well as the integration of Caruna yesterday, we reinforced our network profile in AA+ rate country in the Eurozone with attractive regulation, strong growth prospects.

The transaction follows the same rationale that we have already applied in the last 25 years as longterm industrial investors and we have always demonstrated our capacity to materialize our value creation expectations.

Now we will be more than happy to answer your questions you may have. Thank you.

The following financial professionals have raised the following questions. First, Dominic Nash, Barclays; Philippe Ourpatian, ODDO; Rob Pulleyn, Morgan Stanley; Skye Landon, Rothschild; Peter Bisztyga, Bank of America; Jenny Ping, Citigroup; Alberto Gandolfi, Goldman Sachs; Fernando Garcia, Royal Bank of Canada; Jorge Alonso, Berstein Societe General; Ahmed Farman and Arturo Murua from Jefferies; James Brand from Deutsche Bank; and finally, Javier Garrido, JPMorgan.

The first one is, could you walk us through the main drivers behind net profit growth in the first half of 2026? And how much of that performance is sustainable for the rest of the year.

So I've seen this -- the first one is business drivers. Networks has a higher RAB in all countries. We have a strong performance in the U.K., in the U.S. and Brazil. In the U.K., we have higher contribution from electric in the U.S. consolidated in March 2025, increasing contribution from transmission RIIO-T3 in April and the U.S. higher rates contribution of NECEC interconnection between Canada Massachusetts for January. And in Brazil, increasing revenues in distribution to the better tariff and a higher contribution from transmission after finalizing all lots in the rent revision of rates as well.

Power higher production in the U.K., U.S. and European countries. And we expect this trend to continue the rest of the year. In Iberia, we have a strong hydro production, especially in Pumped Storage. Already, as Pepe mentioned, represent close to 35% of our total production with an improvement in margins. Positive impact of the 100% acquisition of Neoenergia. So that makes adjusted net profit 8% or 14% excluding FX impact. And as was mentioned, is if the trend continues, perhaps after the summer, we can give even better news for you.

Second question, what gives you confidence in a [indiscernible] in 2026 profit guidance? And what are the key operational drivers for the second half?

I think it's seen I mentioned, I think we expect positive dynamics in second quarter that will continue the rest of the year. In other words, the regulators base continue increasing new frameworks with better rates and relative for net bill tariff on countries, additional contribution for Energia full year. In Power, we have installed 1.6 gigawatt hour a during the first half of the year. We put an additional 1.1 gigawatt in operation before the year-end, 100% of the energy sold hydro resales at the record levels, as Pepe mentioned, 8.3 gigawatt hours improving margins to the part the volatility of the price held to us. Improving FX, we expect improving FX dynamics at the negative impact recorded in the first half, and additional operating efficiencies was mentioned.

So that's why I continue repeating that we are comfortable reaffirming our guidance for more than 1% growth in net profit. And I think in this positive terms of the second quarter continues in the coming months we could give you some good news after the summer.

Next question, despite that we are receiving some questions about the announced acquisition of Caruna that were mostly answered yesterday during the call, However, could you please comment generally on the strategic rationale, why enter in Finland right now implied multiples? And what gives you confidence that the transaction will create value for Iberdrola.

So this transaction follows the same rationale on the acquisition of other network companies like Scottish Power Energy, U.S. or electron we are a long-term industrial investor. We have not already speculative investors. We see opportunities, then probably another one has not seen as we have demonstrated and these opportunities we are seeing, we are able to materialize. Just already happened in cases like in U.K., you see the good result of U.S. or Brazil. Additionally, we are financing this transaction with the funds and the capital gains obtained from the sale of our thermal generation in Mexico.

We are moving -- we are changing money from one country to another one a country in power generation for set power generation into the clean network operation regulated. The transaction as well will be accretive since the day 1, which I think is not normal in this type of transaction. And the company expects net profit to increase by 7% per annum given the predictable regulatory work and the investment plan up to 2031.

Overall, I think that is a relatively small transaction compared with our organic investment I think you know we are investing in the range of EUR 14 billion, EUR 15 billion per annum. So I think that represents less than EUR 5 billion, so which I think is relatively small compared with the rest.

We have another additional question regarding the treatment of the shareholders' loan in the deal of Caruna that is [indiscernible].

Pepe, you reply that one?

Yes. Well, I think it's quite simple. So Caruna has net income. And after the net income that we are expecting to be around EUR 150 million in '27. After that net income, it pays a shareholder loan. And now with the acquisition that we do, especially of the 80% that shareholder loan will disappear. So it will be a net income. We will have the 80% of the net income. So I mean, after the shareholder loan, what you are seeing is a net income, but we are looking to the net income, which is corresponds to the equity that we are putting there, and that is what justifies the 16x that we are paying.

Next, can you provide an update on your artificial intelligence initiatives and quantify the expected impact over the time?

I finish that is...

Artificial intelligence...

Yes. Okay. I think we are progressing in the implementation of the initiatives we already presented you as well as on others. There are around 300 projects in this moment in production -- the final development stage. We have another 150 project progressing we are training now a ton of people, probably more than 4,000. And we expect that the value of all this initiative will be measured in the hundreds of millions. And I will -- you will see that one in the next month. So I think that is going on.

Next, where do you see the main [indiscernible] opportunities versus your current business plan?

Yes, let me -- so you asked for the [indiscernible]. Yes. We are already -- we are already better than our plan in terms of investment and results. Just to give you a few examples, in the U.K., RIIO-T3, final determination -- it was better than planned and expected. With Hydrotec is GBP 2.1 billion with a better return and faster cash flow recovery. In the U.S., the higher demand is driving additional investment in infrastructure, for instance, we are already in this moment in transmission with the project of power in New York. With a project which includes EUR 4.2 billion CapEx. In generation, in the United States, repowerings, life extension, new asset includes -- our plan includes around 2,000 new megawatts in 2025 to '28, but we have already installed 100 -- 1,400. We have another 100 in construction or we will be installing 2028. That means that is 30% more above the award plan in the U.S. In top of that, we have another close to 1,800 megawatts project, which be installed by 2030, in which we are signing PPAs with higher prices and longer duration.

And finally in Brazil, the fact that the renewal of concessions, we have already committed to make investment of BRL 50 billion, which is around EUR 9 billion, which is mainly doubling the investment we make in the last 5 years with very attractive returns. In any case, I think we are working in our review our long-term plan, and we will share you the information in the next Capital Market Day that will take place in the year as well.

Next is regarding the new U.K. government and its implication for ever dollars U.K. operation and investment plans.

Well, Andy Burnham is not new for us. As you know, we know him from his time as major of Great Manchester. We were -- have the distribution service where we have the distribution service area, and we have already worked very well with his team. So I think the key priorities announced by Andy Burnham are absolutely aligned with our plans. The fact yesterday, the government already announced the elimination of VAT and electricity nothing which I think that is what we -- the European Union is saying is that is we've been claiming for years. So we would like to electrify. We have already make the things in a manner more attractive.

So we need already availability, reliability, but affordability, the key thing for affordability is precisely cash reduction of electricity. So that is what they are doing. So we are aligned very much with our plan. And I think we know well his team. And I think we have already worked very well from our position as a distributor in the Manchester area where he was already the major in the last few years.

Next question is regarding Brazil and our announcement about new investment plans and what returns do we expect for those new investments, assuming the extension of the concessions?

So as you know, we are the largest electricity distribution in Brazil and the leading investor in the [indiscernible] sector. I mentioned before, I was a month ago, in the western part of Bahia with the Ministry of Energy, by President of the government with the Minister of Agriculture and others for announcing precisely, this extension of the concessions of different places. And I think the minister was already very positive and the trends and the ambition of the country to electrify areas with now they are not enough electrify. So -- and that other areas certain is this booming area of Bahia, same than others, but I think this was in the western part of a year. And I think the trend of our -- of this CapEx will continue, the electric will very attractive with ROEs on the high 2 digits. And very positive regulatory framework, very stable, very predictable with rules that we know very well from the more than 20 years we have present in the country.

Next, the latest news about the Spanish blackout.

So we have not changed our positions in the day 1. So as I mentioned at any time, an electric engineer, and I can tell you the blackout was the result of inadequate planning, management and operation of the electricity system by Red Electrica was not adequate one. With a lack of synchronous unit program despite the fact that they were available. I think I can understand the blackout, if they are not power available. If they are 4x more power available than that what is needed -- it's difficult to be understood. The only reason is the system operator has not either planned properly or has not managed pop during the day.

Our position is -- I think that is the position that has been taken by all report investigation audios, et cetera, et cetera. And the fact is I think that is very clear after the blackout. Red Electrica has decided to modify his system operation to program more influence units.

So I think that's very clear. So what I was saying from the day 1 now is being applied. -- there not a team as well with the CNMC, the regulator has published a report last May, pointed that exists a conflict between the role of transmission network operator which is a listed company, and that may estimate in prescient of prioritized investment with a higher expected return and the role of the system operator, which must ensure the minimization of the valuable resources focusing to greater supply. I think that is not my work, that is the CNMC, the regulator is already talking about this conflict between transmission owner and system operator, which are 2 different things.

The role as the fact is separating in order your decision where we have already presence like United States, U.K. or Brazil. And I'm sure then probably that had not been together, probably what we are talking about, who will be in a different situation.

Next is regarding more color on our renewable portfolio in the U.S., especially regarding repowering, life extension and possible new PPAs.

So as I mentioned, we are investing in U.S. more than initially planned, driven by increasing demand and the good condition of the PPA market. As I mentioned, we have more than -- as per you can already reply the details on that one. More than 100 megawatts in construction. But you can...

Yes, I think we have more than 800 megawatts right now under construction, and we expect more than 2,200 megawatts that could be operating by the end of 2030. This means more than doubled our plans in the U.S. mandated projects are related to life extension or repowering, which has practical economics and reduce complexity during construction, permitting, et cetera.

I think we're building a strong portfolio beyond 2030 that will be explained later. And some competitors is talking about increased capacity in the U.S. in our case, I can assure, and I think that's the work we're doing that all our projects are real. With supply chain secured, including turbines or solar panels. So we do not need to buy projects from third parties.

Next is regarding the new U.S. cases in -- the rate cases in the U.S. if we can provide some update on the timing of these processes.

So I would like to say that we are in usual negotiation processes. They will probably continue until the year end or beginning of this year. So I mentioned already, for instance, New York, we already agreed with the regulator, the level of investment and the new tariffs will be retracted to May, as we had already done in the past. And we will continue to negotiate the rest of the term. So I think that is the normal way how we work. I think we work, we negotiate and whatever things we agree it really attractive from the date with another rate case part.

Next is our view on batteries included in our strategy? How do you compare those opportunities with your existing pumping hydro portfolio?

The pumping. So we started 25 years ago investing massively in the storage. As you now remember 2001 when we presented our first business plan. I was saying that we plan to make at that time a few thousand megawatts of -- 4,000, I don't remember, but of renewable, I think mostly in wind. And we said that the renewables are intermittent. So it's needed storing the excess of electricity when they are not enough demand and for providing this electricity when that is needed.

So that makes ourselves to transform most of our hydroelectric power plants in reversible. So the fact today, we have 4,400 megawatts of hydro pumping storage with the capacity between 20 and 100 hours each of those, which makes a total capacity storage on the range of 120,000 megawatt hour, so which is a huge capacity. Also, I think we are investing batteries. As you know, I think I'm coming from the sector of a spent 70 years of my professional life, designing, manufacturing and selling batches worldwide. So we're not lithium batteries. We have nickel come in, we have lead acid batteries. But I think I'm familiar with batteries because it was part of -- is part of my background. So we are investing in batteries especially in market, but we have no possibilities of making hydro pumping. So in countries also, we have attractive regulatory frameworks.

For instance, in Australia, we have already 220 megawatts, which is 640-megawatt hours installed, another 270 megawatts, which is 150-megawatt hours under construction, we have some mature project as well for another one with 100 megawatts of capacity.

In U.K., we have as well in installed battery with 250 megawatts, which has a capacity of 200-megawatt hours and we have quite long development pipeline -- developing pipeline and U.S., we installed the first battery storage project at this moment in Oregon. -- with 80-megawatt hours, and we expect to start a test as well soon. In Spain, we are the leader. So we have and 120 megawatt installed with 420 batteries and 245 megawatts under construction. So I think we are in countries. But I think we compare all these numbers, which is a few hundreds of megawatt hour come with the capacity we have for ready hydropumping is peanuts. So I think 120,000 megawatt hours is equivalent of 60,000 megawatts of normal batteries of 2 hours capacity of 30,000 out of hour capacity is a huge capacity, and that is what we are already the reason why now in this moment, almost 35%, 40%, Pepe mentioned, of our hydro production is coming from these pumping stories.

But that is the consequence of a decision we took 25 years ago when we started already this -- the new times of the company.

Next is regarding to the net debt expectation for the end of the year.

The net debt is probably going to be around EUR 56 billion. Basically, it's slightly higher than we had in the plan. but driven by the appreciation of the currencies from the beginning of '25 that although the currency is the dollar, especially the dollar and the real are lower than -- the average are lower than last year, they are higher than the beginning of this year. So that will -- is having already an impact in the debt, as you can see in the presentation. But on the other side, it would be good news for the FFO generation for 2027. So this is more or less around EUR 56 billion where we are expecting to close the year.

Next is the performance of the retail business in Spain, particularly in terms of customer retention, competition and regulated cost impacts during this year.

Pepe?

I think we remain the market leader in terms of energy supply, but also in terms of the customer portfolio, much lower rate than any of our competitors, especially new entrants, which basically means a strong customer retention. I think we have a evolution of our portfolio, the customer portfolio, including [ niba ], our second brand. I think we continue to add products. Let's not forget what the Chairman mentioned in his presentation, which is that we've been impacted both in Spain and Portugal by the additional cost of the so-called reinforced system operations by Red Electrica in addition to other impacts due to regulated gas tariffs in Spain.

And the last one is how do you balance the need for great investments with affordability concerns in the U.S. and in Europe.

So I don't know if I mentioned before, we not is. The key is today in most countries for regulators and government are availability and reliability of electricity. So availability is to have spicing power and infrastructure. So I think you see in the United States, we are hit demand, people lock in our door for extending life of the existing asset of investing in new ones with long-term PPAs, even longer than before, so with higher prices. Availability, I think most of the equipment we today are installed I think they need 24/7 service. So that means we need agreed, more robust, more resilient and a better quality of service. I think that is the 2 drivers. That will require this massive investment mainly networks as you recognized by several governments, as seen recently by your permission, they're special direct related to networks.

So which I think is, the unit is absolutely new because traditionally make elective about clean energy of our renewable, et cetera. especially made for the need of networks in all countries for achieving this availability of energy reliability. To reduce electricity price for consumers, the easiest and fastest way is to reduce taxes and charges that they are incurred energy, electricity specially. That is go European Commission is recommending. And that is the first measure taken by the British government. So I think the taxes, which are in most countries, supported by electricity, especially in Europe, a huge probably close to 50% of the energy bill is related with taxes and charges, which is much higher than the fossil fuels in the countries where we are fully dependent on the imports.

So we are penalizing local production for subsidizing or penalizing less that 1 with imports. So it's absolutely needed to revise the taxation of electricity, if we would like to electrify the economy, we would like to have the availability of our which is needed in most countries, the reliability of the grid for making it more robust, more resilient and with better quality of sales to provide 24/7 service to the citizen in the best condition.

That is what the European Commission is dictating that is what the government is doing, the first decision they took, reduced taxes for electricity for electrifying the country.

And with this last question, I now hand again the floor over to Mr. Galan to close the event.

So thank you very much for talking part of this conference call. As always, our Investor Relations team will be available for any rational questions. If we have not already the opportunity of meeting I said before, I wish you extremely good summer, good holidays.

And I hope that after summer, we can give even better news for you. Thank you very much, and relax a bit. Thank you.

Good afternoon, everyone, and thank you for joining us today. I'm Isabel Sanchez, Deputy Head of Investor Relations. The purpose of this call is to provide further details on Iberdrola's announced acquisition of the electricity distribution company in Finland, Caruna, and to walk you through the strategic rationale, key financial considerations and expected contribution of the transaction.

We are joined today by Mr. David Mesonero, Deputy CFO and Global Head of Corporate Development, who will take you through the presentation shared with you in advance. If you have not yet accessed it, the presentation is also available on our -- on the link you have received through the [indiscernible].

We appreciate that this is a busy period in the reporting season, so we have designed today's session to be focused and [indiscernible] with a total duration of approximately 30 to 40 minutes. After the presentation, we will open the line for a live Q&A session. [Operator Instructions] As always, if you have further questions after the call, please feel free to contact the Investor Relations team at [email protected].

And now without further ado, I will hand over to David Mesonero. David, over to you.

Thank you, Isabel. Good afternoon, everyone, and thank you for joining us today. It is a pleasure to be with you today to present what we believe is another important milestone in Iberdrola's long-term strategy.

Before we begin, I would also like to thank many of you for the message and congratulations we have received following its signing, victory and funding. Although we are a multinational company, it was certainly a very special moment for our country considering our culture.

Back to the presentation at Iberdrola, we don't wait for the future to happen. We anticipate and we build it. Our history has shown that we have demonstrated a consistent ability to anticipate the cultural changes, remain ahead of global trends and all the challenges facing the energy sector into tangible [indiscernible] sustainability goals.

Today we are taking another [indiscernible] step by entering a new geography and establishing a leading position in electric distribution in Finland. This decision is not opportunity. It is an actual result of our [indiscernible] capital allocation framework. Over many years, Iberdrola has followed a very clear investment approach. We invest in [indiscernible] network in countries with strong credit quality, predictable [indiscernible] regulation [indiscernible] growth and sustainable value creation potential for our stakeholders.

Following [indiscernible] of our thermal generation business in Mexico, we are now recycling [indiscernible] into one of Europe's highest quality regulated [indiscernible] platform. We are [indiscernible] deploying capital from [indiscernible] noncore business into a growing euro-denominated and [indiscernible] asset in a [indiscernible] A+-rated country, 3 notches above Spain, 1 notch above the U.K. and on par with the United States.

This is precisely the type of capital allocation Iberdrola has consistently delivered, improving the quality through stability and resilience of our earnings while preserving our financial strength.

With that, [indiscernible] lead you through the presentation. Please turn to Slide 2. The main message on today's presentation is [indiscernible] Caruna is an excellent strategic fit for Iberdrola that will further strengthen our position as one of the world's leading [indiscernible] operators and increasing our exposure to stable, predictable and long-duration [indiscernible].

Network already represents the largest contributor to Iberdrola's value, and we continue to [indiscernible] that they offer one of the most attractive combinations of earnings visibility, investment opportunity and [indiscernible] growth with [indiscernible].

Caruna is the largest and [indiscernible] companies in Finland, with more than 20% of [indiscernible]. The company also benefits from [indiscernible] providing additional long-term visibility and [indiscernible] a fully regulated business and [indiscernible] regulatory framework with visibility until 2031. Based on the current regulation [indiscernible] and our business plan, Caruna is expected to generate [indiscernible] result on equity of approximately 8% with additional incentives. This is an attractive [indiscernible] regulated business in a AA+ rated country, supported by stable cash flow and a significant long-term investment program.

Finland is also an important of the investment case. This is one of Europe's more stable, innovative and highly digitized economies. With a strong execution on our framework, clean and competitive [indiscernible] generation and a significant potential for further electrification.

Electricity demand is expected to grow materially. [indiscernible] integration, data centers [indiscernible] value chain and other energy-intensive activities. Electricity demand from [indiscernible] Finland is expected to grow by around 4x by 2030, increasing by 1.6 terawatt-hours in 2024 to approximately 5 to 6 terawatt-hours by 2030. This creates a clear requirement for continued investment in [indiscernible] network. Caruna is well positioned at the center of Finland's digital economy investment and energy development.

