Investor Relations. I'm here with the entire Electrica management team.

Thank you for joining us. It's a conference call and live webcast.

We are going to present and discuss the 9M 2025 financial results. Those of you who are connected only by phone, kindly download the presentation in PDF format available on our website under Investors Results and Presentations section.

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We'll make the recording of the presentation available latest tomorrow and the transcript as soon as possible. Now we'll begin the presentation of the financial results followed by a question-and-answers session.

I'd like to turn over the conference to Mr. Alexandru Chirita, Electrica's CEO.

Thank you.

Thank you, Raluca. Dear ladies and gentlemen, thank you for joining us at this teleconference in 2025.

In a nutshell, the financial and operational performance recorded in these first nine months of the year supports the direction we set for the companies within the Electrica Group: solid, financially disciplined, and ready for major investments. The achievement of a net profit of almost 840 million RON and the EBITDA exceeding RON 1.7 billion validate the efficiency of our strategic decision toward an integrated business model.

This robust performance is a direct result of our efficiency measures, rigorous processes, and of course, consistent execution across all business lines. The supply segment has returned to a stable position and contributed significantly to the strengthening of our financial results.

As the market liberalized since 1st of July, both the EBITDA and the net result of the segment had a positive evolution and impacted significantly the results. While the distribution segment continues to provide a steady flow of value through investments carried out at a sustained pace.

In this quarter, we recorded a threshold of 4 million customers connected to our network. The investments are commissioned according to plan with the aim to enhance the quality and resilience of the infrastructure across the counties we serve.

In the face of an increasingly competitive and dynamic energy market, our strategy centers on maximizing core business growth while maintaining a superior level of performance throughout the group's operations. Therefore, I want to take this opportunity to thank our shareholders who approved last week to initiate the necessary procedures to obtaining financing intent for the acquisition of core business line within an aggregated limit of up to €1 billion for the period 2025-2027.

Thanks to our robust financial position, we constantly evaluate the opportunities that come up within the energy market, the ones in line with our core business, and as we always do, we'll promptly and transparently update investors as these initiatives take shape. Renewable energy projects are a central focus for our team.

We have accelerated the development of our renewable and storage portfolio with the objective of supporting Romania's economic development, strengthening long-term energy security, and aiding energy transition. As a summary of Electrica renewables production, you know that Vulturu and Satu Mare 2 PV parks have been operational since the beginning of July 2025, respectively, October.

Therefore, at this time, we have approximately 4 MWp installed capacity operational. For other two photovoltaic parks, Satu Mare 3 and Bihor 1, with a total capacity of 140 MW, the estimated completion date is second semester of next year.

On the battery energy storage system, we are currently working on four projects presented before totaling 169 MWh, as well as on the additional 15 storage projects we announced last month totaling 1 GWh capacity. This perfectly aligns with our strategy that is approved, aligned, and looking forward to 2030 to get it done.

Looking ahead, we hold a positive outlook for 2025 and are committed to exceeding expectations with regards to our results and investment objectives. Investments in network infrastructure, digitalization, renewables production, and improvement of our internal processes remain our highest priorities.

We firmly believe our strategy, our operational discipline, our long-term vision, and most importantly, the professionalism of my colleagues in the whole group will enable us to deliver sustainable value to all stakeholders and contribute to building a secure and green energy future for Romania. I will pass the presentation to our CFO Stefan, who will provide detailed insights into our financial performance, and as custom, at the end of the presentation, we invite you to actively participate and address any questions.

We would like to have your insights and perspectives as we highly value them. Thank you.

Thank you, Alexandru. Now moving on to the numbers, I suggest we go to the first slide, slide number 13, which is a snapshot of our summary consolidated financials.

Here, you can see the increase of the revenues 9M 2025 compared with the similar period of 2024, which is due to also an increase in price of the energy, but also due to some increase in quantities of energy distributed by our distribution. In terms of EBITDA, as Alexandru was also mentioning, we reached a significant milestone of 1.7 billion RON as EBITDA for 9M 2025.

You can see here as a comparison that this is basically what we were getting for a full year in 2023, and we are quite pleased and proud of these results, which, as you will see, is the contribution of both our DSO subsidiary, but also of our supply subsidiary, which after the exit of the support scheme, came back to levels of EBITDA which are positive and are contributing significantly to the result of the group. In terms of net result, you can see the jump, which is, let's say, in line with the jump in the EBITDA, considering also the evolution of the deferred tax items.

