Good morning, everyone. Thank you for joining Naturgy's first half 2026 results presentation.

I hope you're well. This is Abel Arbat speaking from the capital markets team at Naturgy.

Presenting today are our Executive Chairman, Francisco Reynés, the General Counsel to the board, Manuel García Cobaleda, the Global Head of Financial Markets and Corporate Development, Mr. Steven Fernández, and the Global Head of Control and Energy Planning, Ms.

Rita Ruiz de Alda. As usual, we will run through the presentation first.

Then open the floor to questions. Before we get into it, there's a small change in how we manage the Q&A session.

From today, we will have the opportunity to ask live questions through the conference call, while we also maintain the possibility to submit the questions in written form if you prefer. Okay.

A reminder that the questions should be only done by equity analysts and investors. At the end of the presentation, the operator will remind you of the mechanics to ask your questions live via the conference call.

Okay. With that, I will hand it over to our Executive Chairman, Francisco Reynés.

Hello. Good morning, everyone.

Thank you for taking the time to join us. It's a pleasure to address to all of you today on this first half results presentation for the year 2026.

Before going into numbers, I would like to spend a few minutes on strategic positioning because, as you may think, after this first part, we will then move to financials. First, global and second, business performance.

As a last part, we will look on the year and the half year ahead, 2026. Talk about how we are seeing the guidance for this year.

Therefore, if you allow me to ask you to move to page number four. Page number four.

Key messages of that page has to do about the recent changes in the company. Key messages we would like to give to you is, number one, the substantially increase on the free float, that today is about 46%.

Clearly, if you remember, it was one of the most important targets of our strategic plan 2025, 2027. It has been achieved just after a year that we launched the self-takeover in June 2025.

Second important message is about the overhang. During many months since that date, we have been suffering overhang concerns related to the position of certain large shareholders.

Now these concerns have been cleared. Third message, it has to do with the current shareholding structure that, in principle, is leaded by the market, over 46% of free float with two reference shareholders, CriteriaCaixa and IFM Investors, that are clearly aligned with a common long-term vision for the company with a clear objective to grow and add value.

As a consequence of these movements, we have simplified the governance and, as the most important outcome, the special majorities included in the bylaws of the company have been removed. The company now is more agile to take decisions of investments, disposals, financings, and other key business decisions.

As we said in the page number four, we are now very well positioned to take advantage of the strong balance sheet capacity that should help us to accelerate EPS growth. EPS growth, together with an attractive dividend policy, makes the value proposition of our company for shareholders, we think, very attractive.

Finally, as always, I think that we have been recognized by the market and it has been our most important objective to deliver our commitments, our track record of financial discipline, our track record in making the company more operationally efficient and, at the same time, delivering our commitment towards value creation objectives have been helping us, from our point of view, to start facing a new phase with very positive pillars. If we move to page number five, I wanted to remark there are many data here, but I wanted to remark why we think today Naturgy is well-positioned.

First, because of our diversified and resilient earnings profile. Second, thanks to our strategic gas and LNG infrastructure in Iberia that helps to warranty a sizable generation fleet.

Third, because this sizable generation fleet, together with a large customer base, help us through a vertical integration strategy. Fourth, with a quite balanced international generation portfolio, which 84% of the output is regulated, as you know, that removes any concerns of volatility.

Fifth, clearly proven track record on capital discipline, and today, around EUR 500 million per year savings on annual OpEx can be compared to the 2018 baseline that is leading us as the most productive and efficient utility in the European industry. Sixth, as I said before, an attractive cash yield and balance sheet headroom with a leverage which is around 2x EBITDA with an S&P FFO net debt metric of over 30%.

I remember to all of you that 18% is the threshold for maintaining BBB, which means we are clearly far above. Give us a very compelling, from our point of view, position for our shareholders.

If we move to the next page. We have been talking in the last presentations about the opportunity that an integrated model provides the company as a resilient platform for growth.

These pillars that come together in our integrated model are really one of the most important backbones of the company. Our presence across both value-added chains, gas and power, give us resilience, complementarity, operational synergies, and integrated margins.

This is clearly non-replicable in the case of the pure players. In electricity generation, we have flexible gas turbines and renewables vertically integrated in Spain and contracted in the case of our electricity generation plants abroad.

In electricity networks, we have a platform for electrification which we consider attractive regulated returns. In the case of the gas and LNG procurement, forming part of the energy management, we benefit from a diversified portfolio.

In gas networks, we play a key role in energy transition. We consider as it's demonstrated in many countries in Europe that these are enablers of renewable gases to be established.

Altogether, in the center of all our business, over 17 million customers, we provide integrated margin optimization. They help us to get a natural hedge across the whole portfolio.

In our view, this is what makes sense and generates worth much more than the sum of its parts. We'll move to the next page, please.

The platform we have today give us multiple organic growth levers across our core markets. We have also significant optionality to accelerate.

Let me specify some of them. In networks, our objective is to continue be investing on adequately remunerated and stable frameworks.

In Gas Spain, for example, the proposed 2732 new framework is continuity-based but introduces relevant incentives for digitalization and biomethane introduction. In electricity in Spain, for example, we expect very soon a lift on the investment cap that will allow us to invest more and quickly with an adequate remuneration.

In Latin America, the visibility continues to improve and consolidates a much higher level of profitability than we had years ago. On the renewable side, we see organic growth through hybridization, repowering, and storage.

