Good morning, everyone, and thank you for joining us today for our first-half 2026 results presentation. With me today are our CEO, Gianni Armani, and our new CFO, Daniele Caprini.

Before we start, let me remind you that after the presentation we will move to the Q&A session, and starting from today, we will only take questions submitted in advance by email or through our website. In addition, given the busy earnings calendar with a large number of companies releasing results today, we aim to limit the duration of the call to one hour.

Thank you once again, and now I would like to hand over to Mr. Armani.

Thank you very much, Mar. The first half of the year delivered solid financial results, with EBITDA increasing by 20% and net income growing by 41%.

This performance reflects growth across all businesses, supported by higher contribution from regulated activities, including both distribution and non-mainland generation. These results highlight the resilience of all our businesses and the disciplined execution of our strategy.

Growth has been supported by continued efficiency efforts, allowing us to improve profitability and maintaining solid financial ratios. At the same time, we continued to accelerate the execution of our investment plan, with networks remaining the main focus.

Overall, the robust operational and financial performance delivered with more than 60% of full-year EPS target already achieved, together with a strong visibility that we have for the remainder of the year, leaves us well-positioned to raise our full-year EPS guidance. On slide 4, in the first half of 2026, EBITDA increased to €3.2 billion.

More importantly, the contribution of our regulated businesses increased from around 40% to approximately 50% of total EBITDA. This reflects the weight of networks and other regulated activity within our portfolio, further strengthening the quality and resilience of our earnings.

This stronger earnings profile translated efficiently into solid bottom-line results. Net income reached €1.5 billion, implying 45% EBITDA-to-net-income conversion, while EPS increased 46% to €1.44 per share.

Lastly, cash generation remained strong, with EBITDA to FFO standing at 70%, and FFO to net financial debt reaching 38%, supporting a strong financial position. Turning to market conditions on slide 5, power prices fell almost 20%, despite the energy market being clouded by uncertainty and volatility stemming from the ongoing geopolitical tensions.

This decline has partially offset by the significant increase in ancillary services costs, since one one year after the blackout event, the TSO reinforced operation continues to drive up overall system operating costs. In fact, according to external sources, this cost could exceed €5.6 billion in 2026, broadly equivalent to the distribution network costs.

Against this backdrop, electricity demand showed a modest growth, with largest increase on residential segment, mainly due to temperature effects, followed by services and industrial demand, still affected by the uncertainty of geopolitical scenario. This reinforced our view that further investments in the grids will play a critical role in enabling economic growth, supporting electrification, and unlocking future demand.

In this sense, the royal decree approved yesterday, and of which we don't have yet the final text, significantly raised distribution investment cap, providing additional headroom to accelerate capex deployment in the coming years. As we can see in slide 6, we continue to accelerate our investment plan, with gross capex increasing by 14% year-on-year to €1.1 billion.

Networks remained our main investment area, representing more than half of total capex. This increased investments effort has already delivered operational improvements, with lower network losses and TIEPI remaining at even or even improving when exceptional weather-related events are excluded.

In renewables, the output reached 11 TWh, with 86% of mainland output coming from emission-free technologies. In supply businesses, the total customer base stood at 11.3 million, while free power customers increased to 6.3.

The Spanish retail market remains highly competitive, although we expect a more rational environment going forward as regulation tightens and market conditions evolve. Against this backdrop, our retail strategy remained focused on value creation, customer quality, and profitability, supported by a more pull-oriented channel mix and an enhanced customer experience.

The customer proximity remains the key differentiator. With a network of more than 370 stores across Spain, we continue to reinforce our physical presence through the expansion of our directly managed commercial footprint, enhancing customer relations and strengthening control over customer experience.

At the same time, we continue to drive customer growth and loyalty through our digital initiatives, while leveraging on MasOrange partnership, exploring new opportunities for customer acquisitions and reinforcing loyalty and enhancing commercial offering. Let me now hand over to Daniele for the financial results.