We expect Caruna's net income to grow [indiscernible] by approximately 7% CAGR [indiscernible] by increasing capital [indiscernible] program between 200 and 300 [indiscernible] annually. From a financial perspective, this transaction is also very attractive. We are acquiring an 80% stake in Caruna for an equity consideration of approximately EUR 2 billion. Around EUR 1 billion or approximately half of the consideration will be disbursed by 30 months following the close. [indiscernible] payment materially is reviewed [indiscernible] improve the [indiscernible] economics of the transaction and [indiscernible].

The transaction value is 100% of Caruna at [indiscernible] value of approximately EUR 5 billion, including EUR 2.47 billion of net debt as of December '25. The implied [indiscernible] multiple is approximately [ 16x ] expected 2027 [indiscernible]. We underscore acquiring a high-quality [indiscernible] platform with [indiscernible] having growth and attractive P/E multiple below Iberdrola [indiscernible]. The transaction is expected to be EPS-accretive on the [ first ] year, around 1%, without considering possible synergy [indiscernible].

The value proposition is fully supported by the quality [indiscernible] and growth of the standalone business. Any additional benefit from Iberdrola experience, scale, operating or financial capabilities would therefore represent potential upside rather than a [indiscernible] of value creation.

Coming now to Slide 3. Caruna is the largest distribution company in Finland, serving a population of around 1.5 million, 25% of the country [indiscernible] in a market that remains highly fragmented, with 77 distribution network operators. That position of strength [indiscernible] in network through the addition of 100% regulated business generating a single cash flow in euros in a AA+ rated country. This also provides Iberdrola with a new platform in a market undergoing a rapid electrification process.

Finland benefits from an abundant clean energy electricity, a [indiscernible] power prices, making an attractive location for anything [indiscernible] investment. [indiscernible] operator expects electricity demand to increase by between 22% and 45% by 2030. [indiscernible] demand growth will require substantial [indiscernible] and substantial electricity [indiscernible] with distribution companies playing a central role in connecting new demand, integrating [indiscernible] generation and maintaining [indiscernible] availability of supply.

Caruna is [indiscernible] well positioned to capture these opportunities [indiscernible] footprint and technical capability.

The regulatory framework is stable, predictable and [indiscernible] until 2031 [indiscernible] recovery of [indiscernible] investment and provides the necessary framework to respond to growing electricity demand [indiscernible] where investment capability has been constrained by regulatory [indiscernible] framework enables [indiscernible] investment to be incorporated into the regulated [indiscernible].

This alignment between regulation, demand growth and investment [indiscernible] for the transaction. In simple terms, Finland provides us a combination of stability, a strong credit quality and electricity demand growth.

Turning now to Slide 4. Caruna is much more than Finland's largest electricity [indiscernible]. This is a fantastic company and one of Europe's highest quality regulated network platform. The company serves approximately 740,000 [indiscernible] around 1.5 million population, and operates close to 89,000 kilometers of electricity line.

Around 67% of this network has already been underground. Underground means increased network resilience with these weather related interruptions, improved [indiscernible] of supply and lower operating and maintenance requirements over the life of the asset. This is particularly relevant in Finland. Caruna has therefore already completed a significant investment program to reinforce the resilience and quality of its network.

At the same time, the [indiscernible] of growth is now emerging. These investments are supported by distribution licenses granted [indiscernible]. By 2027, Caruna is expected to have a regulatory [indiscernible] above EUR 2.5 billion, EBITDA of around EUR 369 million, a net income of approximately EUR 148 million. 2027 will be the first year in which Caruna is fully consolidated in our financial statements.

We expect net income to grow in the next decade by around 7% CAGR, supported by the increase in [indiscernible] expenditure program and by the continued growth of Finland's [indiscernible] and the United States, Iberdrola has consistently demonstrated its ability to invest in [indiscernible] and improve operational performance and customer service. We think Finland represents another excellent opportunity to [indiscernible] those capital.

It is also important to emphasize that Caruna is already a highly efficient organization [indiscernible] operating model and only 247 employees. Our approach will therefore be to preserve the strength of the business and support its next phase of investment and growth.

Now turning to Slide 5. Following the completion, Iberdrola will own 80% of Caruna. The remaining [indiscernible] will continue to be held by 2 highly respected long-term [indiscernible] institutional investors: AMF and [ Ehlo ]. AMF if one of Sweden's largest [indiscernible] business, while [ Ehlo ] is one of Finland's leading investment [indiscernible] company. We are delighted to partner with those shareholders whose investment [indiscernible] is closely aligned with ours [indiscernible] and focus on [indiscernible] investment also demonstrates a confidence in Caruna's long-term prospects [indiscernible] is therefore not only our acquiring [indiscernible]. It is also about establishing a long-term presence in Finland and [indiscernible] to a leading [indiscernible] investor.

Our integration philosophy will be equally important. Caruna is already a highly efficient [indiscernible] business with a [indiscernible] identity and a capable management team. Our objective is to preserve those strengths while [indiscernible] Iberdrola's expertise in such areas as digital asset management, predictive maintenance, engineering, procurement, [indiscernible] along the network line.

Finally, turning to Slide 6. [indiscernible] the relevant regulatory application by [indiscernible]. The approval process is expected to be completed by December, with closing anticipated within the first quarter of 2027, subject to the receipt of the required regulatory clearance, one in Finland and in the European Union.

We have already begun [indiscernible]. Given Iberdrola's [indiscernible] experience in [indiscernible] across multiple jurisdictions, we are confident that the transition will be smooth. Our priorities will be clear: continuity and quality of service. [indiscernible] of the local management [indiscernible] engagement with employees, regulators, customers and all other stakeholders, and preservation of Caruna's [indiscernible] identity.

This will remain a locally managed [indiscernible] business supported by Iberdrola's global network capabilities, investment experience and financial strength.

Let me now conclude with 3 key messages. First, Caruna is [indiscernible] asset Iberdrola looks for. If combined, [indiscernible] AA+-rated [indiscernible] and highly visible long-term investment requirements. This is expected to deliver during the next decade a regulated return on equity of around 8%, a net income growth of around 7% CAGR, supported by an increasing capital expenditure program of between EUR 200 million and EUR 300 million annually. These are attractive returns and work process for a fully regulated business with a framework of very stable cash flow.

Second, this acquisition demonstrates once again Iberdrola's disciplined approach to capital allocation. We are expecting the profit from divestiture of our thermal generation [indiscernible] in Mexico into a high-end quality regulated [indiscernible]. We are moving from a mature and noncore business into [indiscernible] network, which remains at the center of our strategy and of the global electrification program. The transaction is expected to be EPS accretive on the third year.

And third, this transaction [indiscernible] the overall quality of Iberdrola. It increases the contribution of regulated network to our portfolio, which now represents more than 50% of our EBITDA. It improves earnings and cash flow [indiscernible]. It strengthens the resilience and geographical diversification of our business model. And it provides Iberdrola with a leading platform in a country where electricity demand and [indiscernible] investments are expected to grow significantly over the coming years.

Caruna is not simply a high-quality asset. It is a long-term growth platform in one of the [indiscernible] strongest and most stable economies. We believe this transaction represents another important step in our strategy. At Iberdrola, we don't wait for decisions to happen. We invest in, we [indiscernible] and we create value from it. Thank you very much for your attention.

Thank you very much for the detailed overview, David. We will now move to the Q&A section. Operator, please, may we take the first question?

[Operator Instructions] The first question comes from Jenny Ping from Citigroup.

I've got 3, please. Firstly, can you just tell us actually, given you've got the visibility until 2031, what is the RAB growth in country -- or what is the RAB growth or what is the RAB in the country, firstly, one? That would be my first question. Secondly, looking at the net debt to RAB of this asset, we're talking close to 100% leverage. Is there any plan to inject equity into the business to reduce leverage at some stage? And then the third question I had was really around the EUR 1 billion deferred payment. Is that contingent on performance or on something else in 30 months' time? Or is it payable regardless?

First, regarding the visibility of the RAB for 2031 and why we are confident. So it is based on Finnish regulator. The Finnish regulator has approved the framework for the next 3 years until 2031. So there is no any question about the regulation. So we have full visibility until that year.

What we expect is by 2031, the RAB will be around EUR 3 billion, okay? So it is including the CapEx that we are going to deploy in the next few years minus the amortization of the [indiscernible] of the CapEx that we need to do.

Regarding the second question, if it is necessary to finance the growth of this company, if we need to put more equities. In our assumptions, we are not assuming any other equity injection. Please do consider that this is a very stable regulatory framework that obviously we -- the company has a very efficient financing strategy. But on top of that, as we have done, for example, we've seen value Iberdrola can provide additional [indiscernible] if it is necessary.

And third, regarding the deferred payment of EUR 1 billion, there is not any contingency. So it is not -- there is not any kind of earn-out or things like that. It just a deferred payment of 50% of the equity value for the 80% of the acquisition. Obviously, between the acquisition process, we find any legal topic that we can -- that we are not happy with that. This will be a potential discussion with the sellers. But we don't anticipate any major issue as we have done a very, very detailed due diligence. And of course, there is [indiscernible] that is somehow [indiscernible] the business.

Let's move on to the next question, please.

Our next question comes from Gonzalo Sanchez-Bordona from UBS.

Thank you very much for the presentation and the opportunity for the questions. Three, if I may as well. First one is related with sources of potential [indiscernible] you mentioned in the presentation. I was wondering whether in the RAB growth [indiscernible] you've just outlined, whether you are [indiscernible]? I think you mentioned incentives, you mentioned demand growth. Is that something that can materialize into additional RAB growth or some additional incentive growth during the current [indiscernible] through 2031, and apologies because I know nothing about the Finland regulation. So that's question number one.

Question number two is related with how you calculate the 17x P/E -- sorry, 16x P/E for 2027. If you could provide some details on that because I had different numbers. I don't know if I'm missing something there.

And then the other question is related to how the [indiscernible] work in terms of returns on top of the 8% [indiscernible]. Is it possible to achieve higher returns [indiscernible] period or if you are referring to this potential of [indiscernible]?

Gonzalo, if you don't mind, I will make question number one and question number three because I think they are correlated. So regarding if we are considering any upside, the answer is no. We are trying to be very, very conservative in our assumptions. So there is not any kind of upside that we are seeing today [indiscernible]. The performance of this company has been huge. We have seen years with an our outperformance of 180, 190, but we are not considering that outperformance. In here, we are considering a small outperformance because obviously it's the largest distribution company in Finland, and it's a very, very -- it's a very big market in terms of the number of the distribution companies [indiscernible] 77. So when you do the benchmark, obviously the largest usually get the best KPIs.

Additionally, we are not considering any efficiency from Iberdrola. As you can imagine, only procurement or all-in corporate efficiency we could achieve [indiscernible]. This is not a deal based on corporate efficiency, obviously, we will apply any operational efficiency that we can, especially procurement is a clear example.

And then let me explain how it's working. So regarding the CapEx efficiencies, 85% of the CapEx efficiency is captured by the company. Only 15% needs to be referred to the regulator. As regarding OpEx, 100% of the efficiency is captured by the company up to 20% over a [indiscernible], okay? So it's quite good regulation compared with others where we have presence that usually we need to [indiscernible].

Regarding [indiscernible] question, it's very simple. We are assuming, as I was saying, close to 100 [indiscernible] so we get 16x P/E. We have seen EUR 150 million already in 2027, and this is just to divide by the equity value that we are seeing for the 100%, okay? So it's vast. So we can, of course, provide you the details, but it is very, very, very [indiscernible].

Our next question comes from Rob Pulleyn from Morgan Stanley.

Three questions, if I may. Firstly, just to revisit an earlier question. So the implied gearing given the net debt and the RAB numbers provided, is like 97%. I mean is the other activities of that net debt? And is the [indiscernible] network sort of [indiscernible] nominal gearing of 40-60? That's question one.

Question two, I think you've given an interesting overview of how attractive Finland is and the electrification growth and everything else. May I ask why Iberdrola looking at this -- looking at it now? Is there an intent of our seller or other reasons that we should be aware of?

And thirdly, again, notwithstanding the respective merit this particular deal, historically, Iberdrola was very focused on it is 4 core geographies. And of course, we've seen deals within those geographies over the last few years. Should we understand that this foray into the Nordic, A, is a potential future core market? Is this opportunistic in the sense that this is [indiscernible] asset in your eyes? And/or does this imply that there is no [indiscernible] inorganic that you couldn't do in the existing core geographies? I'm sorry, long question that one, but [indiscernible].

Rob, so regarding the first question, I think that you probably [indiscernible] because of a low time that we gave you. But the implied gearing is 50%, okay? So the net debt is around EUR 2.40-something billion. So just make your math [indiscernible] we can give you all the details. But it's 50%, it's quite similar [indiscernible] where we are active.

Regarding the second question, it was a long one, but I tend to think that your question about why Finland and it is why we are now looking for a new dealership. I think that, obviously, at Ibedrola, we were very clear in our last Capital Markets Day, what we are looking for is great [indiscernible] country with network and especially a very attractive [indiscernible] clear framework. And I think Finland ticks all the boxes. It's a AA+ rating, so it's 3 notches over Spain, it's 1 notch over the U.K. and it's on par with the U.S.

Second is fully, fully regulated. So there is no any additional business than this business, that is including rural and urban cities in Finland. And I think it's a very, very attractive regulation for a company like ours with an 8% ROE, with a 10-year bond deal, much more competitive than all the geographies where we are active.

And finally, regarding additional [indiscernible], I think is the third question. Obviously, if we do these deals, usually what we want is to become delivered. With this acquisition, we are acquiring [indiscernible] we're covering 1.5 million population of inland. It's a very fragmented business with 77 DSOs. So I assume that in the next few years, we will see a potential consolidation in the country.

Regarding the other countries, what we have seen is that the Nordics are going to be one of the major benefits of the data center development. Electrification is at the core of their strategy [indiscernible] is at the core of their strategy. And of course, please bear in mind that they need resilience and energy independence. So I think the networks are going to be an important role or are going to play an important role within the strategy of these countries, especially Finland.

The next question comes from [ Dominic Matt ] from Barclays.

Yes. I've also got 2 questions [indiscernible] shorter. Looking at the Caruna Group financial statement on their website, I just wanted to get some sort of clarity on that. That one, 2025, EBITDA coming at [ EUR 344 million ] [indiscernible] in 2027, so 7% in 2 years [indiscernible] up EUR 25 million. But the question I've got here is that the net income in 2025 is EUR 75 million and you're guiding again EUR 148 million, i.e., doubling in the next 2 years. The question I've got is, is that net income number correct on [indiscernible] statement? And how do you get such [indiscernible] to net income or [indiscernible] back up in EBIT?

Second question, quick one. You've got [indiscernible] rights from the remaining 20%, when is the deadline for them to get tagged or dragged or [indiscernible]? And [indiscernible] a quick one, could you remind me again, because I'm not as familiar with Finnish regulation. The 8%, that's a -- is a nominal regulation rather than a real regulation? And is that a 40% equity?

Okay. So [indiscernible] for your 3 questions. Let me start with the first and the second. And [indiscernible] if you could [indiscernible] the third one because I didn't hear you well. So regarding net income, if you look at the financial statement, you are right, [indiscernible] in 2025, but you need to add a [indiscernible] loan that we are considering equity. So what we are doing is once we are acquiring a company, what we are doing is [indiscernible]. Instead of doing capital increases with this company or the shareholders have decided, is to do a kind of a stockholder loan that we are concentrating like equity, okay? So we need to [indiscernible] around EUR 65 million more to a 75, okay? So more or less, it will go the 2025 number in the range of EUR 135 million, EUR 140 million just for comparison purposes, okay? [indiscernible] we are guiding to EUR 148 million. Again, we will alter the [indiscernible] agreement. We will include equity [indiscernible] and that's why it will appear like the net income is coming before the -- sorry, after the stockholder agreement, it's going to be at the level of close to EUR 150 million.

The second is I assume [indiscernible] it was becoming parallel of the other 2 companies. So first, let me remark that our partnership strategy is very clear. We want to have local partners and strong partners [indiscernible] together with us in the key -- during the key assets or companies that we have. We have an example with [indiscernible] in Brazil, we have the example of [indiscernible] we have the example of [indiscernible] close to 2 gigawatts of our platform. So we are very happy having AMF and Ehlo. But it will -- for whatever reason, they are deciding to exit and they [indiscernible] on standalone, we are also happy acquiring 100%. It's a fantastic company and we will be super happy acquiring 100% of the [indiscernible] the 20% that is on their hand.

The right [indiscernible] at the time of the closing. So we are expecting that the closing is around the end of the year. So we will know what is the final decision by that date. In any case, I am [indiscernible] 2 funds, and they have expressed several times that they don't want to sell, and they want to remain. We also somehow reinforce our equity story in the market.

And I didn't your final question. I'll make you repeat it.

Yes. [indiscernible] the 8% return on regulated equity, can you just remind me, is that real or nominal? Is it inflation adjusted every year? And is that a 40% equity?

Yes. It's nominal. We have 46% equity.

The next question comes from Javier Garrido from JPM.

I just have one follow-up question on what you just said about the shareholder loan conversion. Is that when you are saying the price we are paying for 80% stake, does this include the shareholder loan or it's going to be transferred on top of the price that you say you are going for 80% stake?

Javier, so the 148% of -- we are guiding for 2027 is for 100% of the company. So 80%, we will need to adjust the net income [indiscernible]. And yes, if you included the loan [indiscernible] 100%.

Next question, please. I'm afraid this might be the last one.

Our last question comes from Jorge Alonso from Bernstein.

A couple of questions. One is a follow-up on Javier's question, is -- so the EUR 2 billion that you are paying effectively, that includes the shareholder loan conversion or that will come on top of the EUR 2 billion that you mentioned is paying for the 80%?

And the second one is as a consequence of this acquisition, I mean, can we think that Iberdrola would be accelerating disposals or [indiscernible] keep the balance sheet in [indiscernible]?

Jorge, regarding your first question is, yes, the question is very simple. Yes. So in the EUR 2 billion of equity, including EUR 1 billion of deferred payment will be including shareholder loans, so you don't need to make any adjustment for this calculation. In any case, this is -- there are 3 questions related to that. We will give you more retail. But there is nothing to be worried about. It's just we are considering [indiscernible] equity and we are just [indiscernible] everything on the shareholder loan as equity.

And second, regarding disposals, as you know, we presented in the last Capital Markets Day a very aggressive strategy of acquisitions and partnerships. We are very close to finish the initial guidance that we did [indiscernible] a few months ago. And obviously, still, we have around EUR 2 billion to be divested in the next few months also in this current [indiscernible]. So we don't expect additional disposal, but the normal one that we were planning, so we think that we have enough room for that. Obviously, as always, if there is an opportunity to dispose or to sell an asset at a very good price as we have done in the recent years, obviously, we are open. But in the case, what we are trying to defer our balance sheet and we are still committed [indiscernible] rating. Please consider that we do have the [indiscernible] with this 100% regulated in a AA rated country, what we are seeing is that the level of regulated business is now above 50% of our net income. So in that sense, somehow we are improving [indiscernible] headroom that we have for additional investment.

Okay. Well, that was our last question. Thank you very much, David, for sharing these details with us today. And thanks to all the audience for joining the call and for your interest. If you have any additional questions, please do not hesitate to contact the Investor Relations team. And with that, we will close the call.

Good morning, ladies and gentlemen. First, we would like to extend a warm welcome to all of you who have joined us today for our 2026 first quarter results presentation. As is customary, we will follow the traditional structure of our events. We are going to begin with an overview of the results and the key developments during the period. The presentation and the Q&A will be delivered by the top executive team joining us today. Mr. Ignacio Galan, Executive Chairman; Mr. Pedro Azagra, CEO; and finally, Mr. Pepe Sainz, CFO. After the presentation, we'll move onto the Q&A session.

I would like to remind you that we will only be taking questions submitted through our website. Please send your question exclusively via www.iberdola.com. Finally, we expect that today's event to last no more than 60 minutes. Should any question remain unanswered, the IR team will, as always, remain fully at your disposal. We hope that this presentation will be useful and informative for all of you.