We are reaching again a level of profitability which is exceeding 10% as a net result margin. As net debt, you can see the decrease of the position of net debt compared with the end of last year, which is related to the fact that we exited from the support scheme.

We are collecting from the support scheme. We have collected some 944 million RON this year from the support scheme and the amounts are not increasing anymore after end of June because the support scheme for power has come to an end.

You'll see this evolution of the net debt position also for our main subsidiaries in the supply and distribution. Moving to the next slide, to slide 14, you can see here the waterfall, which is showing the evolution and explaining the difference of EBITDA compared with the similar period of last year.

We have here a positive variation of the energy margin of 750 million RON, which is comprised of positive results both in the distribution segment and the supply segment. In the distribution segment, we have roughly 300 million RON as a positive contribution, which is coming from increase in the tariffs of distribution with approximately 4.5%, and then a decrease in the distributed energy of approximately 2.1%.

This is getting a significant positive impact of 430 million RON, which is more than compensating the effect of the increase of the expenses with energy for network losses, CPT, own technological consumption. This is an increase because, as you might remember, last year, for part of last year, we were also having MACEE mechanism, which was providing by centralized way energy at the 450 RON for the distribution companies.

Then we have also a significant plus in the energy margin in the supply segment of 442 million, which is comprised of several effects. There is an effect of increase in the sales price of the energy.

Then there is the effect that we don't have the cap anymore on the recognition of the costs with imbalances starting 1st of July. Then also for the quarter two, from April, 1st of April, we had under the support scheme the increase in the percentage of recognition of imbalances from 5% to 10%.

Then the fact that, since we are not in the support scheme anymore, we don't have anymore the method cost plus, we don't have the cap anymore on the price of the energy in comparison with the acquisition cost of the energy. All these components are generating positive impact for the variation of revenues and variation of subsidies, which are more than compensating the increase in the cost of electricity.

This results in a roughly 500 million positive energy margin contribution for the supply. We have also 22 million from other revenues, which is an increase of 12 million from the headquarter due to the positive resolution of some litigations and then also increase of some other revenues in the distribution with 16 million.

On the OPEX part, we have a negative variation of 100 million, which is a net impact generated mostly by the expenses with salaries and other employee benefits from the distribution segment, which is continuing the process of aligning the benefits with our regions in the distribution area. Then we have a negative impact from repairs and maintenance of 21 million mainly for the distribution segment and also a negative impact of 28 million from the meter readers and increase of taxes related to special construction tax.

Nevertheless, as you'll see later on, the distribution is performing very strongly and provides a significant contribution to our results. In terms of net result variation, 9M 2025 versus 9M 2024, 537 million RON positive contribution, which is coming mainly for the EBITDA.

As was mentioning, this is affected by the tax deferral element, increase of the income tax asset expense by 90 million. Then there is an impact on the financial results, which is mainly coming from the currency differences for the debt which is in foreign currency and for which we'll be considering to implement hedging solutions for the future.

In the distribution segment, you see here the highlights. I think one of the most important elements that I'm proud of and I would like to mention is that we have the fact that we exceeded 4 million users in our distribution area.

By the fact that the networks are growing, new people are connecting to the network, we have exceeded this milestone. In terms of results, you see here the explanation about the energy margin.

I covered them in the slides before. Then I would also mention that in terms of net result, we have here also a significant impact in net results, increase by roughly 200 million, mainly from the contribution of EBITDA with an impact from the income tax expense and financial results.

Net debt decreased also with 81 million RON compared with the year-end 2024 with an increase of bank borrowings offsetted by increase of cash and cash equivalents and a decrease in overdraft, showing also our preoccupation and our concern to move the debt for a longer tenor from shorter tenor from overdraft to long-term loans. You have here also the waterfall related to the EBITDA evolution compared with the previous months.

You can see here the significant contribution of the energy margin. Here are the details about the distribution segment and revenues, EBITDA, net result, net debt.

You see the evolution also of net debt. Then next slide, it's the usual slide, slide 17, the analysis on the budget, how this is composed starting from the RRR applied on the regulated asset base.

Then in the next slides, you have the decomposition of the 9M results based on the same element so that you better understand the mechanics and the methodology of the distribution tariffs and distribution methodology. Slide 19, you have the results there in terms of operational results, also in terms of results of evolution of network losses and distributed volumes, also the achievement of the CapEx plan as compared with planned ANRE CapEx plan.

I'll go then to the slide 21 with a summary of the Electrica Furnizare. Here you have also the details about the energy margin.