Thank you, Daniele.

Thank you, Gianni. Before we begin, let me say that I am very pleased to be joining this call in my new role of CFO of Endesa.

Turning to slide 8, let me briefly highlight once more the outstanding economic and financial performance delivered in the first half of 2026. EBITDA increased by 20% year-on-year to €3.2 billion, while net income rose by an even stronger 41% to €1.5 billion.

Net financial debt increased by €0.2 billion to €10.3 billion, with the net-financial-debt-to-EBITDA ratio remaining at 1.6 times. Moving to slide 10, looking at the main drivers behind the strong financial performance, first, network EBITDA increased by 24%, mainly supported by the new regulatory framework in force since the 1st January of this year, and the effect of positive previous year resettlement, resulting from the update of certain remuneration parameters booked in Q1.

Generation and supply EBITDA increased by 16%, driven by: first, higher customer EBITDA, with the resilience both in gas and power margins, despite ancillary services cost increase, together with an improvement in fixed cost; second, stable renewable EBITDA, as the negative price effect from lower references was offset by better volumes and lower fixed cost; then, in conventional generation, EBITDA also rose by 18%, supported by both margin expansion and cost containment. Margin increase was driven by €0.2 billion improvement in non-mainland generation margin, supported by the favorable regulatory framework, which enabled future greenfield investments in this business, as well as by prior years' resettlements.

This was partially offset by the normalization of the gas management margin. Operating costs decreased by €45 million, further contributing to EBITDA growth.

Turning now to our network business, and I'm now on slide 11, as mentioned before, the new regulatory framework drove an improvement in earnings, with the network EBITDA rising 24% to €1.2 billion, representing 36% of total EBITDA. Networks continues to increase its contribution to earnings, further enhancing the visibility, resilience, and quality of our results.

At the same time, we significantly accelerated investment, with the network capex rising to 38% year-on-year to €0.6 billion. This reflects the increasing needs for grid reinforcement and expansion to support the energy transition and growing electrification trends.

This investment effort is translating into continued growth of our regulated asset base, which reached €11.4 billion, providing additional visibility on future regulated remuneration and reinforcing the long-term growth profile of the business. Focusing on the retail business on slide 12, our retail action plan continues to deliver visible benefits, improving both the efficiency of our commercial model and the quality of our customer portfolio.

We are seeing the benefits of a higher share of pull-driven acquisition and lower cost to serve, reflecting a more efficient and disciplined customer acquisition approach. These improvements are also supporting stronger customer quality indicators.

In particular, early churn decreased by 5%, while bad debt levels also continued to improve. Together, these trends are enhancing the quality, profitability, and sustainability of our retail earnings.

Now I'm on slide 13, and turning to our integrated power and gas unitary price margin, the free power margin remained broadly flat in absolute terms, absorbing the impact of higher ancillary services cost. Combined with lower liberalized sales volume, this drove the unitary margin up by 6% year-on-year to €56 per megawatt-hour.

We also reshaped our hedging approach to achieve a more flexible alignment between generation and supply profiles. This enhanced matching capability allows us to optimize the management of our energy position, strengthening the value of our integrated business model.

Looking ahead, we expect the free power margin to remain aligned with our full-year 2026 guidance. Meanwhile, the gas margin remained broadly flat.

Lower sales volumes drove the unitary margin to €11 per megawatt-hour, up 7% year-on-year. Our high hedging levels in both power and gas continue to provide strong visibility with limited exposure to market volatility.

Moving to slide 14, efficiencies continued to translate into tangible savings, with fixed cost decreasing by 8% year-on-year. Efficiency gains more than offset inflationary pressures and the cost associated with business growth, supporting continued reduction in the cost base.

This performance reflects the ongoing execution of our transformation program, with more than 500 initiatives focused on simplifying the way we work, streamlining processes, optimizing assets, and accelerating digitalization. Across areas such as workforce optimization, operation simplification, IT and software license optimization, asset management, procurement, and commercial activities, these initiatives are already delivering tangible productivity gains.