Now without further ado, I would like to hand the floor over to Mr. Ignacio Galan. Thank you once again. Please, Mr. Galan.

Thank you, Ignacio. Good morning, everyone, and thank you very much for joining today's conference call. In the first quarter 2026, adjusted net profit increased by 11% and to EUR 1,865 million. Adjusted EBITDA reached EUR 4.1 billion, up to 2.4%, mainly driven by 9% increase in networks more than offsetting the lower contribution of Power & Customers due to nonrecurring impacts in Iberia in the first quarter 2026. And in this previous year in U.S., which were partially compensated by strong production in U.K. and Continental Europe. .

Investment reached EUR 2.7 billion in the quarter for a total of EUR 14.5 billion in the last 12 months, fully in line with our strategic priorities. More than half in our Q1 investment were located in U.K. and U.S. and 15% to net worth increasing our regulators reached to EUR 53 billion. We also invested more than EUR 1 billion in new renewable capacity. As you know, last week, we announced the closing of the Mexico transaction, which completes our asset rotation target for 2028, reinforcing our financial profile and securing additional funds to invest in regulated networks business in the U.K. and the U.S. And Brazil, where we have also acquired the shares of Neoenergia do not control. This transaction will follow other recent deals also related to networks, like the purchase of our grid minorities of the integration and electricity networks in the U.K. That will simplify our structure and a positive impact on the profit from year 1, increasing our pressure to a country with high growth prospects and strong regulatory outlook in Brazil.

Driven by additional cash flow generation up to 7% and the positive impact of the Mexico transaction, our pro forma net debt reached EUR 50.3 billion in forcing credit metrics in line with our BBB+ rating. In terms of efficiency, our recurring operating expenses rose just 1% up to March, excluding the incremental effect on electricity networks in the U.K. In the coming quarters, we expect to benefit from the use of capital gains from national rotation like with previous year.

On top of this, we are implementing a full review of our processes to integrate artificial intelligence solution across our activities and corporate areas with more than 300 initiatives already identified that will drive that will drive funding efficiency and new business opportunity in the next years. All in all, the results reflect the benefit of our business model based on regulated business in every countries and that provide stability and sustained growth in all these scenarios. Even in the current energy crisis, probably in the 6 of the 7 linked to fossil fuels since I started my career, we don't expect in Iberdrola any significant financial impact from this scenario. Given our minimal exposure commodities, our zero exposure to supply affected by the strength of our move with 93% also of our state purchase fully secured.

Our geographical footprint based in countries and our structural protection against potential macroeconomic shocks. As you know, most of our remuneration for regulation are linked to inflation. We have foreign exchange risks fully covered by our in this profit estimate, 75% of our debt is fixed rate, and our current liquidity stands at EUR 21.4 billion, enough to cover 23 months of financial needs. The resiliency against crisis will be reinforced in the coming years, think of our focus on regulated electricity networks, mainly in the U.S. and the U.K., and our generation technology is not linked to fossil fuel volatility. 100% of our production is already sold for '26, 80% for '27, 75% for '28.

As a result, by the end of the decade, 75% of our EBITDA will come from regulated networks and long-term contracted generation. But a part of increasing our own resiliency, our performance in the last quarter shows that Iberdrola business model is also improving energy security autonomy and competitiveness in each of the countries where we operate. Given these benefits, more and more governments are putting electrification at the center of their energy industrial policies. In the last week, the European Commission the Council had published different communication documents and statements with a clear message and the accelerated electrification with sources, including nuclear, is the most effective way to promote Europe strategic autonomy and competitiveness.

In other countries like the U.K. are following the same strategy. We can listen to many European policymakers reaffirming this approach last week at Wind Europe annual event Healthy Madrid.

Moving on to business highlights. Over the first quarter, network has continued to deliver predictable and sustainable growth. In the U.K., the RIIO-T3 final determination will increase our determination investment to EUR 14 billion up to 2031, the improving rates of return accelerating cash recovered. The U.S. Avangrid results reflect additional contribution of new interconnection line between Canada and Massachusetts was commissioned in the last days of 2025 as well as the impact of rate increases in Connecticut to New York. In Brazil, the renewal of distribution concession for additional 30 years as published in the Union Official Bulletin. And the 4 machines ceremony is expected in the next few days. This will provide us visibility up to 2060 with no upfront cost and with relevant regulatory improvement, less recognition investment on an annual basis.

Operating performance was also positive in Power & Customers in the context of increasing demand in all our countries, mainly U.S. and Brazil. In Iberia, hydro reserves continue at record levels, and the U.K. wind production is 40% higher than in the same period of 2025. Finally, offshore wind production has increased significantly in our international business due to the completion of Baltic Eagle in Germany and higher availability across the fleet in Germany and France.

As mentioned, adjusted EBITDA reached EUR 4.1 billion, driven by positive network operating performance in all geographies, higher rates, an 8% increase in regulated asset base to the strong investment in U.K., especially in transmission. In Power & Customers, the evolution of EBITDA reflects negative nonrecurring impact mainly regulatory and ancillary costs in Iberia, as a result of the reinforced operation applied by ReteletigalEspana to include more synchronous generation. As you know, system operator is responsible for keeping the lights on, and since the black out, he has changed the operation of the system, now called reinforce operation, but in reality is more a regular operation system.

In my opinion, as an electric engineer, as I mentioned to you several times, it was a lack of proper planning and the new execution on the day of the blackout. As we had in the system around -- as we had in the system around 4x the power needed when it happened that was not used. The comparison against the first quarter 2025 has also reflected by -- in the business by nonrecurring positive results registered last year in the U.S., they will normalize over the coming months. These effects were partially offset by higher production, particularly in offshore wind, we reached a 42% increase in output.

By geographies, the U.K. and the U.S. accounted for almost 50% of the EBITDA and 8 countries contribute 84% to operating results once we had the European countries and Australia.

Investment reached EUR 2,705 million in the first quarter for total EUR 14.5 billion in the last 12 months, more directed to networks. Focusing on the first quarter, more than EUR 900 million were allocated to the U.K., reflecting an increase in transmission investment that will accelerate a bit more on the RIIO-T3 framework. Investment in the U.S. reached EUR 550 million, mainly in distribution. However, the company last year is affected by the completion of different renewable projects in the interconnection line between Massachusetts and Canada. Investment in Continental Europe and Australia reached EUR 400 million, mainly related to the wind in Germany, a new offshore and battery storage in different states of Australia. Investment reached EUR 309 million in Brazil with an increase of 30% in distribution and more than EUR 500 million in Iberia.

Thanks to the EUR 1.5 billion invested in networks up to March, our regulatory debt base reached EUR 53 billion, up 8% year-on-year. 1/3 of the total investment were located to transmission driving a 29% increase in regulated asset base up to EUR 14 billion in this concept transmission. Distribution investment also exceed EUR 1 billion up to 16%, mainly driven by a strong increase in around 30% in the U.K. and Brazil. By geographies 46% of investments were made in U.K., 26% U.S., 20% in Brazil, slightly 10% in Spain.

In Power, we invested EUR 1,070 million mainly in wind. Almost half of this investment around EUR 100 million were located in onshore wind across Australia and the U.S., U.K. and Iberia followed by offshore wind with EUR 100 million solar PV investment reached EUR 162 million, spread across Iberia, new countries in Australia as well as the U.S. And we invested EUR 115 million in storage, mainly in Australia and EU. This has allowed us to increase our capacity by 3,300 megawatts over the last 12 months, including 2 gigawatts of wind, 1 gigawatts out of solar and more than 300 megawatts of storage.

Regarding financial strength, the 7% increase registered in FFO and the positive impact of asset rotation partnership, mainly due to Mexico transaction that had led to us to pro forma net debt of EUR 50.3 billion, even after an increase in organic investment and acquisition of Neoenergia minorities. As a result, our FFO and adjusted net debt ratio has reached almost 25%, comfortably with a range a bit of BBB+ rating. On top of that, liquidity stands at EUR 21.4 billion, enough to cover 23 months of financial needs.

Finally, in the last month, we have accelerated the implementation of artificial intelligence initiatives. With an internal team fully dedicated to end transformation of our processes taking advantage of our own talent and resources as well of our understanding of our asset portfolio. In just a few months, this team has launched more than 300 AI projects, 70% fully developed in house to increase revenues and maximize operational efficiency across our business and corporate area. Mainly based on generative AI, but also on advanced machine learning and robotics. We inform you about the financial impact of these initiatives as soon they begin to materialize. But for the moment, I can tell you that our initial findings show a considerable value potential.

I will now hand over to our CFO, which will present the group financial result in more detail. Pepe?

Thank you very much, Chairman. Good morning to everybody. As the Chairman has mentioned, this first quarter results confirm the strength of our business model. The first quarter EBITDA was 2.4% up to EUR 4 billion, while adjusted net profit grew 11% to EUR 1,865 million. Since last year, the dollar has depreciated 11.4% against the euro, the pound 4.2% and the real 1%. As a consequence, FX has reduced our profit and loss figures. If you exclude FX, growth would have reached 6% at the EBITDA level and 17% at the net profit level. E&W is fully consolidated all the quarter versus last year where it was only 1 month. .

For clarity and comparability, we have applied a limited number of well-defined adjustments aligned with IFRS and our guidance definitions, thereby keeping differences between reported and adjusted results to a minimum. Mexico contribution is excluded at the EBITDA level in both reported and adjusted results following the IFRS 5 recommendations. Mexico is classified as discontinued operations in both cases. In the reported accounts, Mexico is presented directly under the discontinued operations line. And in the adjusted accounts for visibility purposes, Mexico is recognized under the equity line. In addition, there is a negative adjustment accounted in this quarter related to the year '24 divestment of our thermal assets in Mexico, which is excluded from the adjusted '26 results.

Second, as usual, U.K. capital allowances are adjusted at net profit level in both years. And finally, U.S. past recognition is excluded from the adjusted net profit in '25 in line with the definition applied in our '25 guidance. You can find all this explained in more detail in the Annex, specifically in Slides -- sorry, 36 and 37.

Regarding our gross margin, a 0.3% decrease in adjusted revenues, combined with a 0.5% increase in procurements resulted in a 1% adjusted gross margin decrease, excluding the FX impact at this level, which is EUR 267 million, adjusted gross margin would have grown by 3%. In the first quarter, net operating expenses decreased by 6% year-on-year and by 0.7%, excluding the FX impact. First quarter net personnel expenses fell 0.8%. External services were down 2% and operating income grew 24%.

On a recurring basis, and excluding the FX impact, net operating expenses would have grown by 8.1%, mainly due to the ENW contribution. Analyzing the results of the different businesses and starting by Networks, its adjusted EBITDA grew 9% to EUR 2,048 million, driven by the strong performance in the U.K. and in the U.S. Excluding here also EUR 94 million on FX impact, adjusted EBITDA grew 14%. In the U.S., IFRS-adjusted EBITDA increased 22%, reaching $612 million due to higher rates in distribution, Avangrid contribution from transmission, including the positive contribution NECEC line following the 16th of January COD.

In the U.K., EBITDA was up 32% to GBP 447 million, with higher contribution from ENW versus last year as consolidation started in March of '25 and also an increasing contribution from our transmission business, thanks to the higher RAB. In Brazil, EBITDA fell 0.7% to BRL 3.6 billion, with higher revenues due to yearly rate reviews offset by lower inflation and lower demand growth versus last year. In Spain, EBITDA increased 6.2% to EUR 426 million, driven by the 658% new regulated return and also with a EUR 15 million net impact, positive net impact from adjustments due to past year's remunerations.

Q1 '26 Power & Customer business EBITDA was EUR 2 billion, 3% lower than last year. During the quarter, Iberdola produced 33,000 -- sorry, 33,000 gigawatt hours of electricity with 86% sourced locally and being emission-free, which is a reference of the EU targets regarding power production. In Iberia, EBITDA was EUR 1,002 million, 3.2% down, affected by ancillary costs, regulated gas rate and lower prices despite higher electricity sales. As of today, Iberdola has record hydro reserves as mentioned by the Chairman, which will help the performance of the group in the second half of the year. In the U.S., EBITDA decreased 32% to $196 million, with lower contribution from wind, thermal assets and a negative timing effect that will normalize during the year and despite better prices. In the U.K., EBITDA increased 16% to GBP 493 million, thanks to higher wind resource, both in onshore and offshore, more than compensating lower prices and better contribution from the Supply division driven by better margins.

In the rest of the world, EBITDA decreased 7.6% to EUR 212 million despite the 37% higher offshore production due to lower contribution from our onshore wind assets affected also by the sale of some geographies like Hungary and France and a negative impact from higher ancillary costs in Portugal. In Brazil, EBITDA increased to BRL 500 million. Depreciation and amortizations and provisions grew 9% to EUR 1,476 million, driven by a higher asset base and a normalization of provisions versus exceptional recoveries in Q1 of '25. Adjusted EBITDA decreased 1% and reached EUR 2,591 million. Excluding EUR 80 million of negative FX impact, it grew 2%.

Net financial results improved slightly to EUR 497 million due to a EUR 4 billion lower average debt and helped by the currency depreciation despite EUR 56 million worse derivative results. Regarding debt structure, fixed debt, excluding amounts to 77% at March end, 12 percentage points above our fixed EBITDA reducing a risk of negative impact due to a possible interest rate increase as a consequence of the Iran conflict. New debt increased EUR 1.7 million -- sorry, net debt increased by EUR 1.7 million versus full year '25 to EUR 51.9 billion, mainly due to the currency appreciation, CapEx and dividend payment in the quarter, partially offset by the FFO generation, including the net EUR 1.6 billion collected from the Mexico sale to COGS and payment linked to Brazilian minorities acquisition both executed in April, debt would have been EUR 50.3 billion in line with year-end levels. So better debt levels compared to Q1 '25 and 7% higher adjusted FFO that reaches 12%, excluding FX, delivered solid credit ratios for our BBB+ Baa1 rating. These metrics clearly support our rating and underlines the group capacity to grow while having a strong balance sheet.

Our adjusted net debt to EBITDA was 3.4x below 3.7x in Q1 25%. The adjusted FFO adjusted net debt reached 24%, well over the 21.2% in Q1 '25. And our adjusted leverage ratio was 44%, 3 percentage points better than the 47% in Q1 '25. On a pro forma basis, ratios improved even more, as you can see in the slide.

Q1 adjusted net profit grew by 11% to EUR 1,865 million compared to the EUR 1,674 million adjusted net profit in Q1 '25, excluding the EUR 99 million FX impact, adjusted net profit would have grown by 17%. Neoenergia minority shareholders acquisition although it does not contribute to higher EBITDA reduces the dilution at the net profit level. And in this quarter, adds EUR 57 million to the net profit. In addition, it simplifies Iberdrola financial structure and increases the weight of networks in our net profit. The slide presents the reconciliation between reported and adjusted net profit. This is shown in more detail, as I mentioned before, in the annex. As well, we are showing in the annex, the calendar for the final dividend.

Thank you very much. And now the Chairman will conclude the presentation. .

Thank you, Pepe. To conclude this first quarter results, confirm the resilience of Iberdrola business model and the current context of geographical uncertainty and reinforce our positive prospect for 2026. The coming quarters, network will continue to be our main growth driver, thanks to an ongoing increase in our regulated distribution and transmission as well as the impact on new regulatory framework like RIIO-T3 in the U.K. or the annual target adjustment in Brazil, where we will also benefit of higher contribution from Neoenergia at the full acquisition of minorities. As mentioned, this transaction will simplify our structure in the country, accelerate our strategy focusing networks in line with acquisition of a grid minorities or the integration of U.S. in the U.K. last year. .

In Power & Customer, we will add 2.7 gigawatts before year-end on top of the 1 gigawatt commission in the first quarter. And our hydro resales continued record levels driven by strong hydro factors in January and February and the positive performance of pump storage. We also continue improving operational across our businesses. And in terms of financial profile, our current debt levels and the ongoing cash flow generation will allow us to increase investment in presale strong credit ratios. This positive operating and financial outlook is leading us to upgrade our guidance for 2026 to expect the growth of more than 8% in adjusted net profit, excluding capital gains from the asset rotation, we have always done, will apply for future efficiencies. And we expect to continue accelerating growth to the 2020 and beyond benefiting from increasing electricity demand outlook across energy users and geographies driven by technology process and new energy policies.

As government tried to capture all the positive impact of electrification in terms of strategic autonomy and division and competitiveness. In this context, over the last month, we have continued securing new investment opportunities in all our key countries. United States, the consensus or the need of generation network infrastructure is becoming unanimous given the strong increase in demand.

According to Standard & Poors Annual U.S. CapEx will grow by 11% per annum from '25 to '28. For Avangrid, this mean additional investment in transmission and distribution and generation. Including repowering and life extension of part of our current fleet of 11,000 megawatts. In the U.K., after the increase in transmission investment already confirmed by T3, we also expect significant growth in distribution in the next regulatory period starting in 2028. The government confirmed support to offshore wind with a year 8 auction expected later this year. As you know, Scottish Power is project. It's already bid, is ready to bid. It has its supply chain totally secure.

We also see increasing opportunities in Continental Europe offshore wind, for instance, in France and onshore technologies. As well as the Iberia retail business where we keep leading leadership in customer numbers and quality. In Brazil, the renewal of distribution concession for 30 years and with improved conditions, we will bring more visibility in the context of increasing investment needs. Finally, in Australia, we are already designing our first transmission project in West Victoria, and we are working in new opportunities in this business for the coming years. As well as in additional growth in onshore wind, solar PV and batteries.

Artificial intelligence is also generating new opportunities on electricity demand growth and huge potential to optimize business processes, our increasing additional revenue efficiency across our electricity value chains. All in all, you can be sure we will continue delivering strong, sustainable, predictable and resilient growth and in result and dividends as we have done in the last decades.

Thank you very much for your attention. We are now ready to answer your questions. Thank you.

The following financial professionals have raised the following questions: Philippe Ourpatian, ODDO, Pedro Alves, CaixaBank; Pablo Cuadrado, JB Capital Markets; Meike Becker, HSBC; Manuel Palomo, BNP Paribas, Peter Bisztyga, Bank of America; Rob Pulleyn, Morgan Stanley; James Brand, Deutsche Bank; Jorge Alonso, Bernstein Socite Generale; Fernando Garcia, RBC; Javier Suarez, Mediobanca; and finally, Skye Landon, Rothschild.

The first question is, could you outline the key drivers of Iberdrola's Q1 2026 net profit and explain the main factors behind the year-on-year growth?

Thank you very much. And already, as I explained, in networks, we expect a strong performance in the U.K. and U.S. due to the consolidation of electricity in the West from March 2025, higher rates and contribution from NECEC interconnection between Cara and Massachusetts and also a higher ramp in all countries because of the investment has been doing.

In power, business affected by nonrecurring impacts, the cost of service in Iberia in 2026 and some timing effects in the U.S. was affected this year. And as well in positive, we have the higher production. Below EBITDA, a good evolution of our financial expenses. Positive impact of the 100% acquisition Neoenergia that we have already mentioned before. And that makes our net profit grows by 11%. even with a negative impact of almost EUR 100 million to the FX. So without this one, the net profit that Pepe mentioned was 70% increase on adjusted terms.

Next is, could you elaborate on the new 2026 net profit guidance and summarize the main operating and financial drivers you expect to support delivery over the remaining of the year -- remainder of the year?

