Hello, good evening, everyone. Today, first quarter 2026 results presentation will be led by our newly appointed CEO, Gianni Armani, whom we warmly welcome today, together with the CFO, Marco Palermo.

Before we start, let me remind you that after the presentation, we will have the usual Q&A session. Thank you, and now let me hand over to Mr.

Armani.

Thank you very much, Mar, for your kind welcome. I've only recently taken up the role of CEO, and I would like to ask you the indulgence for a brief settling-in period.

For this reason, during the Q&A session, I will take slightly a secondary role, giving the floor to our CFO that will answer to all your questions professionally. Thank you very much for the understanding.

The quarter delivered solid financial results, with EBITDA growing 14% and net income rising 24%. The performance was primarily driven by the distribution business, which continues to demonstrate its strength, supported by effective and disciplined management of our grid and in the environment of the new regulatory framework.

Once again, the period highlights the resilience of Endesa's liberalized business model. Despite the environment shaped by the geopolitical uncertainty, the ongoing volatility of the energy markets, our strategy has enabled us to deliver consistent and robust results.

Finally, the quarter highlights the strategic importance of a well-diversified energy mix, where renewables and nuclear generation, along with demand electrification, remain a key to strengthening the energy independence and ensuring price stability. These pillars are essential not only for the energy transition, but also for increasing the resilience and reliability of the systems, and I would add, to contribute to the growth of Spain as a country.

The strong operational and financial execution provides the necessary visibility and the confidence to confirm the full-year guidance. With that, I will turn to the operational and financial developments of the period.

On slide 4, let me briefly comment on the operational evolution during the quarter. Starting with generation, the total output increased by 8% year-on-year, reaching the more than 14 TWh.

The performance was primarily driven by higher renewable production, which rose 18% compared to first quarter last year. Hydro output increased 13%, benefiting from very favorable rainfall conditions during the period, while our reservoirs stands at record levels.

At the same time, wind and solar output grew 24%, supported by both higher installed capacity and solid resources conditions. Nuclear output was slightly lower, reflecting the scheduled refueling outages.

Overall, the generation from non-emitting technologies, including nuclear, accounted for approximately 87% of total peninsular production. At the same time, CCGT generation was materially higher, benefiting from the increased demand for backup services for the TSO.

Meanwhile, the sales slightly decreased by 5% to 18 TWh, mainly driven by lower indexed volumes on Iberia, mostly B2B customers, more exposed to market uncertainties, and fixed price sales remained stable instead. Finally, the number of free power customers grew by 3% year-on-year to 6.4 million, including the contribution of Energía Colectiva, which added just about 300,000 customers on power portfolio.

From the market perspective, I'm now on slide 5, the current geopolitical tensions around the Strait of Hormuz have once again placed the energy market on the forefront of the debate. While the distribution of commodity supply routes is certainly affecting the global markets, as far as gas is concerned, strong US LNG flows into Europe have limited the impact if you see it on a quarterly pricing levels compared to last year.

TTF spot price averaged around €40/MWh in first quarter this year, representing a 15% decline year-on-year. At the same time, the CO2 prices reached €76/t, up 4%.

This evolution is not particularly linked to the energy crisis, but more into structural factors linked to the progressive tightening of EU ETS mechanism and the introduction of the Carbon Border Adjustment Mechanism, the CBAM. As a result, the average Iberian pool price in the first quarter stood at €44/MWh, down 48% year-on-year, this notwithstanding the crisis conditions on the commodities.

This comparatively low price levels has helped to contain the power bills, absorbing the impact of exceptionally high ancillary services cost driven by the TSO reinforced operation in dispatching since April 2025 blackout. From a cross-country perspective, Spain average price remains very competitive when compared to main European economies, underscoring the reduced exposure to volatile prices thanks to the high share of renewables energy sources and the reliable nuclear fleet that contributes to reduce exposure.

On slide 6, we review the demand evolution trends. Electricity demand at the start of the year keeps showing a growth trend, consistent with the previous quarters.