I would stay a little bit on the fact that we have also here the reduction of the net debt, which is shown due to the fact that we start to reduce the loans which were taken for the support scheme once the support scheme is ended and we are starting to collect the amounts. Also, another element to be mentioned is that we are already the fourth quarter in a row for EBITDA, positive EBITDA for the supply business, and in fact, the growth of the EBITDA of the supply business compared with the similar period for last year is majority provided by the growth of EBITDA in the supply.

Then you have the data about ranking in the market of Electrica Furnizare, volumes of energy supplied on the various categories of market. I'll stay a little bit on the slide 25, where you see the evolution of the price evolution on Day-Ahead Market and Balancing Market, and you can see that after the beginning of the year, right now, we are in the situation in which both markets are showing prices which are at a more palatable lesser level than the ones in the previous year.

Slide 26 is showing the situation of the receivables, basically adjusting receivables with the turnover. We are in a similar situation like in the past.

We have increased revenues due to the increase of the energy prices, and this is proportionally reflected also in the receivables. Otherwise, there is not an issue about collecting of receivables.

We are also having initiatives related to automating the initiation of legal recovery procedures and also outsourcing the out-of-court amicable collections process for receivables over 90 days for part view. We don't have a problem related to collection.

In terms of IFRS 9, the bad debt allowances are mostly related to some historical cases, some older than 5 years. As previously mentioned during the entire period and with the support scheme and after, there is not an issue about collecting from the customers.

Electrica Serv, it's going a process of optimization and transformation. In the front of the competition, increased competition in the market for green energy solutions, we would like to position it as better as possible to act in this market and to be able to compete in this market with the measures that we are considering.

We are looking for results improving towards the end of the year. In terms of production segment, and we had a question on the production segment, this starts to contribute stronger and stronger to the results.

This is posted also here in the slide and also as a separate segment in the note about segments in the financials. We have Vulturu, which is producing since the first part of the year, and then we are having Satu Mare, which got into the trial period recently.

This shows that revenue is starting to increase and basically we'll have roughly 50 MW of production at the end of the year, even if it's not necessarily a very big number, but it shows that in terms of the projects that we are doing, we are walking the talk, we are putting them into production, and we are consistent with executing our strategy. In terms of group liquidity, we have the best position so far after the beginning of the monitoring of this situation and after the support scheme came.

It's also related to the fact that we improved our efforts in collecting. We have also the liquidity from the bond issued in the summer that are placed in T-bills and deposits along the way until this is to be spent in the projects of generation.

Then we have also a very good position of liquidity also in our supply subsidiary, which collected the amounts as tariffs from the other supply companies. In terms of debt profile, slide 30, you can see the improvement of the debt profile in which the percentage of bank borrowings is increasing bank borrowings long term compared with the short term, and also in terms of maturities, we are having more than half of the debt which is with maturities more than 5 years.

This is the slide related to the distribution of dividends that we have also presented in the past. It's a matter about, after passing this period with the support scheme when we needed to get a lot of loans to finance the network losses and to prefinance the support scheme, the amounts to be recuperated from the state.

As we are starting to develop also the production, we will consider getting back to levels of yield of dividends similar with what it was in the past. Be the summary.

We'll welcome now your questions, and together with my colleagues and our team here, we'll focus to answer to you as good as possible.

Hi, good afternoon, and congratulations for the results. Hi, I can hear you.

Can you hear me?

Please.

Great. I will start with my first question regarding the supply performance after the end of the capping scheme.

We've seen an very unusual high EBITDA margin in the third quarter. Could you please detail what drove the margin so high?

Maybe you can give us a guidance, where do you see margins consolidating in the near term? Second, if you could comment also on the supply volumes.

The volumes decreased two consecutive quarters. Do you see some changes in demand or this is just because of competition?

Please give us your view on the supply volumes. My last question is regarding the media rumors that you are interested in the acquisition of Distributie Oltenia.

Have you submitted a non-binding offer for the acquisition of Oltenia? If you could please give us something here.

If you do plan to pursue this acquisition, what financing sources do you consider? Thank you.

That's all from my side.

In terms of the revenues on the volumes for the supply, strong discussions here and, even if we have a decrease of 3% of the volumes on the supply, as you can saw in the slide, we don't necessarily consider this as a warning signal for us. From our point of view, in this market, our focus is to optimize our activities and to be as profitable and as efficient as possible.

It will not necessarily be a battle of fighting for the market quota, yeah. I think that the focus for the supply is the one which is to optimize your activity, to have a relation with the customers which to be stable.