So almost on the same line that I was commenting for 2026. We expect to continue the strong performance during the rest of the year in networks growing the regulatory asset base in all countries, new distribution framework with better rates, GT3 from April, new interconnection between Canada and Massachusetts, better tariff in Brazil that has been already adjusted in the last few days, additional contribution for Energia for the 100% ownership. And in power, we have installed 1 gigawatt in the last 3 months, and we expect to make another 2.7 additional before the year-end. we expect to continue to have the strong renewable output after last year, very bad very low production, especially in the U.K. Our hydro reserves are in record levels, which -- and a part of that one, we have the very good performance and a good spread of our pumping storage facilities, which I think only in the first quarter, we have already produced 1.6 terawatt hours, so which I think is an important percentage of our total electricity generated with hydro. We have lowered and better ratios the interest rates mainly are fixed or hedged. We are not expecting significant volatility to the political geopolitical dynamics, as I mentioned before. because our regulated transmission distribute than Networks business. And because our power, 86% of our production is not linked to fossil files, 100% of 2026 is already solved. So that's why we are improving our guidance to an expected growth for more than 8% in adjusted net debt, excluding capital gains, which always we use for future efficiencies.

Next is related to the fiscal tax rate at the end of the year, what is the expectation we have?

Yes. Well, in this quarter, our taxes were -- have been affected by a reversal of a provision, thanks to that we have won award a court case and also impacted by the fact that the countries with higher tax rates have been lower contribution to our profits. We are expecting that our tax rate will go towards around 20% along the fiscal year. So it will increase to reach these levels of around 20% at the end of the year.

Next is related to one slide that has been explained already, but it's related to the impact of the Iran crisis in our operations, supply chains and financial evolution.

As I mentioned, we don't expect significant in the short term because 85% of our assets are in a countries not exposed to the conflict. Our growth is focused on regulated networks, which is 2/3 of our investment is coming to this segment. And the U.S. and U.K. represents 65% of our total investment. 75% of the EBITDA will come from regulated long-term contract activities by -- in 2028, 2030. 85% of the production as well in 2020 already secured through CFDs, PPAs, et cetera. And the supply chains are not affected by strength of dynamics because we are focusing local supplies were not purchase to the area. The fact today, 93% of our strategic agreement for investment is already secured.

We have a minimal exposure to commodities. We have not already long-term contract of gas. So I think that is not affecting to ourselves and the negative. I think it's, for me, as I mentioned, the current context prove again, the electrification is the best route to energy security, strategic economy and competitiveness. I think energy security is national security and electricity as is repeating, now all the European leaders is the solution. It's not a threat. It's not a problem.

Next question is related to asset. Is asking more details on the artificial intelligence initiative of Iberdrola.

Pepe? Pedro? Yes.

Thank you, Chairman. I think we're approaching now almost 400 projects of initiatives in AI and more than 70% are generative AI and more than 10% of those are robotics. These projects cover all corporate functions, all businesses and all geographies. They are linked to efficiency but also very important to new business opportunities. Very important, this is a process transformation. More than 70% are in-house made. I think we will see positive impacts as the Chairman said, and we will be updating in the upcoming quarters.

Next question is related to the recent closing of the Mexico deal to, including timing, expected capital gains and intended use of proceeds.

So as we informed to you, the transaction was closed on Friday. That means we received the money on Friday. The figures were in line with -- we announced last summer when we signed this agreement. We are calculating the capital gains in detail. But of course, it's going to be several hundreds of millions of euros. And as usual, we will use this money, this capital gain to achieve efficiencies in the future. And that will not impact our guidance, as I mentioned before. So now you allow me, I will pass to Spanish [Foreign Language]

So that I can thank the workers of the Iberdrola Mexico for their work over the last 25 years, and we have assisted them in the development of the country, and we have supplied them with safe and competitive power for their citizens and their industry. And also I'd like to thank the respective governments and the institutions and our customers and suppliers, too, who, over the years, have supported us and have collaborated with us throughout all of this time to be able to provide this service.

And as I said previously on previous occasions, that is one of the main reasons behind this operation is our priority. Our priority is focused on investing in electrical grids, in -- which is an activity that is in the hands of the National Electricity Commission. So we can't really do anything in that particular area. But I would like to say, however, that we are deeply satisfied because we are leaving top-level electrical infrastructures. And I know that now and in the future, all the Mexican citizens will benefit. And as I also pointed out to the Mexican authorities, we want to invest more. We want to invest more money in Mexico in the future, when the circumstances allow us to do so once we have completed our investment cycle.

Next is, could you update us on the rationale and process of acquiring the remaining minority interest in Neoenergia and expected implication for Iberdrola results and financial structure?

Pepe?

Yes. Well, since we bought the minority stake from, it made all the sense for us to complete the 100% of the capital. Obviously, the consequences of that is that it will improve our results basically through lower minorities. It will also help to simplify our financial structure and operations. We are now more and more exposed to the network business at the net profit level as we did also the acquisition of the 100% of Avangrid in the U.S. and the integration of ENW in the United Kingdom. So clearly, our focus on -- and this proves our focus on networks. In addition to that, Brazil is a core geography for us with very good prospects with very regulatory situation and where we are investing heavily, and we plan to continue to invest. I don't know Chairman, if you want to complete this with your...

Yes. Well, -- thank you, Pepe. I think I was 2 weeks ago in Barcelona with President Lula, he was visiting Spain and I have already very good meeting with himself, reaffirming our commitment with the country. We are the largest investor in the country last year, more than BRL 30 billion running by the purchase of minorities that Pepe mentioned. And he invited me for the concession renewable signature, ceremony on the -- I think it's sixth of next week on the sixth of May. And I will be there in Brasilia with himself already signing this one, which I will already participate in.

As I mentioned as well to the President Lula, our expectation is to increase heavily our investment in all our territories distribution, but mainly in the area of the west part of Bahia, where it is a huge demand that has not been covered because of lack of infrastructure. So -- but I think in general, our commitment with the country reminds and I think next week, I'll be present there in Brasilia with the President Lula for signing the ceremonial signature of the renewable concessions.

Next, could you comment on the current U.K. offshore wind environment, including Iberdrola's intention for the upcoming AR 8 auction and your perspective on the new seabed lease auction process.

So I think U.K. has a clear electrification strategy. I think electrification is I think the work with us energy security, national security is a word we not invented for myself was already invented by the British Prime Minister. I think that provides long-term energy autonomy that provide competitiveness. And I think is clear is one of the key instrument to achieve his goal and to increase the investment in offshore is crucial for them. I think that is the reason why the government has recently bought forward the year 8 to this year. So it was planned for the future is done.

I think for this project, we have already a project for this auction. We have a project of -- is Anglian North, 900 megawatts, which is ready to participate, which we have all the supply chain secure. But I think we will follow, as always, our profitability criteria.

Regarding the sea base lease has been recently announced, I think, for us is still too soon. We will review the details when they will be available. In any case, I would like to inform you that we have in this moment, more than 5,000 megawatt of offshore seabed rights 2,000 in Scotland, another 3,000 floating. So I think we have plenty of seabed rights for continuing our expansion in this field in the U.K. in the future.

Next is related to the hedging position and expectation for prices and volumes sold in Spain and the U.K. in the period 2026, 2028?

Pedro?

As you would expect in '26, we have already committed 100% of our available production in '27, it's already 80% plus. And in '28, we are in line with the capital markets guidance. I think in general, the prices we expect in line with the planned estimates that we gave to you before. As the Chairman said before, we will benefit from additional capacity and from increasing pump storage margins.

Next is the audience is asking about the blackouts in Spain, the past year blackout, including key findings to date, Iberdola position related proceedings, customer claims and any view on the evolution of ancillary service costs in the future.

I think we have always said, as has been confirmed by all report and investigation, and all the audio has been public, not only on the day of the blackout, but also in the previous day, weeks. So I think that's clear what is this one. This blackout that as a result of inadequate planning, management and operational electricity system and the lead to ensuing synchronous unit program despite the power was available. So I think if everything has been done properly by Red El ctrica. I think we can't ask Red El ctrica why it has changed the operating model, adding more synchronous capacity now. So if all the thing was correct this day, why they changed the operational system. .

So now we are paying billions of euros of additional costs, citizen and companies so in our accounts just because they changed the operational system, putting more synchronous capacity, much more synchronous capacity because the power was available. We have already a power, installed power in the country which is 3 or 4 or 5x more than the power needed on a day-to-day basis. So I think it's not a question of lack power.

So that's why I think it's something we -- for me is important we should distinguish between transmission, network ownership, which is a business activity and the system operation, which is not a profit business, it's a public responsibility and that is why in other countries, both activities are fully separated. System operator is taking -- have to take care of keeping the lights on. Network activities are already as a business, which is to maximize the profit. When you miss those things, it could conduct already situation, which can already make problems at those what we have already faced. In any case, Gerardo, you would like to add anything?

Yes. Thank you, Chairman. Just to say that the CNMC in his report about the blackout has stated that on the day of the blackout, the system had enough regulatory, normative and technical tools to avoid blackout, in place to avoid the blackout. So I think that is very important because it's the only official report because CNMC industry is the only institution competent to -- in relation to the blackout. So regarding the proceedings initiated by the CNMC, therefore, the CNMC has also stated that none of them -- none of these proceedings are related to the events that led to the blackout.

Regardless of that, I think that we have a very strong defense, very strong position to defend these cases because we have always acted according to law and with full transparency to the system operator and the regulator. But as far as we know, the only very serious proceeding directly related with the blackout, according to those reports, the audios the investigation, et cetera, is that is open to Red Electrica Espana.

And regarding the cost of claims, finally, we haven't received the reality is that we haven't received many claims compared to the size of our customer portfolio. And of course, we have insurance policies. So I would say that our position is very strong.

As I mentioned, I think following the blackout Red Electrica has doubled the use of combined cycle plants, nuclear for voltage control, what they call reinforce operation. This reinforced operation now is not becoming reinforce, it's becoming regular. This seems, I think if that is regular, should be recognized as regulated cost as is already in other countries, not affecting to the certain citizens and affecting to the companies, to the operators of the training companies.

Next is how would you describe the current performance and outlook of your retail business in Spain, given the increased competition.

Pedro?

The underlying business in retail is doing very well in Spain. We continue to be the market leader, both in numbers and quality of these customers. We have much lower churn rate than our competitors, especially for new entrants with a very strong customer retention. There is a good evolution of our customer portfolio, including the second brand, Niva. So we are very comfortable now on that position as well. But we continue to add products and services as well.

Question 12 is what is the Iberdrola's current view on the role of nuclear generation in Spain? And could you update us on the status of Almaraz extension process?

I think as you have repeated several times, nuclear is necessary, is safe, is efficient and contribute to lower prices due to the security of the system. In fact, now the European countries with nonnuclear have structural higher prices. That is the case of Germany and Italy, which is even EUR 40 per megawatt hour more than France or Spain. I think a certain analyst is already fixing this number, Pricewaterhouse. And so his report is talking about 47. But the reality today is 40, which I think they are not far from what this we are predicting this consulting company.

Also, the European Commission led by the President of is urging member state to avoid premature retirement of existing nuclear assets, even he mentioned about it was a mistake -- European mistake of closing and not investing in nuclear. They can provide because they provide firm low carbon and low-cost electricity. I think in other words, is talking about European critical infrastructure. So nuclear is more than national is becoming European critical infrastructure. I think that was confirmed again in the last week in the Accelerate communication. And that's why I think we have already asked the extension Almaraz to 2030. That is -- the process is ongoing.

I think the Nuclear Security Council, Spanish soon they will be with product information. In any case, all the nuclear need to have real a sustainable remuneration regime, some other countries did. So I think it secured -- we have either to secure price at attractive level or either to reduce taxation whatever thing to make already to give availity of that one.

I think in the case of taxes, in the case of Spain, certain community -- autonomous communities, has already renewed, so they are ready to reduce the local taxation, so which I think that is in the mind of the people. And nothing is -- my personal vision is that nuclear facilities in Spain and other countries will be extended for longer term. I think it's in the case of Europe are essential infrastructure to secure electricity supply. So I think it's as European Commission is suggesting, it's becoming critical for keeping the lives on and the European competitiveness just to -- as a key tool for minimize the external dependency to increase the competition, reduce volatility and not to be already depending on volatilities with external factors are those ones we are suffering those days with the progress of the trial.

Next is, could you provide an update on the construction status and operational ramp-up of Vineyard Wind 1 offshore power plant?

Pedro?

Practical terms, the wind farm is completed. We finished the construction of all the positions. The levels of availability, we expect to be in line with other offer wind farms in operation. Very important, this -- many of the positions have been exporting power for many months. Also, the financing is advanced, both tax equity, tax credits, but also the debt financing. So we are moving forward very well with the asset. .

So I think from the -- I know from the 24th of April is in commercial operations. .

COD was declared.

I think that is in commercial operation now.

Next, could you outline Iberdrola's growth opportunities in the U.S. Power business, given the increase in electricity demand?

Pedro?

As the Chairman highlighted, we have passed 11,000 megawatts in the U.S. What we see is a strong demand increasing in the U.S. More power is needed. That's clear. AVR is and continues to invest. We added almost 1,300 megawatts of capacity. We have 700 megawatts under construction, we have identified 3,000 megawatts of additional potential capacity, more than 1,000 of those very advanced status. And of course, life extension or power in the short term are a clear path. Therefore, clear interest of some of our existing customers for new PPAs. By the way, we're increasing also for the first time, a new battery storage, we just approved a project in Oregon. So we are starting now in that field.

Next is, could you explain the recent FERC decision to reduce allowed ROE for New England transmission owners and what the expected implication for Iberdrola?

Pedro? .

This is a matter that affects all the transmission operators in New England. As you know, there is another case in, which we expect the rolling soon. And therefore, since it's a similar procedure, we will see what happens there. it's important that they allowed no payment to be done for the next 12 months. And there is no impact.

But in any case, I think you have to be aware that is something which is coming from 2011. I think something 14 years ago is revising, decision they took 14 years ago to say that probably the -- how they pay in this 14 year was not already whatever. So I think to talk about retractive actions with 14 years. So we are quite confident that the courts will already take into consideration the comments which are making all the people affected with all across the United States. I think in 14 years, has not revised the terms of the vision they took. And 14 years later, they are looking, then what therefore they pay considered is not already that will have to be paid. So it's something which -- it's difficult to be understood by engineers like myself. I don't know layer will understand, it's still better than we engineers.

Next is how do you assess the current affordability debate in both in the U.S. and in Europe? And what measures do you believe would be the most effective in reducing electricity bills for customers?

So as you know, the tariff, the electricity tariff has 3 main concepts. One is the electricity cost, which is power and networks, power, it depends of its country, what is the mix of power generation -- in networks, it depends how efficient are already this network. I can say that in general, European networks are more efficient than those which are another side of the Atlantic. Second, parameter is taxes. So I think taxes in the case of Europe is 4x higher than those which are in the United States or in China. So -- and the last one is the industrial and energy policy cost.

I think there's a lot of things included the tariffs, but we are already -- the consumers are paying or the company we are paying. We have to see already with this energy policies in each country. So as I mentioned, in terms of taxation, I think this is represented in most cases in Europe, more than 40% of the bill, 40% of the bill, 10% in the state. So -- and I think so that way, I think the fastest way of that 1 is reducing taxation to reducing bill. That is being recommended by European authorities. So is -- which we have to be -- on that one. If we would like to electrify, we cannot penalize. We have to incentivize, not penalize I think it's -- and I think the big threat that we have affordability in the case of that one is to continue relying in fossil fuels. I think in my professional life, I mentioned before, I have already had 6 or 7 different energy crisis. In all these energy crisis, the solution is not to penalize electricity, is to incentivize electrification.

Now that is already on the communication Union as the key driver for that one. So that is what they are saying, more electrification, more indigent resources, renewables and nuclear base of the European energy mix. More distribution and transmission grid, more interconnection between countries and more access to consumers to electricity. I think they are already a demand which cannot be supply because of lack of infrastructure of electricity. People is willing to electrify more the uses. But the lack in demand cannot be supply because of lack of infrastructure. Because in some countries, we've been suffering -- still we are suffering certain cuts of investment. So they are limiting the investment we have to make or reducing even the operational costs as they did in Spain, which I think if we increase -- if the demand is increasing in infrastructure is not duly maintained because there are not enough budget money recognized, I think that it's not easy to be electrified that one.

And certainly, lower taxes in the electricity bills, which will not be discrimination with gas. I think in some countries in Europe. So gas taxes is 4x less the electricity. So I think we have to be clear. We would like to depend on feel who would like to electrify. Who would like power, who like fossil. And that is we have to be correct. I mentioned in the case of U.K. This energy crisis, -- and they revised the taxation of electricity. So we have to beat the deposit. So even it's not affecting ourself this well. So -- and is I think something which is clear, those countries, we have more penetration.

Our renewables and nuclear have already lower structural prices. Italy and Germany has higher prices than France, in Spain because they are less renewables, nonnuclear, Spain or France, we do we have more nuclear and more renewables than other one. And I think that is -- it's a clear situation.

Next is totally linked with the answers you recently given. What is your perspective on the proposed reform to the European electricity market? And how do you think policymakers should address the current price environment?

So I think I repeat again. I think the measure proposed in this crisis show a clear change compared with 2022. Governments in Europe agree the electrification is the solution. So electricity is not a problem, but it's the solution. So all the measures should be directed against not electricity, against fossil fuels. I think ETS, in my opinion, is a key tool to promote Europe energy independence. It has already proven it works well. It send the right signals and it has flexibility mechanism. So they have to be used the funds already obtained by the carbon emission for electrifying not for using for making another usage in the national budget. So that's why, for me, the structural solution, and that is what is proposed in the European Commission, it's a little electrification with more renewables bake with more grid and with more storage and more interconnections.

Next is, could you comment on your net debt expectation for 2026, including the main drivers versus year-end 2025?

Pepe?

Yes. The -- we are expecting to end the year with a level of debt of around EUR 55 billion. And basically driven by the strong investments that we are doing, we are -- as the Chairman has said another year in record of investment and obviously, dividend is also increasing the debt despite the FFO generation. But as we have mentioned, the expectation that we've is almost finished.

The other element that is affecting us a little bit is the FX impact, especially of the real, which is slightly higher than what we had expected. In any case, the EUR 55 billion is absolutely in line with the CMD and the plan that we have and Capital Market Day ratios expected. So to be in a BBB+ ratio.

Next is Iberdrola considering developing gas-fired power plant in the U.S. and how would this fit within the current growth priorities?

So as you know, our main business in United States is networks. It's more than 80% of our business related to networks. Network is already regulated by states. And I think we have a huge let's say, prospect of investment in these states because of the needs of that one. Also, I think we see clearly is an increase in power demand, but this power demand as well is needed in networks for already for taking this electricity in the home in the industries, what they're required for attending this demand. But I think you know, as Pedro has mentioned, we have already -- we are focused in solar, in onshore wind, and in batteries.

We have a huge pipeline, and we have huge opportunities in repowering or extending life of the existing 11,000 megawatts in the operation, and we will concentrate on that one. Concentrating networks, first priority. And second, with our present pipeline and with our present portfolio of power in operation to increase our production using the existing assets or making already new assets with the pipeline we have enhanced in this moment.

Next, if you comment on recent market speculation regarding offshore wind agreements involving other developers and whether Iberdrola's approach to offshore contracting in the U.S. is changing?

I think we -- traditionally, we are not making comments based on rumor or even uncertainties, but about our competitors. So we have not details about that one, and we will have details, we will analyze what is exactly they are doing. But I think for the time being, the only thing is comments, but we have not already any certainty about all those things.

Next is, can you provide an update on how is the data center industry evolving in Spain and in other markets? How is the pipeline of projects in terms of liability and connection requests progressing?

So as you -- as I mentioned several times, we have already -- our main customer worldwide are those which are already precisely working and using already data centers. We are already PPAs per annum more than 120 terawatt hours to 3,000 gigawatt hours a year. And what we try is to facilitate the expansion of these data centers to then is our customers who would like to use our capabilities our knowledge and our skills for helping them to make that one. Saying that, I think is the fact that in the last few months, we have already signed more than additional kilowatt hours of new PPAs for this data center use. And that is certainly is going to be an important driver of growth demand. So -- but I think what we are insist facilitating.