We expect them to progressively materialize throughout the year. Moving now to slide 15, net ordinary income reached €1.5 billion, up 42% compared to the first half of 2025, reflecting the strength of underlying operating performance and positive non-recurring effects.

This resulted in an improvement in the net ordinary income-to-EBITDA conversion ratio to 46% from 38% a year ago. D&A and provision remained broadly stable at €1.1 billion, as lower bad debt partially offset the increased amortization linked to higher investment.

Financial results improved by €0.1 billion year-on-year, mainly driven by late payment interest income recognized following several favorable administrative and judicial ruling. Finally, the effective tax rate stood at around 24%.

Turning to next slide, cash generation continued to be robust, with the FFO reaching €2.3 billion, implying a remarkable 70% cash conversion, in spite of a transitory negative effect in working capital. Net financial debt remains quite stable, as the strong cash flow generation was almost enough to fund investment needs, as well as €1.2 billion of shareholder remuneration, including both the interim dividend paid in January and the share buyback program, which represented a cash outflow of approximately €550 million.

It's worth highlighting the remarkable FFO net debt ratio at 38% over the last 12 months, as well as the solid leverage ratio, which will allow us to accelerate and capitalize on investment opportunities. Now I hand over to Gianni for the closing remarks.

Thank you very much, Daniele. Let me now turn on to shareholder remuneration and provide an update on our share buyback program, a key pillar of our capital allocation strategy aimed at maximizing long-term value.

By the end of June, we had already completed more than 50% of our €2 billion share buyback program, keeping the execution firmly on track. Indeed, on July 15th, we started the execution of the sixth tranche, amounting to €500 million, further reinforcing our commitment to enhance shareholder returns.

Beyond the attractive effect of the buyback, our commitment to shareholder value is also reflecting in the confidence in the earnings outlook for 2026. As shown in slide 19, as highlighted earlier, following the strong performance delivered on the first half of the year, including the positive contribution of certain non-recurring items, and given our confidence in the outlook for the remainder of the year, we are upgrading our 2026 earning guidance.

We now expect new net ordinary income to exceed €2.4 billion, comfortably above the upper end of the original guidance range, translating into a higher earning per share and supporting enhanced shareholder returns. Before we conclude, let me leave you with some key messages.

First, electrification remains the greatest opportunity for Spain. Unlocking a significant demand awaiting for connection will require accelerating grid investments, not only to support economic growth and energy transition, but also to improve system efficiency and reduce overall system costs, particularly ancillary services cost that are needed to provide security for the network.

At the same time, in a volatile commodity environment, Endesa integrated business model remains a key competitive advantage, providing resilience, mitigating market exposure, and supporting sustainable long-term value creation. Thank you for the attention, and we will now open to Q&A session.

Thank you, Gianni. Let's now move to the Q&A session.

We received a lot of questions for the call that we have tried to summarize by topics. In particular, we received questions from Alberto Gandolfi, Goldman Sachs; Fernando Garcia, RBC; Jorge Alonso, Bernstein; Arturo Murua, Jefferies; Rob Pulleyn, Morgan Stanley; Peter Bisztyga, Bank of America; Jenny Ping, Citi; Meike Becker, HSBC; Pablo Cuadrado, JB Capital; Pedro Alves, Caixa; Davide Candela, Intesa; and Javier Suarez, Mediobanca.

Thank you to all of you for participating. The first one is, could you quantify the impact of non-recurring items booked on the first-half results?

I think, Daniele, that is for you.

Thank you, Mar. Approximately €0.2 billion of the €3.2 billion EBITDA reported in the first half 2026 was driven by positive non-recurring items.

This included around €0.1 billion in distribution, related to the prior-year remuneration resettlements, and further €0.1 billion in non-mainland generation, primarily reflecting the favorable Supreme Court ruling on historical fuel remuneration. Beyond the EBITDA impact, these items also contributed approximately to €0.1 billion of late payment interest income, positively affecting financial results.