We are not that much affected about the customers which are migrating to other players. There is, for sure, migration, but in the end, I think that the fact that the market got liberalized showed that this is in the benefit of everyone, and it's a way of functioning which we're prepared and we are resilient, and we'll be continuing to there.

There is also the benefit that, as I previously mentioned, in our areas where we have mostly our customers in our supply area, people are not so keen to just chase any little difference in price and change the supplier, but they are more focused on having a steady relationship with a reliable supplier. Now, in terms of the other questions, I think Alexandru will help you with that.

Regarding the question about the acquisition, you saw that at this time, we are at the beginning on securing the financing. We got the principle approval from the shareholders, and now we're working on the fact that we have to secure the financing.

We will have you informed as soon as possible on what we have there as an offer and what we can achieve. Regarding acquisitions of all other alternative groups, again, we are pursuing interests that are convergent with the business lines of Electrica, and as soon as we have something to announce, we will do so through the proper channels, through the stock market, and we will let the investors know exactly what we are planning.

As previously also mentioned, in the note for the GMS, which was approved, you have all the details there. We have these plans of growing the business.

At a certain point, you are looking at growing the business organically, which is what we are doing, for example, with the production, and so on, but at a certain point, you might take a look also at anorganic options to grow the business because you have economies of scales and synergies, and from this point of view, we are looking at opportunities which are related with our main objects of activity as stipulated in the note for the GMS for which we got approval last week. Is there a follow-up question or we proceed?

Thank you. If I may

Please.

Yes, I have one more question if I may. Regarding the net cash position at the end of September, in your presentation, you have a 4.2 billion net debt position lower versus 2024, while from my computation, including bonds should be higher.

Is anything there excluded, included?

We should maybe take a look at the computation and we can take a look separately with you. The idea is that from the bond, we have placed some T-bills, but we have also reduced exposure on some credit lines.

Let's take a look at the numbers separately, and we can help with clarifying this.

Thank you.

Let's take it one by one.

We have some questions.

Let's take the first. When we will give up numbers regarding revenues and net results for the production of energy from renewables?

I think they are on slide 28, and you also have them separately in the financials. Stefan, you can go to 28.

Let's go to 28. We are monitoring the production segment since 5 years already, and we have here all the details related to production and the fact that it starts to contribute significantly to the EBITDA and the net result.

We have also the details in the note for the financial situation. We have specific note related to the segments.

It's not note 5 in the financials, which are detailing the segments. Also, there is a question about if 70.6% of the revenues are from the supply and 28.6% are from the distribution, where comes the rest?

I will also refer to this note 5, and I would mention that 0.1% is coming from the segment of production, it's this 8 million RON that you see here, and then there is some 0.7% which is coming from the segment of energy service, roughly 50 million RON. This would explain for the difference.

Going forward, regarding the memorandum with Romgaz for the 400 MW target, we are working on a strategy with Romgaz and we will come back shortly with the outline. We're looking on the best way we can have a synergy between us and develop the renewables as fast as possible.

The question regarding the dividends that will be paid from the net profit of last year. Now, the discussion with the dividends is strictly related to the net debt cash position that we have.

We still have a lot of receivables to receive from the state, until we stabilize this situation, it is hard to make a decision on dividends as we need to borrow money in order to pay the dividends, and it seems unreasonable. We're trying to maintain a higher and higher value for the dividends.

We're working with the board for a dividend policy that it's much clearer, and as stated before, it is in our intent to get back to a dividend yield stock, but we need to do this from a secure position that does not put in jeopardy any investments that we are currently doing.

We are not looking at a percentage of the net profit, huh? We are just looking at the situation with the plans, with the businesses that we want to develop, the investment plans, the liquidity that we have, and from this point of view, this is how we are considering for the dividend.

In terms of the question related to the network of distribution, we can say that roughly 35% of the overall network is already modernized. I think this was another question that we got.

Roughly, we have around 3 35% of the installation that we didn't read the question. The question is regarding the distribution network: what percentage is modernized and has a low loss and CPT number, the actual question.

We are roughly at 35% and we're working tirelessly to improve all this segment. The main goal is to have better quality, better service, and again, lower losses.

It will take time. There is an approved ANRE plan.

It is for the next decade. We are in line.

We always say that we are already doing the best we can and we can do more, but it's part of a negotiation because it's related with the tariffs and we need to see that through. There is another question regarding a possible error on the revenues consolidated at 70.6% with a difference of 20.6% and there's difference of 0.8% to

It's not an error. I have explained before.