We have some projects in Spain, and we are already working on it. But I think the idea is to facilitate those ones for our customers. I think we have already knowledge of the permit. We have land, we have connection. We have power, and that is what we are putting at the service of the customers. But that is not already -- we are not making already a special business area on that one. It's something which is helping to business is to sell to them as much electricity as they need in the best condition as possible for the longer period of time as possible. And for that, I think we are doing our best for helping them to build the infrastructure they need for making already these data centers.

Next and last question is what potential opportunities do you see versus your current plan, 2026, 2028 by geography and business, upside opportunities.

So I think we are seeing more opportunities across other countries, as I already mentioned in my presentation. I think the electrification is the electrification is a reality. We are seeing rational demand for several users, a part of artificial intelligent another one as well. I think in the case of U.S., we have additional demand of investment in infrastructures in all the states. So I think regulators is asking for this investment. Also, we are just making more investment in power. I think as we have already had 1,300 new megawatts in U.S. in the last 12 months. We have 700 construction -- and as Pedro mentioned, we have 11,000 megawatts of capacity in which we have identified 3,000 or 4,000 for life extension of repower in the short term. So -- and also, we are increasing -- we have seen increased interest in our large customers for expanding and extending the PPAs, we are not pressing for making new ones. .

Also, we are seeing opportunities in battery storage. We have announced the first one in Oregon, but will follow another one in the near future. In the U.K., I think we have already -- the final determination is better than expected. It's higher TOTEX, it's up to EUR 4 billion. I think it's a slightly increase in the rate of return. Is faster, that is important, cash recovery. And I think also, as I mentioned as well, the new offshore wind auction year this year, which we have already just one project, which is ready with all the supply chains already agreed and close.

And in Continental Europe, additional onshore and offshore project. I think France announcing the new auctions for offshore, which I think in the terms we look -- could be attractive. We will analyze more in detail. And in Brazil, as I mentioned as well, once we sign this concession extension renewables for more than 30 years, I think new additional investment will be needed I think also we have already positive things. All the investments are recognized on an annual basis, which we had already as much investment we are making in a year. The following year will be recognized in our railways and.

In Australia, the things are moving. I think we have already a project in this moment in the design of transmission. And we have another one in the portfolio. We're making as well something in the future. We are putting additional investment in generation in battery storage. I think we are adding almost 100 megawatts in the last 12 months. And also in battery storage, we are already now project with large batteries, batteries up to 8 hours, which I think that is already just is going to be the record in the battery in our more than 600-megawatt portfolio, that is going to be the largest one. So I think those are the main things. I think it's -- one thing is important is our pumping storage facilities, what we continue as well expanding. So in this moment, as you know, we have already in the short-term capacities, when I say short term, 20 hours or 24 hours is something like 40,000 megawatt hours capacity. And we have already another probably 100,000 megawatt hours of longer periods of time. I think those ones we are pumping to certain, too large dams that we use across the year.

I think we avoided the water flows to the sea, and we are keeping these waters in our dams. And we are already almost every year putting 2 or 3 new pumping storage facilities in the country. I think in the last few months, we have already just put someone else in the Taco River and another one in the Tamega River. So we continue -- in the Tamega River, we are expanding as well. So we continue making that one because we consider pumping facilities is the most efficient manner. But in batteries as well, we are already investing. So we have already as I mentioned probably in this moment, 2,000 or 3,000 megawatt hours capacity, but I think we will expect to have to more than double that one in the next 2 or 3 years, and those given a good opportunity because the spreads are good. And I think as much renewable we introducing as more storage will be needed. And same thing and as much demand is increasing as much grid is needed, and that is what we are concentrating

Okay. So now I hand the floor over to Mr. Galan to close this event.

So thank you very much once again for taking part of this conference call. If there are any doubts, our Investor Relations lead by Ignacio will be available for any additional information you may require. Just to finish, you know our Annual General Meeting will be held in Bilbao, on the 29th, and we invite all of you to join us either in presence, or yes in through the delegation or even connected by the web. So thank you, and see you soon. Thank you.

Good morning, ladies and gentlemen. First, we would like to extend a warm welcome to all of you who have joined us today for our 2025 fiscal year results presentation. As is customary, we will follow the traditional structure of our events. We are going to begin with an overview of the results and the key developments during the period.

The presentation and the Q&A part will be delivered by the top executive team joining us today: Mr. Ignacio Galan, Executive Chairman; Mr. Pedro Azagra, CEO; and finally, Mr. Pepe Sainz, CFO. After the presentation, we'll move on to the Q&A session. I would like to remind you that we will only be taking questions submitted through our website. Please send your questions exclusively via www.iberdrola.com.

Finally, we expect today's event to last no more than 60 minutes. Should any questions remain unanswered, the IR team will, as always, remain fully at your disposal. We hope that this presentation will be useful and informative for all of you. And now without further ado, I would like to hand the floor over to Mr. Ignacio Galan. Thank you once again. Please, Mr. Galan.

Thank you, Ignacio. Good morning, everyone, and thank you very much for joining this conference call. In 2025, reported net profit reached EUR 6,285 million, up by 12%, even excluding EUR 464 million noncash charges to adjust the value of our renewable pipeline in different countries. Excluding those charges, net profit will reach EUR 6,749 million.

Adjusted net profit, which, as you know, exclude the impact of capital gains increased by 10.3% to EUR 6,231 million above our guidance. Adjusted EBITDA rose EUR 15,684 million, up 3%, with 21% increase in networks, reflecting our high regulated asset base in improving framework in our core geographies, partially offset by nonrecurring impact of ancillary service costs in our power business due to the reinforced system operation in Iberia as well as lower prices. Total investment reached EUR 14.460 billion with 2/3 allocated to transmission and distribution networks, driving 12% growth in our regulated asset base in just 1 year to almost EUR 51 billion.

In Power & Customers, we added 2.7 new gigawatts in operation, and we have 4.7 gigawatts more under construction that will start producing next quarters. This strong expansion was combined with a further improvement in efficiency, thanks to an increase of only 1% in our current recurring net operating expenses, well below gross margin. And financial strength with net debt down EUR 1.5 billion, driven by an 8.2% increase in our operating cash flow, up to EUR 12.811 billion. This positive impacts of our asset rotation and partnerships plan and the capital increase last year, improving our FFO and adjusted net debt ratio to 25.5%, comfortably in the range of BBB+ rating. Finally, yesterday, the Board decided to propose to the General Meeting a total dividend of EUR 0.68 per share.

As you can see, 2025 has been a transformational year for Iberdrola, thanks to the implementation of our strategy. In the last 12 months, we have a remarkable progress in all the pillars of the plan we presented a year ago. Reinforcing our focus in networks infrastructure with transmission as new growth vector in the U.K., where we have secured EUR 14 billion of TOTEX for the next 5 years under RIIO-T3, including [ submarine ] interconnection like Eastern Green Link 1. In the U.S., after the commissioning the NECEC interconnection between Massachusetts and Canada and now also in Australia, where we were recently awarded EUR 1.2 billion line in the state of Victoria as we expect it to complete by 2030.

On top of that, we have also continued increasing our distribution investment and progressing in the definition of new frameworks for the coming years in all our countries, mainly in Brazil, where the regulator has already approved the renewal of our distribution concession for 30 years, more providing us visibility up to 2060.

In addition to organic investment in the asset rotation transaction completed in 2025, have also confirmed our strategic focus on networks, mainly due to the acquisition of Electricity North West now fully integrated and the purchase of Avangrid and Neoenergia minorities.

This record activity is also expanding our contribution to social development and job creation across our geographies, with 4,500 new hires in 2025 and a total workforce of 45,400. EUR 13.2 billion of purchase to thousands of companies that support 0.5 million jobs across our supply chains, and tax contribution of EUR 10.4 billion, and EUR 425 million allocated to research and development, reaffirming our position as leading private utility worldwide in innovation.

Thanks to our performance in 2025, we are facing 2026 at the beginning of new growth phase. But before that, and given that we are from Bilbao, let me share with you the few figures that show our transformation over the last 25 years. Since 2001, we have multiplied our total asset base by 8x to EUR 161 billion, driven by the expansion of regulated networks asset base to EUR 51 billion, 10x more than 2001. Our generation capacity from 16 to almost 60 gigawatts today. And our storage capacity was multiplied over 3x, thanks to the investment made in existing hydro turbines to make them reversible, new pump storage facility, like Tamega, and battery project across the world. On top of that, our international expansion has fully transformed Iberdrola from utility based in Spain with just 1% of our activity in other markets in 2000 to a global utility with 65% of our business in the U.K., U.S., Germany, France, Brazil and Australia.

As a result, we are reaching our 125th anniversary, consolidated as the largest utility in Europe and 1 of the 2 largest worldwide with a market cap above EUR 135 billion, 12x more than 2001, even after paying EUR 47 billion in dividends across the last 25 years. And you can be sure that the key pillars of this growth story were our vision, our strategic [ coherence ], our ability to anticipate the structural shift in the sector across our access to financial resources and supply chains and our track record of execution. Are also all of them, the best guarantee to sustain growth in the coming years. We are demonstrating we are a company that always we fulfill our promises, even we overfulfill our promises. We overdeliver what we promised. It's a bit different with others, with they are promising, they are not delivering as much as they are promising traditionally.

Moving to 2025 result, adjusted EBITDA reached EUR 15 million -- EUR 15.684 billion with 2/3 coming from international business. The United Kingdom contributed with EUR 3,306 million and U.S. EUR 2,662 million; Brazil, close to EUR 3 billion; and the EBITDA from other European countries and Australia reached EUR 791 million; with Iberia contributing the remaining EUR 6 billion. As a result, 81% of our group EBITDA is already coming from A-rate countries. By businesses, Networks adjusted EBITDA grew by 21%, thanks to higher regulated asset base in all countries, new tariffs in the U.S. and Brazil and the consolidation of Electricity North West, while renewable power and customer EBITDA fell by 10% as a result of lower market prices and the impact of the so-called reinforced operation implemented by Red Electrica in Spain, partially offset by the addition of 2.7 gigawatts of new installed capacity worldwide.

Total investment reached EUR 14,460 million due to the acceleration of organic growth and the acquisition of Neoenergia minorities in Brazil. By countries, investment increased by 34% in the U.K., driven by 47% rise in networks due to the new transmission project and the ongoing investment of Scottish distribution Manweb and Electricity North West. U.K. investment in power also increased by 21%, mainly in East Anglia THREE offshore wind farm. In the U.S., investment increased by 2% as the growth in transmission and distribution more than offset the slightly lower investment in power after the completion of projects under construction. Combined, U.S. and U.K. contributed 60% of total investment, with 70% allocated to Iberia, 14% up to Brazil and 9% to other countries, mainly Australia, where investment more than doubled year-on-year, offsetting the decrease in Germany and France as offshore projects are put in service.

By businesses, Networks reached EUR 9 billion, almost 2/3 of the total, with 13% growth in organic investment, mainly in U.K. and Spain. And the U.S. and Brazil, where the increase in distribution has more than offset the completion of transmission project. Our regulated asset base increased by 3% to EUR 51 billion with transmission already represented today 25% of our total network assets. And this pattern will continue in the next years, reflecting the progress made in our regulatory frameworks and the construction of new projects.

In the United Kingdom, Ofgem published its Final Determination for RIIO-T3 with almost EUR 14 billion of TOTEX for Scottish Power Transmission up to 2031. This will imply multiplying by 4 the investment made in the previous 5 years, securing long-term growth and fully transforming the profile of Scottish Power.

In the United States, Avangrid benefiting from higher rates and the rising contribution to result of new transmission project that will accelerate 2026, thanks to the commissioning of our interconnection line between Canada and Massachusetts, adding EUR 125 million per annum to group EBITDA.

In Spain, the new remuneration methodology for the period '26 to '31 has already been published. While in Brazil, the regulator has approved the renewal of our distribution concession for 30 years up to 2060, and Neoenergia has completed this transmission project with a total contribution of EUR 250 million to EBITDA per year.

Finally, Iberdrola Australia was awarded as a transmission line in the state of Victoria with an investment of EUR 1.2 billion up to 2030. They will increase significantly our footprint and result in the country, and we continue developing a pipeline of additional transmission projects in another different states.

In Power & Customer, we invested EUR 5,260 million, well spread across the U.K. and the U.S., Iberia and other countries. By technologies, we invested EUR 1.7 billion in onshore wind, EUR 1.4 billion in offshore wind, EUR 1 billion in solar and EUR 1 billion in storage and retail. We have already put in service 2,710 megawatts of onshore and offshore wind, solar PV and storage. And we have 4,679 megawatts under construction as well a pipeline of more than 9,000 megawatts ready for 2028, more than enough, of course, to secure all the new capacity expected in our plan.

Regarding routes to the market, we have also sold all our production for 2026 with an attractive mix of regulated contracts with an average duration of 14 years. Retail customers and long-term PPAs, which already represent 2/3 of our total energy sales and will continue increasing, thanks to the ongoing signature of new contracts. As a result, we have been recently recognized as the leading seller of PPAs in Europe and 1 of the 3 largest worldwide.

Operating cash flow was up by 8.2% to EUR 12,811 million, reflecting the strong performance of Networks and the stable contribution from Power. This rise in cash generation up to EUR 1 billion in just 1 year, together with asset rotation and partnership and the capital increase of last summer has allowed us to reduce our adjusted net debt by EUR 1.5 billion to EUR 50.2 billion even after the consolidation of Electricity North West and the acquisition of minorities in the U.S. and Brazil, improving even more our ratios with FFO to adjusted net debt reaching 25.5% and adjusted net debt to EBITDA down to 3x.

Following the strong operational and financial performance, yesterday, the Board decided to propose to the General Shareholders Meeting a total dividend of EUR 0.68 per share, adding EUR 0.427 to EUR 0.253 already paid 3 weeks ago as interim dividend. These figures represent a year-on-year growth of 6.3% in dividend per share and 12% in total dividend payments, up to EUR 4.5 billion, taking into account the impact of a capital increase.

I will now hand it over to our CFO, who will present the group financial results in further detail. Thank you.

Thank you, Chairman, and good morning to everybody. '25 adjusted net profit reached EUR 6,231 million, representing a 10.3% increase compared to the EUR 5,651 million in '24 adjusted net profit. Reported net profit was 12% up to EUR 6,285 million. 2025 net profit would have reached EUR 6.7 billion if capital gains had not been more than applied to adjustments in our Power division and as the Chairman has said, mainly in renewables.

As the main perimeter change, I have to say, ENW has been fully consolidated since March. Another thing to note for you is that the Mexico P&L and debt is included here for illustrative purposes because in our reported accounts, it is classified as an asset held for sale due to the expected closing of the transaction very soon. FX evolution has had a minor effect on results, thanks to our FX hedging policy, with the dollar 4%, the pound 1.1% and the real 7.6%, all of them depreciated against the euro.

Our EUR 6,231 million adjusted net profit is beating our adjusted -- our guidance and is close to the EUR 6,285 million reported net profit. In this slide, you can see the details of the adjustments from '25 reported net profit to adjusted net profit. The EUR 379 million exclusion of U.K. Smart Meters capital gain in Q3 is more than compensated with the EUR 464 million in adjustments in our Power division, which are write-offs in our renewable pipeline. And the network cost recognition one-off in the U.S., a noncash item, which is taken out from our adjusted net profit, is also partially compensated with the inclusion of the cap allowance in the U.K. as it is a cash income.

Adjusted revenues rose 0.6%, driven by the Network business, while procurements fell 0.7%, driving up adjusted gross margin by 1.8% to EUR 24.3 billion. And here, we are excluding the cost recognition in the U.S. Networks. Excluding capital gains from asset rotation accounted at the operating income and one-off efficiencies, '25 net operating expenses improved 4.1%, affected by lower storm costs that also diminished gross margin. Adjusted net personnel expenses rose 1.9% due to a higher number of employees, as the Chairman has commented. Adjusted external services declined by 5.2%, mainly due to the EUR 350 million lower storm cost and adjusted other operating income increased by 10% compared to '24 due to the indemnities of past year costs, partially offset by the EUR 121 million negative impact of the East Anglia sale that -- it is compensated at the financial results. Excluding mentioned storm-related impacts and other adjustments, net operating expenses on a recurring terms grew 1%.

Analyzing the results of the different businesses and starting by Networks, its adjusted EBITDA grew 21% to EUR 7,794 million, mainly driven by the strong performance of the U.K. and the U.S. and a significant last quarter improvement in Spain. Transmission EBITDA is up 28% to EUR 1.1 billion and distribution EBITDA 19% to EUR 6.7 billion. In the U.S., the EBITDA reached $2,491 million, 73% more with higher rates in distribution and better contribution from transmission and positively impact since Q1 by the decision from the New York regulator that allows to register a regulatory asset under IFRS regarding past costs of $551 million. Taking out this effect, EBITDA is still up a remarkable 35% on an adjusted basis to $1,940 million.

In the U.K., EBITDA increased 28.7% to GBP 1,595 million, including 10 months positive ENW contribution and the growing contribution from transmission.

In Brazil, EBITDA was up 13.8% to BRL 13,837 million, thanks to higher revenues in distribution due to demand inflation and increase in rate reviews over a higher asset base. Transmission contributed positively with BRL 1.6 billion EBITDA, 56% up or BRL 583 million more than in '24 as all the lines have been completed.

In Spain, EBITDA grew by 31% to BRL 2,015 million. The result was positively impacted by the recognition in Q4 of incentives related to '24 and '25. The remuneration increase for the '24, '25 period, 6.58% and from the positive effects in Q4 '24 of a negative one-off in efficiency costs.

'25 Power EBITDA reached EUR 7.9 billion versus EUR 8.8 billion in '24, both excluding capital gains from asset rotation, which are EUR 1.3 billion lower in '25 as higher production due to 270 million -- 2,700 megawatts additional installed capacity did not compensate lower volumes and prices. Emission-free generation reached 85%.

In Iberia, EBITDA was EUR 3,921 million, 16.8% down with higher production more than offset by lower margin and sales, explaining part of the year-on-year variation and higher ancillary services costs, lower court rulings and higher levies despite the termination of the 1.2% revenue tax explaining the remaining decrease. Hydro reserves have reached an all-time record of more than 9 terawatt hours as of today.

In the U.S., EBITDA grew 0.9%, reaching $1,069 million, supported by higher prices and new solar capacity. This growth came despite the fact that '24 was positively impacted by the Arctic Blast storm one-off and by the sale of Kitty Hawkin the fourth quarter of last year.

In the U.K., EBITDA grew 0.4% to GBP 1,536 million, considering the GBP 324 million capital gain from the U.S. -- from the U.K. Smart Meters divestments in Q3. But adjusted EBITDA, taking out this capital gain, was down 20.8% to GBP 1,212 million, with lower prices and lower volumes in renewables and lower EBITDA from the supply business, driven by lower volumes. Net operating expenses included GBP 108 million negative one-off impact linked to the East Anglia THREE sale, which is more than compensated at the net financial results.

In the rest of the world, EBITDA grew 10.4% to EUR 796 million due to the higher contribution from offshore wind farms, St. Brieuc in France and Baltic Eagle in Germany, but with lower contribution from supply business in Portugal, due to a EUR 30 million negative impact of the ancillary services costs as a consequence of the blackout.

In Brazil, EBITDA fell 2.7% to BRL 1,283 million as a consequence of lower production and lower margins, but with a positive impact of BRL 297 million linked to the negative adjustment recorded in Q4 '24 following the classification of Baixo Iguaçu as held for sale.

Finally, in Mexico, EBITDA reached USD 632 million, decreasing 71%, with lower reported contribution due to the assets sold on February 26 last year and the higher contribution from the retained business, tanks -- sorry, the sold in February 25 last year and with higher contribution from the retained business, thanks to higher availability and demand. As mentioned at the beginning, the performance of the EBITDA from Mexico is for illustrative purposes, as on the official account is classified as held for sale, so the results are on the discontinued operation paragraphs before the net profit line.