The next question is also on the first-half results. Can you explain the evolution of the non-mainland generation EBITDA?

This business delivered a margin increase of approximately €200 million, primarily supported by the enhanced regulatory framework for 2026-2031, which provides for higher return and proved recognized operating and economic standards. In addition, as I have just commented, these results benefit from the positive sentence recognizing higher fuel remuneration for 2020-2022, as well as from the lower O&M costs registered in the period.

It's important to emphasize that the new remuneration framework for this business is considerably more investment-friendly, enhancing the attractiveness of future investments.

We have received some question asking for more detail on how the supply EBITDA in the second quarter has increased despite high customer losses and energy cost.

The improvement in retail EBITDA in first half 2026 reflects, to a large extent, the benefits of the commercial and pricing action implemented over the past 12 months in our electricity retail business to address an exceptionally challenging market environment characterized by unusually high ancillary services costs. These measures progressively gained traction during the period and were further supported by lower energy sourcing costs, particularly in the second quarter.

In addition, the gas retail business delivered a strong performance, especially in the B2C segment, providing a further contribution to earning growth. Finally, continued efficiency initiatives led to a meaningful reduction in fixed operating costs across the retail business, further enhancing profitability.

Okay. Next, we have a couple of question about the efficiency plan evolution.

The first one is, how is the efficiency plan progressing, and on the same topic, how artificial intelligence is contributing to the efficiency plan?

Fixed costs in first half 2026 evolved in line with efficiency plan presented in February. As shown on slide 14, efficiency gains more than offset inflationary pressures and the costs associated with business growth, resulting in a continued reduction of our cost base.

In addition, we continued to implement further efficiency initiatives that are expected to progressively materialize throughout the year, supporting the achievement of our cost discipline targets. About the AI initiatives, the efficiency plan is increasingly driven by AI initiatives that at the moment cover approximately the 50% of business processes so far.

The adoption is focused on high-value use case across customer operation, network management, asset maintenance, software engineering, cyber security, workforce productivity, and service quality, operation resilience, and so on. Some of our most advanced applications are already delivering tangible benefits in generation and in distribution, particularly in predictive maintenance, network monitoring, and fraud detection.

The next question is about the hydro, how sustainable is the stronger hydro performance seen in the first half?

Hydro performance in first half 2026 was slightly ahead of our initial expectation, with the output reaching 5.4 TWh. Particularly noteworthy was the contribution from pumped-storage facilities, up 29% versus first half 2025.

This stronger hydro contribution provided additional support to generation earnings and the overall integrated margin during the period. Looking ahead, our outlook remains constructive, but fully consistent with the business plan assumption of favorable hydro year in 2026.

Reservoir levels remain healthy and comfortably above the 10-year average, providing good visibility for the remaining of the year.

We move now to the hot topic of the call that is update on guidance. The first question is, what give you confidence in upgrading net ordinary income target?

We are upgrading our net ordinary income guidance on the back of a strong first-half performance, combined with the good visibility on the expected evolution of the business for the remainder of the year. The first half of the year delivered solid results, supported by positive operational performance in all business lines.

In addition, we benefit from non-recurring positive effect, both at margin financial results level, which were not embedded in the guidance range presented at the Capital Markets Day. Taking all these factor into account, and based on our current expectation for the second half, we now expect net ordinary income to comfortably exceed the upper end of our guidance range.

We are very comfortable, and we'll see during the second half what will happen, but we are very, very comfortable.

Indeed, the following question was precisely about the main operational drivers for the second half.

The drivers are more or less the same, and we don't expect any change on these drivers. Operationally, we expect the second half to follow a trajectory broadly similar.

In distribution and non-mainland generation, we will continue to benefit from the positive impact of the updated regulatory framework applied to a growing asset base. In the liberalized business, we expect to maintain free power margin broadly in line with first half 2026 level, landing at approximately 44 54 €55 per megawatt-hour by year-end, almost neutralizing higher-than-expected ancillary service costs, which we estimate will have a net impact lower than €100 million in full-year 2026.