On adjusted basis, mainland demand grew around 1% year-on-year, which compares to 1.7% demand increase in Endesa areas, mainly leveraged on a steady contribution from services business and residential consumption. The weak performance of industrial sector appears linked mainly to the uncertainty on the geopolitical scenario.

In this context, the high level of network congestions across all major distribution nodes remained a critical concern for the future. As of April's last available figures, Spanish power grids saturation reached 90%, which largely hinders the connections of all these new demand vectors.

It is clear that to unlock the potential that contains the total cost of energy, grid bottlenecks and inefficient system operator operations should be solved. Therefore, efforts must be focused on providing comprehensive framework to foster required investments in distribution for network security and voltage management.

I will now hand over to Marco for the financial results. Thank you.

Thank you, Gianni. Turning to slide 8, you can see the solid financial performance delivered in the first quarter of 2026.

EBITDA reached €1.6 billion, representing a 14% year-on-year increase, like Gianni was mentioning, while net income amounted to €0.7 billion, up a strong 24% compared to last year. Net debt increased by €0.5 billion to €10.6 billion, with the net financial debt to EBITDA ratio remaining stable at 1.8 times.

Moving now to slide 9, if we now focus on the main drivers behind the strong financial performance, EBITDA reached €1.6 billion, up 14% year-on-year, supported by, first, the Networks EBITDA increase by 45%, representing approximately €200 million, mainly supported by the new regulatory framework and the effect of positive previous years settlements from the update of some remuneration parameters. Generation and Supply EBITDA remained almost flat, driven by, on one side, stable renewables EBITDA, that reflecting better volumes in the quarter, offset by the negative price effect from lower references; on the other side, flat customer EBITDA, with resilience in gas business and power margin stability, although impacted by higher-than-expected ancillary services cost, as we commented before; and lastly, in conventional generation, EBITDA was almost flat, with the normalization of gas management margin offset by progress on the efficiency plan.

Now on slide 10, these dynamics are reflected in the performance of our integrated power and gas unitary margins. The free power margin amounted to €54/MWh, remaining flat year-on-year despite higher ancillary services costs.

Meanwhile, the gas unitary margin stood at €10/MWh, broadly in line with expectation, as it began to normalize from the exceptionally strong levels recorded last year. Moving now to slide 11 for the below EBITDA, net ordinary income came in at €0.7 billion, 24% up versus the first quarter of 2025, reflecting strong operational performance and improving the net ordinary income to EBITDA conversion ratio to 44%.

D&A remained flat at €0.6 billion, as the lower bad debt offsets the increased amortization linked to higher investments. Financial results almost flat year-on-year, lower cost of debt on one side that offsets the increase in average gross debt.

Finally, the effective tax rate stood at around 20.5%. Turning to the next slide, I'm on page 12 now, cash generation remained strong, with funds from operations standing at €1 billion and a cash conversion ratio of 65% FFO to EBITDA.

Over the period, net financial debt increased by €0.5 billion up to €10.6 billion. This reflects dividend payments of €0.5 billion, together with the execution of the share buyback program, which generated a cash outflow of around €300 million.

Gross financial debt rose by €1.2 billion, while the average cost of debt improved to 3.1%. Now, I hand over to Gianni for the closing remarks.

Thank you, Marco. As we look at 2026 as a year, we do so with confidence in the strength and resilience of our business model, reflecting a solid visibility on earnings across all activities.

We confirm our targets for the year in an EBITDA in the range of €5.8-€6.1 billion and net ordinary income between €2.3 and €2.4 billion, as supported by the following business drivers. Generation and Supply performance is sustained by a resilient model that relies on efficient hedging strategy, significantly mitigating the exposure on market volatility and enhancing earnings abilities.

In Network, results are driven by the new regulatory framework that gives certainties and by a successful management of the grid, with a continued focus on quality and reliability. At the same time, we remain fully committed on efficiency, that is a key driver to generate value, progressing steadily and in delivering an effective plan.