Adjusted depreciation and amortization and provisions with EUR 524 million of adjustments in '25 and EUR 1,500 million in '24, mainly in the Power business, increased by 3% to EUR 5,793 million, driven by a higher asset base despite lower bad debt provisions. Adjusted EBIT reached EUR 9.9 billion and grew 3.1% in line with adjusted EBITDA.

Net financial costs increased by EUR 288 million due to minus EUR 1,863 million, mainly driven by EUR 263 million higher debt-related costs, due to EUR 6.2 billion higher average net debt, with an impact of EUR 357 million, while interest-related costs and FX improved by EUR 94 million due to FX depreciation, especially of the real and the dollar. Derivatives had a positive contribution of EUR 164 million, mainly due to the East Anglia THREE derivative contribution, while the rest had a negative impact, mainly due to the Mexico hedges compensated at the net profit level in the tax line, lower capitalized interest and other items.

Cost of debt improved 6 basis points to 4.75%, mainly thanks to lower short-term interest rates, especially in the euro, despite higher interest rates in Brazil. Excluding the real, cost of debt improved 15 basis points to 3.55%.

'25 net debt, as the Chairman has said, is EUR 1.5 billion lower than the EUR 51.7 billion reported in the '24 year-end, reaching EUR 50.2 billion. This positive evolution was driven by the EUR 12.8 billion FFO generation, plus the EUR 4.6 billion as a result of asset rotation and East Anglia THREE debt deconsolidation and the EUR 5 billion capital increase, more than covering the EUR 12.6 billion CapEx plus the EUR 1.9 billion of Neoenergia PREVI acquisition and the EUR 4.6 billion dividend as well as a EUR 2.2 billion ENW net debt consolidation. As a consequence, our credit ratios are strong for our BBB/Baa1 rating. Our adjusted net debt-to-EBITDA was 3.02x. The FFO adjusted net debt reached 25.5%, and our adjusted leverage ratio was 43.8%, 1.6 percentage points lower than at the end of '24.

Regarding our financing strategy, we delivered a year of unprecedented execution awarded by the IFR magazine as the best issuer in the world in '25. In addition to the capital increase, Iberdrola signed EUR 16.7 billion of new financing under highly competitive conditions in different markets. We placed EUR 4.9 billion in bonds, achieving several milestones. Our first green senior under the EU Green Bond standards and ICMA standards, a nondilutive green convertible with the high savings versus a senior structure ever in Iberdrola. Our lowest coupon among all hybrids issued in the euro market in '25 and the tightest spreads and Neoenergia and NYSEG.

In structured finance, we secured EUR 4.5 billion, driven by the East Anglia THREE project financed by 23 banks and the Danish Export Credit Agency. We also reinforced our liquidity position with EUR 3.8 billion in credit lines, including EUR 2.5 billion sustainable syndicated facility for the holding and Avangrid, which has now become a benchmark in terms of pricing.

In multilateral and development financing, we added EUR 2.5 billion, including green funding from the EIB, supporting next-generation investment and the first green loan granted by the National Wealth Fund to a European company to finance projects in the U.K.

'25 adjusted net profit grew 10% to EUR 6,231 million, while reported net profit rose 12% to EUR 6,285 million. Let me stress again that the net profit would have had exceeded EUR 6.7 billion if '25 capital gains had not been more than applied to adjustments in our Power division.

Now the Chairman will conclude the presentation. Thank you very much.

Thank you, Pepe. To conclude, 2025 was again a year with a strong operational and financial performance. But above all, last year confirmed the transformational impact of our strategic plan based in network infrastructure as a key driver. In 2025, our RAB increased by 12% with attractive returns and visibility, thanks to our presence in countries like United States and U.K. And we expect to continue growing in the coming years, both in distribution due to integration of Electricity North West in the U.K. and increasing investment needs in all geographies and in transmission, mainly in U.K. and U.S. and Australia.

In Power & Customers, our selective approach focusing our core markets and our balanced mix of technologies allow us to install 2.7 new gigawatts in 2025 with 4.7 gigawatt more under construction and 9 gigawatts of projects ready for 2028. In addition, 100% of our energy is already sold for 2026, mainly through long-term PPAs and regulated contracts. And we have continued expanding our unique portfolio of storage, which include hydro pumped facilities in operation capable of delivering up to 10,200 gigawatts per annum and a pipeline of battery and hydro pumped storage projects up to 7,500 gigawatts hour per annum.

In 2025, we have also confirmed our commitment to financial strength with a reduction of EUR 1.5 billion in net debt to EUR 50.2 billion, following an 8% increase in cash flow generation up to EUR 12.8 billion, the execution of our asset rotation and partnership plan and the capital increase of last year. Driven by the expected continuation of these positive trends in 2026 and the impact of new investment today, we are setting an adjusted profit guidance of more than EUR 6.6 billion in 2026. We will mean adding EUR 1 billion to our net profit in just 2 years, and we will put Iberdrola in the best position to exceed our guidance of EUR 7.6 billion for 2028.

But the growth potential of our business model goes far beyond 2028, given the unprecedented investment opportunities created by electrification. In the last years, electricity consumption has been growing faster than infrastructure, accumulating a huge latent demand that today is waiting to be connected. Most countries are responding to this situation by increasing network investment and accelerating planning processes. But consumption is expected to continue increasing strongly in the coming years in heating and cooling, as more heat pumps are installed, transport, as the penetration of electric vehicles continues to accelerate in industry, especially in low temperature processes, creating the need for more installed power and storage facilities.

Generation technologies will be chosen by each country according to 3 main criteria: self-sufficiency, competitiveness and sustainability. Of course, this new production will also require a substantial upgrade in transmission and distribution networks. On top of this, data and artificial intelligence have emerged as the last year as a new demand vector with a very large potential, mainly from technology companies, which are already Iberdrola's largest customers in our key markets, the U.S., U.K. and Continental Europe. This already requires significant upgrades of generation and very especially transmission and distribution assets.

And this virtuous circle of additional power demand and infrastructure is just starting. Today, electricity is only 20% of the global energy demand, and this percentage is expected to grow strongly, boosted by new technological solution and the need for strategic autonomy and competitiveness. In Europe, for example, the commission expect that the share of electricity in total energy consumption will double in the next 10 years and triple by 2050, reaching 60%. And we are in the best position to reaffirm our current global leadership in electricity infrastructure, which has become a new high-growth sector, thanks to the electrification, as we anticipated 25 years ago.

Since then, we have been implementing a consistent strategy based in expansion of networks, selective investment in Power and access to customers through all route to market, including the most sophisticated instrument like multi-country PPAs. The EUR 170 billion invested in the last 25 years have allowed us to multiply our asset base by 8x and expand our geographical footprint to several countries, mainly in the U.S. and the U.K. to become the largest integrated utility in Europe and 1 or 2 largest worldwide by market capitalization, always preserving our commitment to BBB+ rating, thanks to our financial discipline and our ongoing access to market and liquidity.

Our size, diversification and solidity are the best guarantees to secure access to supply chains, technology and the best talent and skills and to maintain our track record of shareholder return more than 1,800% over the last 25 years and sustained growth in results.

Thank you very much for your attention. We can now begin the Q&A session. Thank you.

Thank you, Mr. Galan. The following financial professionals have raised the following questions. First, Rob Pulleyn, Morgan Stanley; Gonzalo Sánchez-Bordona, UBS; Ahmed Farman, Jefferies; Arturo Murua, Jefferies; Pedro Alves, CaixaBank; Pablo Cuadrado, JB Capital Markets; Fernando Garcia, RBC; James Brand, Deutsche Bank; Jorge Alonso, Bernstein Societe Generale; Philippe Ourpatian, ODDO BHF; Dominic Nash, Barclays, Meike Becker, HSBC; Peter Bisztyga, Bank of America; Pierre Ramondenc, AlphaValue; and finally, Skye Landon, Rothschild.

The first question is, can you expand on the main elements driving the increase in net profit?

Net profit, '26 will be another year of growth. I think there are several reasons -- sorry. Sorry, it was off. I said '26 will be another year of clearly growth. The first one is due to the consolidation of Electricity North West and Neoenergia. As you know, we are already in Neoenergia, we expect in the next few weeks, we will have the control, the 100% of the company. The positive acquisition, the minorities is what I mentioned. New distribution frameworks, what we are now -- like the case of U.K., which is the T3 -- RIIO-T3 from April. New interconnections between Canada and Massachusetts, which I mentioned it was EUR 125 million EBITDA contribution per annum. The Brazil, the finalization of transmission project, which can add, as I mentioned before, EUR 250 million additional EBITDA as well the contribution of the 2.7 megawatts -- 2,700 megawatts installed power in 2025. And the partial contribution of this 4.7 gigawatts, which is now under construction and will be completed during the year.

The other one important point, I think we are beating this year the record of hydro reserve in the history of the group. So I can say in this moment, all our dams are 100% almost full. So I think we are on the 95%, which is the reserve margin we have to keep already just for security reason. So that is already provided, more than 9,000 gigawatts of store energy, which will be used in due time. And that can be completed with our capacity of pumping storage, which I mentioned, is another potential, almost 10,000 gigawatt hours per annum, then we can as well potentially produce with it.

Financial expenses, as I mentioned -- it was mentioned by Pepe Sainz, is fully under control. It's a lower debt and our interest rates are mainly fixed or hedged. So that's why I think we are confident that to reach more than EUR 6.6 billion net profit this year. That represent practically, I think when we present last year, our plan, it was a plan to increase by EUR 2 billion in 3 years. So I think between '24 and '28. So I think with that one, we can already secure then half of the time, this EUR 1 billion has already been already increased already. And that's why I think we are comfortable that another EUR 1 billion from '27, '28 as well can be easily be achieved.

Traditionally, always, as I mentioned before, we are over delivering our promises, which I think you see that when we made that one is we are normally comfortable then we can already achieve these numbers.

And related to net debt, I don't know, Pepe, you would like to say something. We are very, very happy with our cash flow generation, which continue increasing. And -- but I think you mention, Pepe, with more detail.

Well, in the net debt, we are expecting to end '26 somewhere between EUR 54 billion and EUR 55 billion, which is below what we had in our plan. And this is basically because we have, as you know, finished this year with lower debt than what we had expected. So lower EUR 1.5 billion at EUR 50.2 billion, this means that we are going to increase a little bit the debt amount as we continue to invest, but below what we had in our plan and that we had in our Capital Markets Day. So as the Chairman has said, the debt under control and the financial expenses also.

Next question is related to the nonrecurring impacts that are affecting the 2025 EBITDA and net profit.

So Pepe, [Foreign Language].

Yes. Well, as you know, well, this year, we had a capital gain mainly by the -- due to the sale of the Smart Meters in the U.K. This is something that we have adjusted. We have taken away another EUR 460 million to more than compensate this EUR 379 million. This EUR 464 million is in the below the EBITDA. But -- so we are stripping EUR 379 million of the EBITDA this year versus EUR 1,700 million last year, mainly due to the Mexican capital gain. This is what makes the fact that in reported terms, the EBITDA is below last year, but not in recurring terms. So these are the 2 main impacts at the EBITDA level.

And at the net profit, so below the EBITDA level, mainly in the EBIT, in the depreciation and amortization in the provision side. This year, we have provisioned EUR 460 million, mainly to some adjustments in the value of our pipeline, mainly in renewables across different geographies, okay, compared to last year, which the adjustment was basically in the onshore, in the U.S., as you recall. This year, it's been in -- basically in -- across different geographies. And last year also in the provision line, we adjusted around EUR 1,500 million in the provision line in '24 to compensate this capital gains that we had in the EBITDA level. So we stripped this provision from the EBIT side.

So to conclude, last year, we stripped EUR 379 million at the EBITDA -- this year, EUR 379 million at the EBITDA level. '24, EUR 1,700 million at the EBITDA level. And this year, we have taken away around EUR 460 million at the EBIT level. And we have also taken away last year also through efficiencies and adjustments, another EUR 1,500 million. And in addition to that, we have 2 other elements, which is basically the fact that this year, we have included the a cap allowance, which compensates what we are taking away, which is the New York recognition of the past costs, okay? So that is basically the main adjustments in our numbers.

Next question is related to the recent regulatory development in both in Spain and the U.K. and how this compared with the assumption included in our strategic plan.

So I think, as I have mentioned, in the case of Spain, we have to manage our business according with the signal that has been given. So signals is that they are already just reducing the money in operation and maintenance. So we have to adapt our operation and maintenance to the new circumstances. They are already just limited the CapEx that they are giving some guidelines where to invest and how much to invest. So we have to adapt to the circumstances. But I think I would like to say that in the case of Spain, it's less than 20% of our RAB. So I think we will adapt to the circumstances in such a way that we will not be affecting our P&L, adapting our expenses, adapting our CapEx to the framework has been defined.

But I think our Networks business is depending much more of other countries. I think in the case of U.K., as I mentioned, only the growth that we are expecting in transmission is absolutely huge. Only in transmission, the regulator has already recognized the need of accelerating our transmission lines, multiplying by 4x the CapEx towards the previous 5 years with a clear, stable, predictable and attractive framework. So I think RIIO-T3 is clearly a transformational things for Scottish Power. So the RAB of transmission in 2030 will be equal, even highly higher than the RAB of distribution. So together, we are going to reach more than EUR 30 billion RAB compared with EUR 9 billion we have in Spain. So I think just to give you the image what that represents. And as well, the return on equity. If return on equity including incentive, higher than 9%.

Similar situation we are facing in other countries like United States, which as well there are pressure for increasing the investment and the situation in Brazil with ANEEL also is already just renewing the license for the next 30 years with a commitment of investing a huge amount of money in the country for electrifying the sectors, which are still in the country, are not electrified. So I think those are the main things.

So I think our business, transmission and distribution business, is a growth vector, which is transmission, either in U.K. in United States, which I think in the case of Britain is going to transform completely, the size of the company, from a company EUR 15 billion RAB to EUR 30 billion RAB. And in the case of United States, a similar thing as well as Brazil.

In Spain, so the situation, we have to follow the signals of regulator. But in any case, our -- the size of our business in Spain is less than 20% of our total, so which I think is not important, what -- it represented for that one. But we will adapt completely -- our deliveries, what has been already been given. The signals given is clear, less investment in operation and maintenance, CapEx already addressed to certain areas and not to another areas. I think we have to follow this instruction. That's it.

Next question is regarding the regulatory framework and negotiation in New York, both -- Maine and how this aligned with the assumption included in our strategic plan.

Pedro, would you reply?

Okay. I think we are always suggesting Chairman on these rate cases to the circumstances. Last year, we focused on recovering storm costs in New York, EUR 800 million and more than EUR 300 million of storm costs as well in Maine. That was the focus. I think this year, because of circumstances, we believe it's the right thing to do, interim rates and 1-year rate case in Maine. The interim rates will be applied in July, and then we will request for a 1-year rate case. After that, we'll go into a multiyear rate case. And in the case of New York, we still have the current rate plan, which will be in the mid of the year, and we're already working in a 1-year rate case. And after that, we will file also a multiyear rate case.

Next is, could you provide an update on the status of Vineyard Wind 1 project and its recent progress?

So I think it's -- I would summarize in 2 words. For me, as engineer, the farm is already completed. In this moment, we have more than 60 turbines of the 62, which are fully installed. I think there are more than 55, I think, in operation exporting electricity. So I think these numbers means the level of availability is similar for other offshore wind farm we have in operation. So for me, that is completed.

Nevertheless, Pedro, you would like to add any detail. But for me, the sentence, that is fully completed. That's it.

Yes. I think you're totally right, Chairman. I think we have 60 of 62 rotors installed. That's 97%. Probably in the next days, we will install the 2 remaining ones. And I think from an operation point of view, 52 of the 62, that's almost 85% of them, are right now allowed for operation.

Next is, how is your customer base evolving in Spain, particularly in terms of channel level, customer retention and portfolio quality?

Pedro?

Okay. I think it's important to know that we are the market leader. We are the leader in energy supply. We are the leader in number of customers and also the leader in churn rate. So it's normal that we have some rotation in those customers. I think we continue to be successfully measuring -- taking actions to retain our best customers. And right now, we feel that even that margin per customer is right now growing from an energy point of view.

So I would like to insist in one more word. I think we are lead in number of customers and -- but the level of loyalty of our customer is huge. We have the record. We are the best in churn rates in the country as well. So I think it's normal, when you are already the largest number of customers, then you lose someone else. But important is the level of loyalty of the existing one.

So the percentage of rotation, customer rotation in our case is much lower than the rest, especially those newcomers. The newcomers is the rate case -- the churn rates are absolutely huge, so -- which I think as well is normal in other countries. When you go as a country initially, I think the number of -- you win customer, but you lose customers. The important thing is the loyalty of our customer is huge. I think that I would like to mention this message.

Next, could you provide an update on your view regarding the role of nuclear generation in Spain and the status of the Almaraz extension process?

So I don't know how many times I repeat it as engineer, what is my vision. So our -- the nuclear power plant are necessary, are safe, are efficient and contributed to lower prices in all countries. So I think that is a reality. In the case of Spain, we have -- we suffer a huge taxation, which I think has reached almost EUR 30 or EUR 35 per megawatt hour, which is 3x, 4x more than other neighbor countries. But the power plant itself, I insist, are necessary, safe and efficient, and they are already generating lower prices.

I think that is like that today, some of the nuclear power plant are being called to operate under restriction because they are cheaper than gas plant. So I think that is the reality we are facing today. In fact, today, European countries with no nuclear have structurally higher prices, Italy and Germany around EUR 20 more than France or Spain. So I think that is the big debate in Europe. So those countries what we have already keeping our nuclear power plant, and we have already invested in another renewable technologies, we have lower prices than those who have not already, either not built or either has already closed, the nuclear power plant, and they are fully dependent on the import of fossil fuels, which I think that makes that the cost is automatically higher.

So that's why, for this reason, we have already asked the extension of Almaraz, and we will as the extension of others in the future, I imagine. And I think this process is ongoing. So I think it's Nuclear Security Council is analyzing. So -- but I think I'm not seeing that -- we have already delivered all the paper requested. And I think the fact is this power plant, most power plants, similar to that one, are already extension life up to 60, even 80 years, which I think will have not much sense. And here, we will not already use this asset, which, I insist, are necessary, safe, efficient and contribute to lower prices.

Next is related to the status of the Neoenergia minorities acquisition deal.

Sorry?

Sovereign Energy, the process of deal.

Well, I think that the process is going on. I think it's a question of weeks. So I think we have not any -- all they are progressing well, by step by step. And I think I feel Pepe in April will be closed later. So I think it's going according to schedule.

Next is, how will recur U.S. network investment affect customer affordability? And are European regulators becoming more focused on this issue as well, especially Italy with the new measure adopted?

So as I mentioned in my presentation, today, we have a significant latent demand unattended due to lack of infrastructure. So I think that is a fact in all countries. The fact European Commission has already made directive recommending higher investment in networks, in infrastructures. So -- and I think this lack of infrastructure of transmission and distribution is causing losses in curtailments, and that is generating extra cost to many countries. So that's why higher investment in network will allow to solve those curtailments.

I think in the case of U.K., if I don't remember that the curtailments amount something like GBP 5 billion per annum just because there are certain electricity, in some part of the country, cannot be exported, in another part of the country and this part of the country have to use more expensive sources of energy toward another one, are already not being able to be exported. So this more investment solve this problem of curtailments. That can incorporate an additional demand. We now is latent, we cannot be supplied. And they will dilute it. This extra demand will dilute the cost and the impact of this infrastructure cost, resulting, again, the lower cost per kilowatt hour. So that is better surplus.

If we are not making the infrastructure, we have to pay higher cost of electricity that -- if we have this infrastructure, we can benefit, we can enjoy a lower cost of electricity, and we will consume more electricity, we will dilute the cost of this extra infrastructure. So the British regulator has understood very well, and that's why they are already introducing incentives for accelerating the construction of new infrastructures precisely for diminishing the curtailments that the British are paying at present.