This is 0.1% coming from the production and another 0.7% coming from the supply segment. Then there is a question about the there is a question about the the year year-end level The the question about the impairment of receivables.

It's not necessarily increasing sharply in third quarter 2025. There is a methodology that we are looking for revise according to IFRS 9 about how these are calculated and which should be affected should be should be adjusted to reflect the the market situation.

It's not like there is a cash collection issue. There are no cash collection issue.

The amount comprised is posted as the very amount, but also the ones according to IFRS 9, which are linked with receivables balances. If receivables balances are increasing, there is also increase in that.

The level for the for the end of the year will be similar with the with quarter 3 2025. There will not be another jump.

Going forward. If the revenues obtained from the energy producer from renewables from green certificates dropped or increases depending on the energy input/output?

Now, the green certificates were part of a scheme that only applied to a certain point. For new capacities, we don't have this situation.

They're fairly stable on what we have, with a possible very low decrease on, let's say, the usage of the parks per se. Now we have The CapEx guidance from

Yeah. I'll be taking that.

The point is this: you should Yeah.

We should read the question. What is the CapEx for this year and next year?

On the remaining 2 billion subsidies receivable, how much do we expect to collect this year and how much next year? What is the driver for increase in EBITDA in distribution segment, as I was assuming it was to remain stable given the WACC has not changed?

Basically as a guidance, we can give you a CapEx guidance for distribution until end of this regulatory period. Basically, you should expect roughly at least €150 million in equivalent as a distribution CapEx by the end of this regulatory period.

This is starting from the idea that we need, according to the regulation, to invest at minimum the regulated depreciation and then which can add maybe some 5-10%. This would be the minimum.

We could have probably an effort to put more and go up to €200 million in the next this next year, 2026 and 2027. For the so, all together, it's, okay, minimum €750 million cumulative for 5 years.

The same thing is for the for the for the generation, yeah. For the generation, we are looking roughly at €350 million by 2027, there is a two-step approach: commissioning and starting to have generation EBITDA and energy produced from these projects and then have a second step.

This is this would be in terms of of CapEx. In terms of the remaining 2 billion receivables that we have in the in the financial situation at midyear, as I mentioned, we collected some 944 million RON up to this year so far.

We expect to receive another another amount, which should post the collections above 1 billion for this year, and then the rest of of the amount, roughly another 1 billion, for for next year. We are in communication with authorities on this topic.

They know about the topic and about the fact that we we need to get this this amount recuperated, and we don't necessarily see an issue about that. If you look historically, out of 7 billion RON that we have filed in for recuperation, we got rebates like 6 billion RON so so far.

There is a delay, but there is the the willingness to find solutions and to have this repaid. Then, what is the driver for increase of EBITDA in the distribution segment, as I was assuming it was to remain stable giving the WACC has not changed?

From this point of view, there is also a matter about improving our efficiency, first of all. You can see this also in this year, and in the compared to the previous years, we are we are posting significant improvements of EBITDA in the in the distribution.

Paying more attention to, how to how we unfold our our activities and focusing on reducing network losses and optimizing on everything that it is in our activities. There is there is this this also this profile in which in the course of a regulatory period, when you agree with the regulator for a 5-year period, generally, what happens is that there is this profile in which you have you have less profitability at the beginning of the years, and then you are having increased profitability towards the end of the year years of the period.

Just to complete what you were saying. For the distribution segment, we have roughly €150 million per year minimum that adds up with the hundred, I think, €400 million from EU funding, which is actually increasing, and as more calls open, we apply to more.

That's roughly for the distribution segment. For the renewable segment, keep in mind that we have 2030 targets.

2030 target is 1 GW of renewables, which is roughly €700 million by 2030, and the 1 GW of batteries should be roughly around 350, it's €1 billion investments by 2030 on the energy production segment.

I don't know if we have another question.

There is a question about the increase of recognition of imbalances from 5% to 10% is a permanent one or temporary? It was during the support scheme.

It was improving our results, our recognition from 1st of April until end of the support scheme for the energy, 30th of June. After 1st of July, we don't have the support scheme anymore, we don't have any cap in terms of recognizing the imbalances costs in terms of having them recuperated from the customers.

This was a matter which was related to the support scheme, and we benefited for the last quarter of the support scheme of this increase.

Let's have another try. Maybe someone wants to ask a question written.

Otherwise, we are available for any related questions that you may have. You can contact Raluca or the executive team at any point.

We'll happily answer. We will keep you updated on any news as fast as possible, and we're optimistic on how things are going, we're keeping the work going as hard as we can.

Let's wait one more minute.