To conclude the presentation, we would like to highlight the priorities that need to be addressed in order to meet the upcoming energy challenges. The current global context reinforces a clear message: accelerating electrification and efficient renewable development within a decarbonized mix is the most effective way to protect consumers and economies from geopolitical shocks, particularly in Europe.

Electrification is not only central for the energy transition and for the environment, but also to long-term affordability, resilience, and security of supply. In parallel, investments in electricity networks need to be accelerated to accommodate structural demand growth and to ensure system reliability.

Grids are the bottlenecks of the transition, enabling renewable integration and strengthening overall system security. To make this possible, regulatory support is essential.

In particular, approval to increase investment cap is critical to unlock CAPEX required in distribution network, and stability of regulation is even more important. Thank you for the attention.

I will now hand to Marco for the Q&A session.

We start with a round of questions from our analysts, starting with the first question coming from Pedro Alves from CaixaBank. Please, Pedro, go ahead.

Good afternoon. Thank you for taking my questions.

Three, if I may. The first one on the Spanish royal decree on the grid investment cap.

Can you tell us the current status of the royal decree, the approval process? Has there been any formal engagement from you with the ministry since the CMD?

Basically, I wanted to ask if you see a risk of the decree being eventually delayed, and if so, how would that affect your regulated asset base expansion trajectory towards your 2028 targets? Second question on ancillary services.

We are not seeing any sign of normalization in technical restrictions. Actually, Red Eléctrica data show quite the opposite.

I think that was actually another important increase in the previous months. Are these costs evolving according to your expectations in the plan and in your guidance?

How is this impacting your retail margins? Basically, and also, I wanted to ask if these extra costs are being progressively recovered in terms of customer pricing?

Last one, very quickly, just a clarification on the distribution EBITDA. Can you please quantify the effects of the settlements corresponding to previous years?

Thank you.

Okay. Thank you very much, Pedro.

Let me take the chance just to thank all the people connected now. It's very late.

It has been a long day for you guys, I know, a lot of events, and you still are together with us, thank you very much. Pedro, so, on the Spanish royal decree, we do expect to have news on that, I would say if not before the summer, after the summer, in any case during this 2026.

I guess that what we are seeing after the publication of the congestion on the different nodes around the cities, but in the different comunidades autónomas, clearly reflects the need for a development of CAPEX on the distribution side and on the transmission side. We guess that this should somehow trigger this decree that has been announced by the government last year.

We do expect this either before the summer or right after the summer. Question number 2 regarding the ancillary services.

Yes, you're right. There are no normalization signs.

Actually, all the opposite. Now, we should remember two things: that in the first quarter of last year, we had no blackout, of course, and generally, those tend to be months of deep impact, because prices tend to be a bit lower, generally the cost of ancillaries tend to be higher.

Having said that, this level of costs, it's somehow higher than the one that we were foreseeing. I would say that on one side, this is slightly higher, but then on the other side, I guess that if you look at the results of the first quarter, the operative performance of the group, it's really, really strong.

Despite this, that's probably is the only thing that is going not as expected. All the rest is really really compensating the rest.

Regarding distribution, just to give you an idea, the level of extraordinary there, it's around €100 million. If you have to net that on the number that you have, this quarter lands at 1.5 in terms of EBITDA.

Also that, I guess that it's a good indication of the good performance of the company. Thank you.

Thank you, Pedro. Next question comes from Javier Suárez from Mediobanca.

Thank you, Mar, and good afternoon, and congratulations to the new to the new CEO. Three questions.

The first one is on the demand evolution. On the slide number 6, I'm interested to see the underlying trend trends that you see on the market that justify the continuous increase on electricity demand that we have seen in 2025 also in 2026.

In this context, if the company can update us on any ongoing discussion with hyperscalers for the development of new data centers? Then, a second question is on the on the details on network saturation.