Regarding the gas margin, after the good results recorded in first half, we expect certain moderation in the coming quarters, according to the seasonality of the business.

Thank you. An additional question is if Endesa could capture any upside from higher wholesale power prices expected for the second half of this year.

Very limited, if any. At this stage, our inframarginal generation is effectively fully hedged through fixed-price sales to our customer base.

As a result, higher pool prices would have a little impact on full-year 2026 earnings.

Okay. On a different topic, and I think this is a question for our CEO, some analysts are asking if, following the recent management changes in Endesa, do you expect the current strategic plan to remain unchanged, or could there be some adjustments in the next Capital Markets Day?

Currently, our strategy drivers remain unchanged. Clearly, investors expect continuity, and our focus is in delivering the most out of the strategy plan that we have presented the beginning of the year as a group and as Endesa.

We clearly will communicate a new investment plan in a Capital Markets Day at the beginning of 2027 with renewed market developments and the new regulatory trends. Of course, our focus continues to be in the same directions with slight adjustments even in the future.

Okay. Regarding the share buyback program, we have received three different questions.

The first one is if we are committed to complete the current share buyback program. Second is if we continue purchasing shares considering the current price, if it makes sense or not.

Finally, if we plan to launch a new share buyback program after the completion of the current one.

Very briefly, as we shown in slide 18, we are fully committed on the plan. The plan is clearly on track.

We believe that the investment still remain value-accretive, given the performance that we are delivering on the results for the year and for the future, and represent an attractive use of capital. The outstanding shares that we cancel enhance earning per share and support higher dividend per share, providing an attractive return for shareholders.

Lastly, we actually are not thinking to launch an additional plan, and no extension of the current plan is currently under consideration.

Most of the analysts are asking for our view on the royal decree recently approved—indeed, it was approved yesterday—which increased the cap on the network investments.

Yes, the ministry with this decree is fully aware that electrification is enabled by extension of grids, and this allows both electrification and the change of production mix that is in progress in Spain. Large part of the network are close to saturation, and this clearly is a problem to be solved in order to unlock economic growth.

The new version of the royal decree, even though we don't have the final text that should be published today or tomorrow, we believe, includes a significant improvement of initial additional cap that allowing up to €10.2 billion of investments in distribution in the years between 2027 and 2030 versus the 7.7 that we had in the initial drafts. This is going clearly in the right direction, providing greater regulatory visibility and level and also allocating network investments with a view until 2030.

Of course, this is the main focus of our strategy, and we believe that this is the right direction that the regulatory framework is going.

We have two additional questions also related to the grid. The first one is, what's your opinion on the new grid capacity reservation regime set in the Royal Decree-Law 7, and if we expect further regulatory intervention to free up grid capacity?

Yes, of course, demand and supply of grid capacity is creating a great tension in the correct availability of capacity. This regime is clearly under review from the ministry, and royal decree 7 of the beginning of the year has intended to modify the balance of the market, imposing new additional burden for speculative connection requests.

Unfortunately, the released capacity for the application of the decree has been limited to 1.2 GW in distribution and 1 GW more or less in transmission. This is not very much compared to the 45 GW that are the outstanding requests for capacity only in distribution.

We see that of course, this situation will evolve, but the real solution for this tight market is clearly to expand distribution capacity and accelerate investments in this aspect. Do we expect future and further regulatory interventions?

This might be. It's clearly the allocation of capacity that is not effectively used is clearly an inefficiency that the regulator has to validate and to adjust.

There are several ways that can be done, and we are studying together with the ministry ways to solve this issue.

Next, an update on data center and what are the main bottlenecks for their development, and which is the Endesa approach to this business?

Clearly, data centers is going to be an infrastructure that will enhance productivity, and as a potential to expand electrification together with being an intensive user of energy. Beyond the investment impact that may have on our grids and clearly being a potential customer, it's really important to facilitate the expansion of this kind of infrastructure in the system.