And in generation, I think my position in your chart also clearly, each country have to look for how to use their own indigenous energy to become more autonomous, to have -- to become -- to use more autonomy in their energy, to avoid problems that we've been experiencing in the past, to the import of certain energies from other countries. I think we've been suffering the problems of shortage of gas 2 years ago because the lack of supply from Russia. So now -- but in any case, this cost of gas imported with liquefied always will be more -- will be less competitive than those who have the gas door-to-door to the power plant. So that's why each country have to look what is the alternative.

In the case of Europe, the European Commission is clearly defining what they would like. They would like more autonomous energy base in renewables, onshore, offshore, solar, more nuclear, extension of the existing one or potentially new one, which is the case of France. France just published their policy. They are relying in more nuclear and more offshore. And I think Britain is already same thing as well. And that is the point, is the point is networks for supplying the demand which today cannot be supplied. These networks can really diminish the cost per kilowatt hour because they will dilute it, with more demand diluted, the cost of the new infrastructure. And the power will be depending on the countries and depending on the source in each country. If the country has one type of sources of energy that the energy will have to be used with the basis of competitiveness, sustainability and self-sufficiency in the country.

Next is, could you update on your U.S. renewable pipeline? Is repowering still an opportunity in the U.S.?

It is. But, Pedro, you can already explain in more detail.

I think in the U.S., we have 11,000 megawatts in operation. And we are right now building around in construction 600 megawatts, out of which 445 are repowering. I think because of the customer demand to continue to increase, we are also looking into extension of life between 15 and 20 years with very moderate investments and attractive business cases. I think on top of this, we have more than 4,000 megawatts of pipeline. We don't have any new projects in the projections we gave in the Capital Markets Day because we prefer to actually do things and there will be an upside every time we decide to do new projects.

Next is something related to the previous question, but could you provide your view on the recent regulatory intervention in Italy power market? And do you foresee similar measures in Spain?

So Italy, as I mentioned before, I was explaining clearly, they have higher prices than other European countries due to their past energy policy decisions that they already make -- they increase their dependence of gas imports. I think that is clear. Same then Germany, is facing higher prices in Europe, there, due of decision -- political decision taken in the past of that one. I think this case is very different for other countries that we have renewable and nuclear driving structural lower cost. That is the case of France, that is the case of Spain.

I think in line with the conclusion reached in the European Commission 3 years ago and related to the market design, we continue thinking the long-term contracting, mainly in PPAs, are the solution to avoid volatile and high power prices for European consumers. So I think the fact those countries who have already more long-term contract are those countries are part of the mix of power generation. Other countries, we have already more stable and predictable prices.

So I think Europe needs to become more and more energy independent. So we cannot rely in sources which are not already in our hands. So that's why any market intervention will not help to attract the necessary investment to attend this growing electricity demand. So we have to be very careful with all these measures. We have to be very careful with the taxation. We have to be very careful in the fact that taxation, European Commission is recommending as well reduction, a substantial reduction in taxes to electricity for increasing competitiveness because that is the best way to increase the competitiveness of European. If we compare the taxes of Europe with the Americans with the Chinese -- or the Chinese, in some cases, it's 5x more, the European toward the Americans or the Chinese.

So I think it's not a question of looking for more reforms. It's a question of looking what is the problem. The problem in Europe is taxation, and energy policies has not been in some countries making the right direction. If we are keeping already the nuclear power plant, if we increase our investment already in autonomous energies, which in the case of Europe, certain is renewable onshore, offshore solar, hydro, we make more storage. So certain, we can be already as competitive as others. And that is what they are making in countries like China, which are investing heavily already in autonomous energies, mainly renewable hydroelectric and nuclear as well for keeping already a much competitive mix of power generation.

Next is, could you update on your activity with data center clients, particularly regarding PPAs and expected demand growth?

So I think PPAs with technology company is not new for us. I think we have PPAs with the largest users of data centers. We have already in this moment, more than 150 gigawatt hour of new PPAs signed. And only last year, we signed 1 terawatt hour more, and we have already 12 terawatt hours per annum, already the energy supply to these companies. I think I insist on that one many times. I think there are people who have been dreaming to become data centers builders.

We are already data center facilitators. So we try to facilitate the installation of data centers because data center is a large consumer of electricity and our business is to sell electricity. That's why we are doing our best for helping those who would like to install new data centers through providing land or providing connection or providing these PPAs, whatever. So I think it's -- data centers is not only a question of power, it's a question as well of connection. It's a question of networks. More networks are needed as much power is needed. But I think if I have to, say, prioritize, networks is the first bottleneck in this moment more than power itself in some of the countries where we are present actually.

Last question is related to the guidance given to the 2028 and is, please, can you elaborate why 2028 guidance has moved from around EUR 7.6 billion to higher than EUR 7.6 billion?

So I think we have increased our net profit EUR 1 billion in the last 2 years. And we expect to at least to increase another EUR 1 billion more in the next 2 years. Investment and asset rotation is ahead of schedule. So I think the RAB is up by 12%. We have more than 7,000 megawatts, new megawatts in construction -- in operation in this moment. We have 9,000 megawatts in pipeline ready for 2028. We are seeing the acceleration of electrification. I was insisting and insist again and again, we need investment opportunities in transmission and distribution. Clearly, that is a clear example in T3 in U.K. We have for the incentive for acceleration. We have increased our return on equity by 100 basis points if we go ahead of schedule. So I think it's incentive for being faster. On top of this, we have already better expectation for 2030 and beyond with new opportunities in transmission in countries like Australia.

So I think all in all, we are keeping our plan and delivering focus in networks, being selective in renewables and in Power, as Pedro mentioned, in the United States, there are opportunities that we are making, but we can make more, the demand. There are other countries, but we are possibilities in making more things. But we don't like to make dreams. As you remember, we put name by name, power plant by power plant how -- which one we are going to build per annum. So it's not saying, "We are going to make 9,000." No. "We are going to make this 9,000 in this country, in this period, in this thing."

So we have already -- in the case of United States that Pedro mentioned, we have -- for repowering, we are 11,000 megawatts already in operation, with more than half can be repowered. But we will -- but in the moment we have one by one, which one we are going to be repower, we will let you know. But I think we are working with that one case by case because the time is -- it moves faster. Nevertheless, I think we have already our financial strength. We are committed with it. We took all the necessary steps for keeping already our financial solidity. And I think it's -- and that's why we feel we have a unique value proposition in the sector.

So I mentioned in my speech something that we are from Bilbao. So I think it's -- although the people from Bilbao, we have the reputation of being a little exaggerated sometimes, in our case, after 125 history and 25 years of myself leading the group, we have already taken, I feel, the best of the country of us. The ambition to achieve better and higher results and the pride of, also typical from Bilbao, of overdelivering. And that is our track record.

Our track record is an ambitious plan and overdelivering result. This is a result of the plan '22 to '25, what we just finished with our plan, and that is going to be, again, our plan for 2028. Compared with others, who has not proven this ambition and has not proven this delivery.

Well, after this Bilbao answer, I will now hand the floor over to Mr. Galan again to close this event.

So thank you very much to all of you for participating in this conference call. And I think if there are any questions, our Investor Relations will be available for any additional information you may require.

Thank you, and thank you very much. See you soon. Thank you.

Good morning, ladies and gentlemen. First of all, we would like to offer a warm welcome to all of you who have joined us today for our 2025 9 months results presentation.

As usual, we will follow the traditional format given in our events. We are going to begin with an overview of the results and the main developments during the period. Everything given by the top executive team that is today with us: Mr. Ignacio Galan, Executive Chairman; Mr. Pedro Azagra, CEO; and finally, Mr. Pepe Sainz, CFO.

Following this, we'll move on to the Q&A session. I would also like to highlight that we are only going to take questions submitted via the web. So, please ask your question only through our web page, www.iberdrola.com.

Finally, we expect that our event will not last more than 60 minutes. If any questions remain unanswered, we at IR team are, as always, fully at your disposal. Hoping that this presentation will be useful and informative for all of you.

Now without further ado, I would like to give the floor to Mr. Ignacio Galan. Thank you very much, again. Please, Mr. Galan.

Good morning, everyone, and thank you very much for joining today's conference call.

In the first 9 months 2025, our reported net profit reached EUR 5,307 million, leading up a 17% increase in adjusted net profit, including capital gain from asset rotation -- excluding capital gain from asset rotation. This growth was driven by robust operating performance with reported EBITDA reaching EUR 12,438 million, mainly in our Networks business, where EBITDA rose by 26%. Thanks to a higher rate base driven by investment and improvement regulatory frameworks.

EBITDA from Renewables & Customers was impacted by lower market price and higher ancillary service costs in Iberia due to changes in the digital operation after the blackout, which we are gradually passing through, partially offset by the contribution from additional renewable capacity.

Investment reached a new record of EUR 9 billion in just 9 months, reflecting the execution of our plan. Networks investment increased by 12% for a total regulated asset base of close to EUR 50 billion. And we have added 2,000 megawatts of new capacity in the last 12 months.

Driven by additional investment, operating cash flow increased by 10% to EUR 9,752 million, which combines with EUR 8 billion of new asset rotation and partnership and the capital increase of last July has allowed us to reduce the consolidated net debt by EUR 3.2 billion to EUR 48.5 billion, substantially improving our ratios in line with our BBB+ rating.

The strong operating performance and the ongoing improvement in our financial position have led us to increase interim shareholder remuneration by 8.2% to EUR 0.25 per share.

Reported EBITDA reached EUR 12,438 million, driven by a strong performance of our networks business, up 26% in the first 9 months, supported by higher regulated asset base in all countries, especially in the United Kingdom and Brazil and positive rate adjustment mainly in the United States and Brazil as well.

As mentioned, EBITDA in Renewable Power & Customers was affected by the one-off impact in the change of system operation applied by Red Electrica in recent months as more synchronous generation has been introduced, which is impacting our retail business in the short term until these costs are passed through.

In addition, we saw lower market price and a lower contribution from Mexico after the last year transaction. All these impacts were partially offset by additional renewable capacity. Networks once again -- that is once again a main contributor of our EBITDA, driven by the continued growth in our U.S. and U.K., which increased their combined share by 12 points, reaching 43% of the total EBITDA, reflecting the 13% increase in investment made in both countries, which together represents 60% of the group total as of September.

As a result, total investment reached a new record of EUR 9 billion, up 4% year-on-year. By business and area, 60% of investment were allocated to Networks, where we invested EUR 4,904 million with a 12% increase year-on-year.

Networks investment increased by 45% in United Kingdom to EUR 1,524 million, driven by the integration of ENW and 18% increase in investment in the Scottish Power Transmission and Distribution. Investment in United States reached EUR 1,739 million, in line with the last year as the 9% increase in distribution was offset by decrease in transmission investment due to the gradual completion of NECEC. Additionally, we invested EUR 1,215 million in Brazil, up 14% and EUR 426 million in distribution in Spain, 60% more than last year.

As a result, our regulated asset base grew by 12% on year-on-year to EUR 49.3 billion. Investment in Renewables reached EUR 3,442 million, well diversified across geographies and technologies. 60% was allocated in United Kingdom and United States, with U.K. investment increasing by more than 45%, mainly linked to our offshore wind farms currently under construction.

East Anglia THREE with 1,400 megawatts of capacity and East Anglia TWO with 900 megawatts. Our Offshore wind farms under construction in other countries are also making good progress with more than 50% of Vineyard Wind 1, 806 megawatts already in operation in the United States and the 315 of the Windanker wind farm in the Great Baltic -- in the German Baltic Sea advancing as scheduled.

Investment in Onshore Renewables reached EUR 1,904 million with 62% in onshore wind. And we invested more than EUR 300 million in storage, including both pumped hydro in Iberia and batteries mainly in Australia.

Moving to Network business performance. Regulatory framework continued to evolve positively across key geographies. In United Kingdom, the RIIO-ED3 methodology for distribution was published, representing a first step in a process that will lead to a new framework by April 2028. And in transmission, the RIIO-T3 Draft Determination was released, as you know, and we have expected final determination by -- before the year-end.

In United States, current rate cases have resulted in a 10% average increase in tariff in New York and Maine, compared to last year. And Avangrid is already in the process of new rate cases in both the states they agree effective from May 2026.

As mentioned, NECEC, our interconnection project between Canada and Massachusetts is on track to reach full commercial operation before year-end. And we are already working on projects that will continue delivering growth in transmission, mainly the Powering New York will result in EUR 1,650 million of planned investment in the coming years.

In Brazil, following the annual update in Neoenergia Brasilia, rate has increased an average of 8% compared with last year. And the renewal of distribution concessions continued to progress. The concession Neoenergia Pernambuco was already signed, and we expect the other distribution companies to follow in the coming months.

In Transmission, Neoenergia is on track to complete the last four lots under construction by December 2025, increasing annual remuneration in this business by BRL 600 million to more than BRL 2 billion per annum.

Finally, in Spain, the process of the review of the remuneration methodology and the rate of return continue.

Moving to Renewables. In the last 12 months, we have installed over 2,000 megawatts with significant progress in offshore wind. In United Kingdom, production of our Offshore wind farms in operation, West of Duddon Sands and East Anglia ONE exceed 2,400 gigawatt hours in the first 9 months of 2025. And we continue progressing the construction of East Anglia THREE with 20 monopiles already installed. In East Anglia TWO, where preliminary works are underway after having signed all major procurement contracts. On top of this, our East Anglia ONE North project with 900 megawatts was qualified for the upcoming AR7 auction scheduled by mid-November.

In the United States, the construction of Vineyard Wind 1 is now above 50% completion with 32 turbines fully installed and more than 200 gigawatt hours produced.

Finally, in France, St. Brieuc project produced 1,150 gigawatt hours during this period. And the output of our offshore wind farm in operation in German Baltic Sea reached 1,594 gigawatt hours as well.

As mentioned, in Germany, we have another project under construction, Windanker, which is moving ahead as planned for commercial operation in 2026.

Over the last 12 months, we have also installed 1,350 megawatts of Onshore technologies well spread across our geographies, 1/3 United States and U.K., including 200 megawatts of repowering project. Around 1/3 in Spain and the remaining 1/3 in another European countries and Australia.

Finally, in Storage, we continue progressing with our pumped hydro project under construction in Iberia, including Torrejón Valdecañas with 15 gigawatt hours capacity. And in Australia, the Smithfield battery project is already in operation. The Broadsound project is progressing as planned for the total of 490 megawatt hours of storage capacity.

All in all, we have currently close to 5,500 megawatts under construction, of which more than half correspond to Offshore wind project and 25% to Onshore wind. And we are very well positioned to capture additional growth if demand accelerates due to the electrification, thanks to a strong pipeline of 4.5 gigawatts of advanced projects ready to start construction by 2028, including Repowering project mainly in United States.

Through September, we have also continued improving our financial strength. Thanks to a 10% increase in our operating cash flow to EUR 9,752 million, driven by higher cash generation in Networks and the execution as well of our asset rotation and partnership plan.

Since January, we have signed transactions worth EUR 8 billion with a positive impact of EUR 4.5 billion in our net debt as of September. On asset rotation, as you know, we have already received close to EUR 1.1 billion from the sale of our Smart Meters business in United Kingdom. We have signed other transactions like the sale of our Renewable business in Hungary, which will allow us to collect EUR 128 million before the year-end. Finally, the regulatory approval required for the sale of our Mexican business continue on track.

Regarding Partnership, we have added 708 megawatts to our joint venture with Norges Bank for Renewables in Iberia, reaching 900 megawatts in operation, fully on track to reach 2,300 by 2027 with a total co-investment of EUR 2.4 billion. Our partnership with Kansai in the Windanker Offshore wind farm in Germany will represent a total co-investment of EUR 1.3 billion. And our partnership with Masdar for Offshore wind in the U.K. and Germany, which will result in co-investment of EUR 6.8 billion is also progressing well.

With the construction of East Anglia THREE moving forward in line with our plan as explained and in Baltic Eagle in Germany already energized. Increasing cash generation and the execution of our asset rotation and partnership plan, together with the capital increase executed last July has led to a reduction of EUR 3.2 billion in adjusted net debt year-to-date to EUR 48.5 billion, driving even better stronger financial ratios fully aligned with our BBB+ credit rating.

FFO to adjusted net debt increased by 330 basis points to 26.2% and net debt is already less than 3x EBITDA. We also maintained a strong liquidity position of EUR 23 billion, sufficient to cover 25 months of financial needs.

Thanks to our strong business performance and improving financial strength, the Board has approved an 8.2% increase in interim dividend of EUR 0.25 per share will be paid at the beginning of this year. As always, a supplementary dividend will be proposed for approval at the Annual Shareholders' Meeting paid in July.

I will now hand it over to our CFO, who will present the group financial result in further detail. Thank you.

Thank you, Chairman. Good morning to everybody. Our adjusted net income for the first 9 months of the year, excluding the sale of the U.K. Smart Meters accounted for in this quarter, which is the capital gain is EUR 381 million gross and the same number net as we don't have a tax impact here and including the cap allowance in 2025, which is EUR 191 million, reached EUR 5,116 million, representing a 16.6% increase compared to the adjusted net income for the first 9 months of '24, excluding the divestment of the thermal generation assets, which impacted the net profit was EUR 1,165 million net and including the U.K. cap allowance for '24, which is EUR 81 million, as you can see in the slide.

Excluding also the recognition of costs in the U.S. for EUR 389 million as it is a non-cash item, the first 9 months of '25 growth is 8%, reaching EUR 4,727 million. The main perimeter change, as you know, is that ENW has been fully consolidated since March. The FX evolution has had a minor effect on results. Thanks of our hedging policy with the dollar 2.5% lower and the real 10% lower.

Reported net profit for the first 9 months of '25 reached EUR 5,307 million, decreasing by 3% year-on-year, affected by the asset rotation that I have just mentioned that has been EUR 784 million less in '25 than in '24.

Revenues increased by 2.3%, driven by the Network business. Procurements rose 2.6% and gross margin grew 2%, reaching EUR 18.4 billion. Excluding the capital gains from the asset rotation, as I mentioned previously, which is referring to the Smart Meter divestment and the thermal generation assets, 9 months net operating expenses improved 7%, affected by lower storm costs that also lowers the gross margin.

Net personnel expenses rose 0.4% due to higher number of employees. External services declined 6.1%, mainly due to the EUR 330 million lower storm costs. Other operating income increased by 21% compared to the adjusted 9 months of '24 due to the indemnities of past year costs, the ENW consolidation, partially offset by EUR 121 million negative impact of the East of Anglia THREE sale, EUR 4 million more than in the first half results due to a negative impact accounted in Q3.

As you will see later, this impact is more than offset at the financial expenses level. Excluding the mentioned storm-related impacts and other adjustments, net operating expenses improved by 0.8%.

Analyzing the results of the different businesses and starting by Networks, its EBITDA grew 26% to EUR 6,128 million, mainly driven by the strong performance of the U.K. and the U.S. linked to higher asset base and past cost recognition.

In the U.S., EBITDA reached $2,046 million, 88% more with a 10% average higher rates in Distribution and a better contribution from Transmission, and positively affected in the first quarter by the decision of the New York regulator that allowed to register a regulatory asset under IFRS regarding past costs, which have already been accrued and recorded under U.S. GAAP, aligning both standards.

It is worth highlighting, as the Chairman has mentioned, that NECEC finally is expected to start contributing from November of this year.

In the U.K., EBITDA increased 22.5%, reaching GBP 1,129 million, including 7 months positive ENW contribution of GBP 253 million with a growing -- with growing results for transmissions driven by a higher RAV.

In Brazil, EBITDA was up 12.6% to BRL 10,000 million. Thanks to the higher revenues in Distribution linked to higher inflation and an average 8% increase in rate reviews over a higher asset base. In addition, Transmission contributed positively with BRL 1.3 billion gross margin as construction progresses. And as the Chairman has said, it is expected to finalize all the construction of transmission lines this quarter and will contribute BRL 2 billion in '26, already fully completed.