You can give us your latest detail of that level of network saturation in the distribution network that can justify the the increase on the existing regulatory caps on on CAPEX? The and the third and final question is on on the on the guidance that has been affirmed today after a very strong first quarter first quarter of the year.

The net income is representing more than 30% of the full-year target, I'm I'm just questioning myself the reason why the company is maintaining that this existing guidance, is that for the sake of being conservative at the beginning of the year, or there is any element that we should consider that should be making us being a little bit more conservative during the next in the next few quarters? Thank you.

Thank you, Javier, for the clear questions. I will try to be as clear as well.

On slide number 6, regarding what we are seeing on demand, I guess that just to give you a bit more of color, what we are seeing and it's there is that the problems on the Strait of Hormuz and the war is somehow impacting strongly industry. On the industry side, there has been a clear signal of reduction of demand, while on the other side, you know that the trends below the residential and services are still very strong and do not depend on that.

On the data centers and hyperscalers, I guess that here the news is that the new decree that somehow is trying to take away from the current demand the capacity demand that has been allocated the projects that do not have a real execution phase or that are not so much decided yet, we think that all this should somehow allow for the good projects, somehow allowing some space in the grid, and therefore giving potentially faster more space to project like the serious one coming from the hyperscalers. We should see this probably in few months.

Despite this, we still believe that clearly in the congestion, I go to question number 2, the congestion level all around Spain, particularly around the big cities, but now it's in entire comunidades autónomas, is so high, passing the 90%, that basically the need for new investment is there and should be done. We see positively the new royal decree, because somehow is trying to tackle the problem short-term, but this somehow we have to take the chance just to do CAPEX and resolving also problem medium and long-term.

Regarding question number 3, on the net income, well taken. The short answer is we are conservative.

This is the first quarter. I guess that it's early just to discuss about whether reviewing the 2026 targets.

Clearly, the quarter has been very solid, and therefore, but still, it's only the first quarter, let's wait. Thank you.

We move now to the next question coming from Javier Garrido from JP Morgan.

Hi, thank you, Mar, and good evening. I will have two questions.

The first is on the impact of the higher costs of ancillary services. There is a trade-off in between higher generation revenues and lower supply margins, but I would assume that you will continue, as you did last year, to increase prices to pass through the high ancillary services costs.

Is that a fair assumption, and if yes, when do you expect to neutralize the impact of these higher ancillary services costs on the integrated margin? The second question is if you could quantify what would be the impact for Endesa from the suspension of the generation tax in Spain?

Thank you.

Thank you, Javier, for the two question questions, actually almost three. On the higher cost of ancillaries, yes, you're right.

As we said, it's a bit higher of what we were thinking. As we basically are somehow marginally exposed, because on the other side, on the generation side, we do not recover all of this.

We are almost 30% of the market when it come to as a supplier, we bear the cost, 30% of the cost of the system, while when we move to the ancillary services, it's probably half of that. There is always kind of an exposure.

I would say that probably this is, just to quantify, still for the on the quarter, it's a a low number, it's few tens of million of million euros, but but that's that's the difference, and despite this, the result of the quarter has been has been very good. When it comes to how long does it take just to neutralize of this all of this, I guess that unfortunately, it takes time.

We started to do that, but we are exposed, and as we said when we presented the business plan, we were seeing this somehow recovered at the end of the plan, it takes us it's not a matter of months, it's more a matter of years, it will probably take a couple of years just to do that. When it comes to the last one being

on the on the

on the generation tax, yes. On the generation tax, basically all the all the changes that has been done as are kind of neutral to us.

The generation tax, the estimation is also there, I would say, what it comes to compensate this effect that I was mentioning on the higher ancillary costs, also there, a few tens of millions. Thank you very much, Javier.

Now, we have Robert Pulleyn from Morgan Stanley.

Hey, good evening. Thanks for all the questions, and welcome to Gianni, and thanks, Marco, for all the answers.

The first question, can we just clarify something? You mentioned a circa €100 million, I suppose one-off network resettlement.