We expect the deployment gradually even in Spain, with a good visibility over the 5 and 10 years of the commitment of investments with a growing pipeline that we see in the sector.

The next question, what are the latest news on Spanish blackout?

The administrative proceedings remain at early stage, and at present, there is no visibility on the final outcomes. On the basis on this basis, we we don't assume any financial impact in our numbers.

Indeed, these proceedings mainly relate to historical technical compliance matters, and do not establish responsibility and a link between the the the behavior of specific infrastructures and plants for the blackout day. The opening of the investigation does not imply guilt and prejudice and the therefore an outcome, specific outcome.

We have already submitted all our allegations and continue to defend our position vigorously. The process is expected to continue for several months or or years, and potentially for a very long period of time at this stage, and we believe it is important to separate headlines from the actual risks.

Our view is that the blackout was a systemwide multi-functional multifactorial event linked to the voltage control, system operations, and the increased complexity of managing a power system with renewable penetration. In this sense, the Spanish system is at the the edge of the innovation in the transition, and this is experiencing new situations that requires different different investments.

Since the incident, the system operator has introduced a number of changes, particularly in introducing enhanced voltage control requirements, additional stability mechanism, and more conservative operating procedures, aiming at strengthening system security. The fact that these measures were considered necessary suggests that the previous networks framework and scope had possibility of improvement in addressing the risk and that ultimately has materialized.

At Endesa, our position is unchanged. We maintain that our assets operated full compliance and with applicable regulations during the event.

Therefore, at this stage, we do not see grounds to assume any material financial impact. On cost-based evaluation, we see that now it's very important to prioritize an investment plan that solves the transitory operational system that has been that is operating that is operated by the TSO.

The cost of ancillary services is becoming an important cost for the system, and this requires a long-term solution.

Thank you, Gianni. I think that we can move to a different cluster.

We have received some questions about the retail competition in Spain. In particular, the first question is in terms of customer evolution, the evolution also of the churn rates or the margins in our business.

As expected and represented in the presentation, the retail market remains highly competitive, with increased customer mobility and the pressure from new entrants. Despite this, Endesa continue to deliver solid profitability, supported by commercial discipline, customer retention initiatives, and improved customer mix.

We have streamlined our sales agent network, removing channels associated with higher churn levels. Although this in the short term has a negative impact on customer volumes, this is explained with the enhanced portfolio quality that we are obtaining, and support a more stable customer base over the medium term.

The shortfall of clients' acquisitions in reality has limited impact on the numbers of the retail business. In the market, there are already seeing signs of more rational and competitive environment, helped by the recent regulatory measures and higher ancillary costs that limit unsustainable pricing practices.

Going forward, we expect competition to becoming progressively more balanced, and the less stable positions to fall into distressed one.

Okay. Indeed, we received a follow-up question that is, what's your view on the tighter regulatory framework for energy retailers?

We believe that a robust regulatory framework is essential to ensure healthy, competitive, and financially sound retail market. This is going in the right direction, improving also the relation with clients in the sectors.

Okay. We have one question on the island business.

Will you participate in the new capacity auction?

We are currently reviewing the details of the tender and submitting our allegations in order to improve the conditions of the tender and, of course, allowing the tender to be successful. This will be by the beginning of August the submission of our allegation.

The auction confirms the need of additional capacity, firm capacity in non-mainland systems. This could unlock investments opportunities for us, and, of course, for competitors.

We are positioned very well to contribute to the future of non-mainland generation business, and we are aiming to do so.

Okay. Another hot topic of the call is related to the status of the nuclear extension request.

Regarding the extension of the operating license of Almaraz until 2030, the Nuclear Security Council has just finished its technical assessment, issuing favorable opinion, confirming that Almaraz can continue operating safely under the highest technical standards until 2030. The file of this procedure is now in the hands of the ministry that will be responsible of taking the final decision that we expect before the end of the year.