In Spain, EBITDA increased by 9.3%, reaching EUR 1,340 million, positively affected by the CNMC draft retribution rate of 6.46% versus the previous 5.58% and by positive adjustments to past year's remuneration.

In this first 9 months, Energy Production and Customer business, EBITDA reached EUR 5.9 billion versus the EUR 6.7 billion in last year, excluding capital gains from asset rotation. The business reached c. 86% emission-free generation.

In Iberia, EBITDA was EUR 3,052 million, 17.5% down with higher production more than compensated by lower margin and sales, explaining 30% of the year-on-year variation and higher ancillary services, higher levies and positive court rulings in '24 despite 1.2% revenue tax termination explained the remaining 70% of the decrease. Hydro reserves remain above the 10-year average.

In the U.S., EBITDA remained flat reaching $813 million, supported by improved wind and solar performance, despite the fact that '24 was positively impacted by an Arctic Blast storm one-off of $34 million.

In the U.K., EBITDA grew 5.3% to GBP 1,136 million, driven by the GBP 324 million capital gain from the U.K. Smart Meters divestment in this quarter. Excluding them, the business decreased 24.8% with lower wind resource and prices and weaker supply business, also driven by lower prices and volumes. Net operating expenses, including GBP 103 million negative one-off impact linked to the East of Anglia THREE sale more than compensated at the net financial result, as I have mentioned.

In the Rest of the World, EBITDA grew 31.5% to EUR 588 million, with 61% higher offshore production due to higher contribution from wind farms, St. Brieuc in France and Baltic Eagle in Germany. With lower supply results due to the EUR 30 million negative impact in Portugal due to the ancillary services cost as in Spain as a consequence of the blackout.

In Brazil, EBITDA fell 23.6% to BRL 947 million with lower renewable and thermal production compared to last year.

Finally, in Mexico, EBITDA reached $467 million, decreasing 78.5% with lower reported contribution compared to last year that included the thermal asset capital gain.

Depreciation and amortization and provisions were up 2% to EUR 4,272 million, driven by higher asset base despite the full year '24 adjustments impact and lower bad debt provisions, mainly in Spain. EBIT reached EUR 8.2 billion and grew 6%, excluding capital gains.

Net financial results worsened EUR 93 million to EUR 1,445 million, driven by EUR 208 million higher debt-related costs due to EUR 7 billion higher average net debt -- average net debt in the first 9 months of the year, while interest rate related costs and FX improved by EUR 85 million due to the FX depreciation, especially of the real.

And derivatives had a positive contribution of EUR 234 million due to the East of Anglia THREE derivatives, as I mentioned, compensate the lower net operating expenses. While the rest has had a negative impact mainly due to the Mexico hedges, mainly linked to the positive impact of the Mexico transaction last year compensated at the net profit level in the tax line.

Cost of the debt improved 12 basis points, mainly thanks to lower short-term interest rates in euros and British pounds and to the depreciation, especially of the real, despite higher interest rates in Brazil.

At the end of September, net debt is EUR 3.2 billion lower than the EUR 51.7 billion reported in '24 year-end, reaching EUR 48.5 billion. This positive evolution was driven by EUR 9.8 billion FFO generation, plus EUR 4.5 billion asset rotation and debt consolidation and the EUR 5 billion capital increase, more than covering the EUR 9 billion CapEx and the EUR 4.1 billion dividend as well as EUR 2.2 billion ENW net debt consolidation.

As a consequence, our credit ratios are at very strong level in the BBB+ band. Our adjusted net debt-to-EBITDA is below 3x. The FFO adjusted net debt reached 26.2% and our adjusted leverage ratio is 43.3%, 2 percentage points lower than at the end of '24.

9 months '25 adjusted net profit grew 17% to EUR 5,116 million, taking away also U.S. cost recognition, which is a non-cash item, as I commented, the growth is 8%.

And now the Chairman will conclude the presentation. Thank you.

Thank you, Pepe. The result reflect the foundation of the plan presented a few weeks ago, a transformational plan based on a specific project capable of delivering double-digit growth in profit in the first 9 months of the year. Thanks to the rise in Networks investment up to 12% through September with attractive regulatory framework that are driving increases in tariff of 10% in the U.S. and 8% in Brazil as well as the expansion of our generation capacity of 2,000 megawatts just in the last 12 months with 5,500 more under construction and 8,500 of additional pipeline ready to cover any potential acceleration of demand growth.

The implementation of our plan also reinforced our strong financial position, fully compatible with our BBB+ rating, supported by 10% increase in operating cash flow in our asset rotation and partnership plan and is also delivering a growth shareholder return with an interim dividend up 8.2% to EUR 0.25 per share. Driving by this consistent trend of improvement result and financial performance, today, we are improving our guidance for 2025 to a double-digit growth in adjusted net profit, reaching EUR 6.6 billion or more than EUR 6.2 billion even excluded EUR 389 million of Networks cost recognition in United States.

This net profit guidance is already EUR 1 billion above the net profit target set for 2026 in our previous plan. Proving once again that our strategy, focus on Networks in the right countries with attractive remuneration frameworks and selective growth in renewables is allowing us to grow and beat our estimate constantly. You can be sure that we will continue working towards that objective.

Thank you very much for your attention. Now we can begin with the Q&A session. Thank you.

The following financial professionals have asked the following question to us. Philippe Ourpatian, ODDO; Fernando Lafuente, Alantra; Meike Becker, HSBC; Manuel Palomo, BNP Paribas; Pedro Alves, CaixaBank; Gonzalo Sánchez-Bordona, UBS; Robert Pulleyn, Morgan Stanley; Fernando Garcia, Royal Bank of Canada; Peter Bisztyga, Bank of America; Pablo Cuadrado, JB Capital Markets; Jorge Alonso, Bernstein Societe Generale; Javier Suarez, Mediobanca; Dominic Nash, Barclays; Javier Garrido, JPMorgan; and finally, James Brand, Deutsche Bank.

The first one is, can you provide more details on the main factors driving the expected double-digit growth in net profit for 2025 and clarify how the exclusion of capital gains from asset rotations and the inclusion of cap allowances in the U.K. impact this guidance?

So as I mentioned, we expect double-digit growth on adjusted net profit to more than EUR 6.2 billion, even excluding past cost recognition in New York, which is EUR 389 million. And look together close to EUR 6.6 billion. Pepe, but I don't know if you would like to clarify in more detail.

Yes. Well, thank you, Chairman. Well, as I commented, these numbers exclude specifically the capital gains from -- basically in Mexico with an impact of EUR 1,165 million and the Smart Meters in the U.K. with EUR 381 million, both at the net profit level, okay? And it includes as we presented in the Capital Markets Day, the cap allowances in the U.K., as you can see in the slide, EUR 190 million for '25 and EUR 81 million in '24. Obviously, for the end of the year, that will add a little bit more, okay?

Okay. Second question, can you please provide guidance for net debt at 12 months 2025?

Yes. We're expecting the net debt by the year-end to be around EUR 51 billion. This is excluding the potential collection of the Mexico divestment. We are not including that in this guidance. But we are including the acquisition of the previous sale of the Neo stake in this EUR 51 billion guidance. This will be even with all these things below the '24 close of over EUR 51 billion at the end of '24.

Next is regarding the use of capital gains. How will the capital gains from recent asset transaction be used in the future?

So capital gain, as you know, from asset transaction will be applied as always to future efficiencies, just to improve the future results.

Next is regarding the battery storage, our view of this success -- of this upcoming business for the sector?

Well, I think now we talk about batteries. We will start talking about storage 25 years ago. I think as you remember, my first presentation, we were talking about renewables. We are talking about networks and we are talking about storage. I think we've been making renewable, we are making networks and we have been making storage. So, I think, what we've been doing in storage during the 25 years is we've been upgrading our hydroelectric facilities, making our -- most of our turbine reversible to become all those one bidirectional, making already pumping storage plant.

We have in this moment a capacity of 120,000 megawatt hours of capacity. I think, it's a huge capacity already in storage. But also, we are investing in batteries, especially where we don't have hydro facilities in our -- or we are not project. I think, the main places is Australia. I think, they have attractive spread of support mechanism. And I think, we have in this moment, there are more than 550 megawatts under construction. But as well, we have another country. I think, we have 200 megawatts in construction in Spain and the U.K. And we have already more than 1,000 megawatts of projects in our pipeline that will be built up depending on the capacity payment of grants that can be provided.

Next question is regarding the data center. What is the company's strategy regarding the growing demand from data centers? And what recent agreements have been signed with technological companies to supply energy?

So as you know, data centers will be an important driver of demand growth. And I think -- and that is not new for us. We have already, for many years, we've been signing PPAs with tech companies. In this moment, we have more than 12 terawatt hours a year so far of contracts of PPAs already signed with technical companies, mainly in United States. But I think, because we consider that, that is an important area of demand growth is why we are facilitating the expansion of data centers in those countries, we have already, means for helping the technical companies to invest and to expand.

I think, in this particular moment, we have an agreement in Spain with Echelon. And the first project, which is going to make a demand -- energy demand more than 1 terawatt hour a year is already ongoing. And we have another four projects progressing. So, we are active on those one, because we consider that, that is a driver for increase of the electricity demand, and that's why it is -- we would like to help these companies to do the necessary for making that happen.

Next one is regarding the market situation of the United States. Given the recent increase in demand from data centers and industry and the rising energy prices in certain U.S. states, is the company considering increasing its renewable ambition or pipeline?

And the second question regarding to this is, how will these market trends impact your PPA strategy and asset development plans?

So, I think you will respond, Pedro, but I think just to give you -- it's true that in this moment, United States, the prices are rising. And our expectation is that prices will rise even more. I think, it's the fact that new CCGTs are built. This new CCGT is built, is going to make then the prices will increase, because there are already new power plant have to be already amortized toward those one which are already fully amortized. And I think, those one is pushing the prices up independent of the cost of the gas.

But I think it's -- and that is a good opportunity for us. I think, it's a good opportunity, because we have almost 40%, 30% of our fleet is in merchant. And I think, the contract we have already with long-term PPA signed is already, let's say, ending during a certain period. And I think that makes the renovation of this contract probably that is going to increase the prices, we are already making that.

All-in-all, that is certainly a great opportunity of increase of value of our assets -- renewable asset in United States. And that is why United States is there a tremendous, let's say, demand of buying existing renewable asset in operation. So, which I think, Pedro, you can already complete this comment. You agree.

Okay. Thank you, Chairman. I think, the example -- a couple of examples, Texas and Oregon, where the prices are already rising, and we operate already 3,400 megawatts in those states. In the short term, this benefits our merchant assets. And then, it will be translated as the Chairman said, to the PPAs.

And for example, in those states, we have more than 4,000 megawatts of potential pipeline to come. In the U.S., overall, we have 10,000 megawatts right now in operation, 30% of that is merchant and 70% is PPAs. The average PPA life is 10.7 years. I think, there is an opportunity for life extension and repowering. Around 360 megawatts under construction in the U.S., 432 globally and more than 800 megawatts of additional pipeline, 1,500 globally. So, I think this is good signs of what we can do right now to benefit from the demand increase.

Next is related to Spain. Can you provide an update on the blackout investigation and the causes that triggered the event?

I think, during the last weeks, has already had a lot of public reports, a lot of investigation even in the Senate and the different conference. And I think, this public report said clearly that this was a result of lack of synchronous energy to provide inertia in the system. So, they say also, as more renewable enter into the system, supply becomes also variable. And I think that require more synchronous energy.

So, the fact now the system operator has changed the operation and is operating with more synchronous energy. So, I think what is saying in the public report and the public information is precisely what now is the system operator is already just doing. Certainly, that has an effect that is increasing the cost of ancillary services, which in our case, that we have most of our sales are under multi-annual contracts is affecting to our results, because we have not passed this extraordinary extra cost for our customers on all those ones, we have a multiyear contract. As Pepe mentioned, that in our case, is close to EUR 180 million affecting our accounts up to September.

Next is related to Spain as well. What is needed to extend the operation of Almaraz Nuclear Plant? Is the 50% reduction in the Extremadura tax sufficient to ensure its continued operations?

Well, I was -- you were listening to me for many long time, then the nuclear power plant are safe and are needed. So, I think they are needed more than ever in this moment for avoiding potential blackouts or potential problems in the service. Also, this power plant that you are talking about, they have national international license. So, which I think they allow them to operate at least up to 2030 without being forced to ask for any additional national, international license of operation. But there's something very, very important. It's a social -- national social demand in the country to maintain and operating. I think every week, there are demonstration, there are people writing of different tendencies, different ideas, different political parties and the civil society are asking to maintain and operating.

So for two reasons, because of this social responsibility and because the need of this power for keeping the lights on in the country and providing a safe, cheap service is why we three, the owners of the power plant, we have asked the government the continuity of the Almaraz power plant. So, that means in this moment, only depend on the decision of the central government, the continuity of those power plant. There are not any another limitation.

Technically, they are allowed to cooperate. Socially is demand, economically is the best solution. And in terms of the operation of the system is needed for keeping already the service operative. So, I think the energy policy made by the government. The government have to take the decision, and they will explain the consequences, whatever decision they will take about.

Another trendy topic in Spain. Can you provide an update on the latest developments regarding the regulatory framework for networks in Spain? And how would the remuneration rate below 7% affect your investment plans?

You're talking about Networks.

Networks in Spain.

Yes. I think that -- you know Networks in Spain for us is quite small compared with the Networks we have in other countries. I think, it's the fourth in terms, as you saw in our presentation, is the fourth of all our RAV in the different countries. The first one, largest RAV is in the state. The second largest RAV is in U.K. The third largest RAV is in Brazil and the fourth is Spain. So, I think it's small compared with the rest.

But saying that, I think as far as I know, they are still that is in process. There are no new news. I think, which I already heard is they are already make a public consult about the terms which have been proposed, but we have no more details on that one.

I think, something which is clear is either the government, central government, either the different government of the region are asking for the need of more, more investment in Networks. So, I think if that is not the proper framework, I doubt in this extraordinary investment, which is needed. So, it's going to be made as faster as it will require.

Next, how are the increasing cost of ancillary services being managed? And to what extent are these costs being passed through to the customer as contracts are renewed?

Pedro?

I think as of September, yes, we have a negative impact because of our multiyear contracts. But of course, these costs are being passed through as contracts are renewed. We expect by '26, 70% of this already through customers and almost 90% by '27.

Next is regarding the U.K. What is the company's perspective on the current regulatory environment in the U.K., particularly regarding the RIIO-T3 framework?

I think, we have a very fluent dialogue with the regulator. I think recently, I met personally the Chairman, the Chair of Ofgem. I think, they are aware about the need of sufficient profitability remuneration and financial ability for already to make -- to attract the investment needed. I think, it's certain they make already a draft determination, which is the base of our rate case plan. I think, our business plan is already just based in this draft determination. But I think, I'm sure that the sensibility of the Ofgem is such that, I hope that there is a potential improvement during the negotiation, which -- to make certain upside, but we will know the final determination by December.

So, I think now we are in the process of that one. But I think we are very open dialogue with the regulator, I think ourselves and another two players on this one. And I think they are -- my feeling is that they are already very sensible about the need of making already some adjustment to facilitate to make the huge investment which are needed.

Next is, can you provide details and expectation on your strategy for the AR 7 auction in the U.K.?

So as you know, we have already East Anglia ONE North ready to participate that one. So, I think we have a competitive project. We have all the security, all the supply chain secured. We -- but I think, we are very disciplined in terms of profitability criteria. I think yesterday, I heard the budget -- the final budget has been published, which I think only EUR 900 million allocated to offshore. But I think the flexibility to the Secretary of Energy to increase this amount depending on the numbers of bidders.

I think, this number, remind like it is in my feeling, my opinion, is not sufficient to achieve the country objective in terms of power, in terms of decarbonization. I think there are no other changes in this year 7. They increase the life of the CFDs from 15 to 20 years. And I think they already make already a reference price, which is 11% higher than the previous one. So, which I think that will sense. But I think the budget, in my opinion, is absolutely insufficient.

And I think, if the Secretary of Energy has already the power to modify the numbers after the auction. If that is not modified, my feeling is it should be difficult to achieve the targets where they are already thinking in terms of power, new power and in terms of decarbonization when they are already looking. But new power, in my opinion, they will not really achieve the numbers they were thinking about.

Next, what is the current status of the Mexico operation? And when do you expect regulatory approvals to be finalized?

I think in Mexico, you mentioned.

Yes, the deal in Mexico, the pending deal in Mexico.

Well, I think the agreement is signed. As far as I know, the buyer has already secured the financing, almost secured. And I think, now we are depending on the approvals of the different authorities. But as far as I know, the things are ongoing. I think, this week, our Mesonero, which is our M&A guy, I think, is in Mexico. And I think he will take fresh news already next week. So, but I think we are not already, let's say, we have not any negative input about that one, and I think they are going already according with schedule.

Two last questions. The first one is probably for Pepe. Effective tax rate is below historical average. Should we expect this effective tax rate to be kept at similar level at the year-end?

Well, I think that we will have tax -- an effective tax rate at the year-end to be around 20%. Let me explain that this is below basically for several reasons. First of all, because -- right now, the contribution of countries with a lower tax rate is higher than in previous years. So the U.K. and the U.S. versus Mexico and Brazil. An impact that it is reducing the tax rate this year is, as I mentioned, the U.K. Smart Meters capital gain in the first 9 months is at the gross and net. So, there is no tax impact here.

Last year, the thermal capital gain was affected by the Mexican corporate tax rate. And finally, as I mentioned, last year, we had a negative impact in the taxes due to hedges that we had in and had a positive impact in our financial expenses. And this year is the opposite. We are having a negative impact in the -- due to the last year transaction, a negative impact in our financial expenses due to the Mexican FX hedges that is compensated at the net -- at the tax level.

So, all-in-all, that is the explanation why this year, in the first 9 months, the tax rate is below 20%. And the expectation is that by the end of the year, the tax rate will be around this 20%, as I mentioned.

And last question is related to Spain and the contribution of the hydro production in terawatt hour in 2025, which is our expectation related to the average traditional average year.

So, just looking here at the numbers. I think, up to today, I think, our production of hydroelectric is around 18 terawatt hours, which I think is an increase of around 3% to 4% over previous year. Approximately 2/3 is traditional conventional and 1/3 is pumping storage. So, I see pumping storage is taking the important role on this one.

And I think, now the reserves is on the range of 6 terawatt hours. And I think that, now it's again, it starting raining, which I think heavily, so which I think in a few days, we hope level of reserves will increase. I think that is -- I think in terms of the year, I think it's important, but it's 3% more, but that is not the key of our result. As you know, our result is coming from other sources.

Even in Spain, the result is not going -- is not as good as last year, because of the prices and the ancillary service, et cetera. But I think it's a good news in terms that our results are high and probably with these rains, which are now coming and expected, I think the result can be already maintained, which should be a good thing for next year as well, contribution to the next year profit or next year results. So, I think that's good.

But I think, the news is it's 3%, 3% to 4% more than previous year. Pumping is 1/3, 2/3 is traditional and the results are in a good shape, very high. But I think that is already, there are room for increasing those one if the rainfall is continuing as the range as the expectation we have in this moment, with that give already certain possible, let's say, extra result for 2026.

We have received as well a final question regarding the guidance for 2026, but probably this is something that we will be delivering next February. So, we anticipate something on the Capital Markets Day, but I mean, for those that has asked this question in February will be the deadline.

So, just to finish this event, please let me now the floor to Mr. Galan to conclude the presentation.

So, thank you very much, as always, for your very clever, intelligent and very good questions. And thank you very much for participating in part of this conference. And if there are any new questions that you consider, I think our Investor Relations will be ready, as always, to give you additional information you may require. Thank you very much, and see you soon. Thank you.