Was that anticipated in guidance to be recovered this year, just so I understand whether that sort of contributes to the guide to the full-year cover or not? To be honest, actually, I think the other questions have already been asked, I'll leave it there.

Hi, Rob. Thank you very much for the question.

I would say that we were not expecting this level when we set the guidelines for the 2026, just to be clear on that.

Let me add what is the source of this let's say anticipated or non-anticipated comings. We worked a lot on transparency of our regulatory certifications, and this has effectively an impact on the years that have been certified, and we have, let's say, a recovery of the certification of the previous years that is coming with slight delay, and the last one was what year?

The last one was 2022, and we have now a proposal of a final settlement of 2023.

Of 2023. We have been working a lot on our documentation that we sent to CNMC, and this is starting to work out.

The other element is linked to the change in the incentive scheme based on quality and losses, which, of course, is a pie that has been shared between all the different players in the market, and so part of this is depends on our performance, but also on the performance of the others.

By the way, guys, I guess that truly shows how is on the ball our new CEO, absolutely fully in...

It's my previous activity.

Exactly. On the other side, that also shows how beautiful it is to go live on this stuff, just to really get a feeling on things.

Thank you.

Next, and I guess that is the last question from the call, is Alberto Gandolfi from Goldman Sachs.

Hi, thank you for taking my questions, and welcome Gianni as well. Two questions are: one is on the churn rate.

Can you tell us what are you seeing lately on the churn rate? Is there an acceleration before the phone, for a lack of better word, poaching is about to end, or quite the opposite, has the volatility in commodities, which not really impacted electricity prices in Spain, but has that had an impact on the churn rate?

If you can tell us what's going on and what you think is going to happen in the next few months? The last one, just to be really, really, really clear: Networks, last year, in the full year, you had about €100 million, let's call it kind of non-recurring, and now there's €200 million.

I'm trying to understand, what is really the earnings power of this business before one-offs, regulatory compensation from previous years? Should we think this year underlying as €2 to €2.1 billion EBITDA, and we use this as a basis for forecasting future years?

It's quite important we manage to clean this up, if you don't mind. Thank you so much.

Thank you, Alberto. On churn, yes, we have seen in the market a super high level of churn.

We were anticipating that, given the new royal decree that somehow will try to prevent the high level of fraud that was on there, and given that it gets into operation in few months, the level has been very high. Now, very, very recently, we are seeing this changing a bit.

It has been spiking, and now just reducing. I don't know whether they're preparing for what is about to come.

Then, on Networks, yes, you're right, when we presented the plan, we basically carefully set as a new reference approximately €2 billion for Networks, because there were €100 million of extraordinary there, just to set the new number. I would say that probably now you can assume that the 2.1 you were somehow mentioning.

Thank you. At this point, we have tackled all the questions.

I have received some through the web, but most of them have been addressed. Just one follow-up question coming from Pedro Cuadrado, JB Capital, okay?

He's asking about the evolution of the ancillary services, in particular the cost of the ancillary service during the first quarter. How do we expect the evolution during the year?

If we have in mind if it should be passed as a regulated cost? Thank you.

Okay.

Thank you for the for the question. Here on ancillaries, we were mentioning before, the first years the first months of the of the year generally are the ones with the higher impact, particularly when when the cost of the when the cost of electricity is kind of lower.

You can clearly see at page 5 in in February, for example, but also somehow in March. It tends then to go to get lower along the year, we do expect that the evolution will be probably very similar also to the other to the other with the same seasonality that we've been seeing also last year.

In terms of whether this could be regulated, yes, we we think it should be. There's been, I guess, on this at least 80 suppliers that have been somehow making this this this proposal.

It is like this in in the rest of Europe, apart from Portugal and Spain, and and particularly now, I guess that it's pretty much evident that this is a cost of the system, not not really a cost of the suppliers or somehow to be borne by by the suppliers. Thank you.

With this, we finish the presentation. Just to thank you, your participation, and as always, the IR team will be available in case you have any further questions.

Thank you very much.