Okay. We have now some questions on different topic: renewables.

The first one is, do you see still attractive investment opportunities in renewables under the current market conditions?

The economics of standalone solar projects are becoming more challenging due to the lower capture price and increased price cannibalization, and a growing number of zero price hours and rising of curtailment. All this is clearly showing not favorable perspective for this kind of investments.

As a result, the project selection and the asset configuration have become increasingly important. The market is shifting beyond the standalone renewables towards an integrated energy management model, where the combination of renewables, storage, flexibility, hybridization, and customer solution create clearly a greater value.

In this environment, Endesa, like other integrated utilities, is well-positioned.

Next, and looking ahead, do you see a scope for additional investment on storage?

Clearly, storage is becoming an increasingly strategic component of power system, and important enabler of renewable integration. On top of the pumping storage already in our mix, we're also strengthening our commitment to batteries and hybridization of plants.

In our business plan, we have increased significantly the planned investments, with a sizable pipeline of €300 million of more or less 400 MW of battery capacity.

The last one of this cluster, are you seeing acquisition opportunities in renewables?

We see increasing opportunities emerging from market consolidation, particularly in renewables. Some of the smaller developers and players face a pressure from lower merchant margins and returns, financial constraints, and limitation of scale.

We will assess this opportunity, as always, with a selective approach.

On the macro context, how is Endesa's exposure to the current geopolitical scenario?

In reality, our exposure is currently very, very limited. The resilience of our first-half results of 2026 are a proof of it.

We are fully in line with pre-conflicting expectations, actually more than this expectations. This demonstrates the strength of our business model, and we do not currently anticipate any material impact on the performance for the remainder of the year.

Next—

Let me add one thing. We actually can view in this situation the value that has been created by the sector in the energy market in Spain.

Broadly across Europe, the impact has been significantly strong even in the electricity sector. In Spain, in reality, the sector has created a shield over this geopolitical tension.

Despite the recent price volatility, we estimate that clients have been protected from an increase in the energy cost up to €3.5 billion in the first half of the year, which is a significant protection given by the sector in the smart investment strategy that has been adopted in the last year.

Okay. In this context, are you concerned about the possibility of new extraordinary taxes on utilities?

We don't see a risk of further market intervention in Spain. Prices have been stable and there is no extra profit to extract from market speculation that has been adopted in Spain.

Thank you. We have one question regarding the capacity payment mechanism.

When do you expect the first auction to take place?

The approval of the mechanism is clearly in line with the trend of regulation in Europe. The need for stable firm capacity, even in a scenario where renewables are prevalent, is still very important, and guaranteeing a stable revenue stream more similar to a regulatory scheme is important to guarantee this firm capacity.

We expect the first auction by the end of the year, as probably the ministry is planning to work on it.

Next, what's your view on the new European Commission regulatory proposals?

We see the initiatives that have been taken both on electrification plan and ETS reform in line with the strategy that has been adopted by EU, reinforced by the need of that electrification drives that is allowing energy independence for the continent. Of course, electrification plan reinforces the strategy towards electricity, and enhancing the consumption target in 2040 to 46% versus current 23%.

This is perfectly in line with our strategy, and not only ideologically, but also economically makes sense.

The last question concerns the wildfires seen in recent days and their potential impact.

Wildfires and exceptional events are more and more frequent across Europe, and particularly in geographies like Spain. This is clearly an emergency that requires different organization to manage these emergencies, and also requires planning of infrastructure in order to be more resilient.

All these events put huge strength on infrastructures, and particularly energy infrastructures like electricity, and the technical requirements in terms of redundancy and resilience needs to be upgraded. Some markets have already moved to reinforce the regulation in this sense.

Okay. With that, we conclude today's presentation.

Thank you very much for taking part of this conference call. As always, investor relations team will be available for any follow-up question.

Just to wish you all a wonderful summer break. Thank you very much.