These are the three key fundamental pillars of our organic growth. We have 1 GW coming online this year and over 2 GW more in 2027 onwards.

In these over 2 GW of new capacity, more than half of it is around batteries as a clear attachment to the existing renewable generation that will help us to capture higher prices and higher margin in the electricity delivery. On gas turbines, increasingly is a key actor in ancillary services, as you know.

We had almost 5 TW of energy in the first half. In Puerto Rico, 400 MW on a tender that we expect to get, in this case, news on the final decision by this summer.

Data centers. We have an opportunity to unlock value with limited capital, 900 MW already in projects under development, and 2 GW in our pipeline.

In renewable gases, we have the largest biomethane pipeline in Spain, with over 75 projects and more than 5 TW of energy. We see a context which is increasingly favorable, but we are seeing, at the same time, to support our positive vision, that we had introduction of mandatory biomethane consumption targets by the regulators.

On energy, on efficiency, sorry, further upside is expected in our new efficiency plan, which is supported by our track record, and in particular, through the AI as an enabled process optimization. Within that, artificial intelligence may help us to be even more productive and more accurate.

In summary, I would say that we have multiple organic growth levers across our core markets. If we turn to page number eight, I wanted just to show three important messages on this page.

As you can see, our metrics are clearly better than the ones we had in 2018. That's the reflection of a very tough work by the team in the last seven years.

Altogether, this is translated into between EUR 10 billion-EUR 12 billion of firepower that we are going to give us flexibility for any project based on two key restrictions. Number one is maintaining BBB rating of Standard & Poor's as a floor, and second, maintaining strict capital discipline on value creation.

I want to remark this idea. We are not a distressed buyer on any project anywhere at any time.

On page number one, to finish my part of the presentation, I wanted to address exactly the point I mentioned before as discipline for our investment criteria. What we are today is that any capital we want to deploy should be anchored in our famous value over size proposition.

We will guide by clear criteria, which are the following. Number one, in terms of portfolio and risk profile, we will focus on hard currency geographies with a clear bias towards electricity and regulated or vertically integrated assets.

In terms of growth and strategic fit, we prefer projects which embed organic growth, where there is clear, strong industrial rationale, and where we can achieve synergies as an upside. As it refers to financial discipline, we look for projects that are accretive in terms of EPS, with returns which are value accretive, clearly above our weighted average cost of capital, and consistent, again, as I said, on this threshold or BBB rating.

Finally, a very clear restriction for the management team is that we want to control and execute these projects, and to warrant that it may happen, we want clear control positions and clear alignment with our stakeholders. To summarize this first section, I wanted to remark again, the overhang is clear.

The shareholders are aligned. The governance is much simpler.

We have a strong balance sheet, and we keep the optionality under financial discipline way of thinking. With this strategic backdrop, I would like to hand over to Steven Fernández now, that will go through the consolidated financials.

Thank you for listening. I give the floor to Steven.

Thank you, Paco. Good morning, everyone.

Thank you for joining us. It's always a pleasure to be able to come to the market with very good results, and I think that what we have presented today in terms of the first half of 2026 are results to be proud of.

Not only are they good results, they're also results that allow us to upgrade our guidance for the full year. Overall, what you've seen today is a strong operational and financial performance despite the volatile environment.

In fact, the earnings growth of 6% is underpinned by the robustness of the integrated model that our Chairman has just exposed. We also continue to generate strong cash flow and continue to apply that cash with discipline.

This led to a decrease in net debt, although we remind you that net debt for the rest of the year should increase by around EUR 400 million, taking into account a one-off Sonatrach payment. We've also taken the chance yesterday in the board to approve the first dividend against the year results of EUR 0.60 per share, in line with what we announced last year, fully aligned with what we have presented in the strategic plan, and which will be payable on the 29th of July.

In headline terms, EBITDA reached almost EUR 3 billion. That's up from EUR 2.8 billion a year ago.

Net income rose to EUR 1.2 billion, up from EUR 1.1 billion a year ago. Obviously, you can tell from these numbers that we have now the confidence to confidently upgrade our guidance for the rest of the year.

We think about it in terms of the evolution by business, looking to page 12, and we think about it in terms of the EBITDA bridge, growth has been led by our regulated activities, which is also something interesting, and by thermal generation. These two contributions more than offset softer contributions elsewhere.

We think about it, for example, in terms of distribution networks, they added around EUR 180 million to the EBITDA line, and they were, in fact, the main driver of growth in the half. Remember that there is a one-off of around EUR 74 million that we flagged last year, and we also flagged in the Q1 included in this number.

Thermal generation contributed close to EUR 50 million on the back of strong ancillary services demand. As I said before, these more than offset the lower contributions from energy management, which is down around EUR 10 million.

Renewables, also down around EUR 10 million, and supply close to EUR 70 million down, which we will cover in Rita's presentation shortly. All in all, it's a broad-based delivery that reflects the diversification and the resilience of the integrated model.

We think about it in terms of cash flow, and that's on slide 13, the picture is one of continued strength and flexibility. Funds from operations remain robust at around EUR 2.3 billion, and the free cash flow after minorities reached almost EUR 1.3 billion, which have allowed us to fund the dividend while still reducing net debt from EUR 12.3 billion to around EUR 11.7 billion.

In this sense, it's worthwhile highlighting that our credit metrics remain solid, with FFO to net debt at around 30%, that's 3-0, which is comfortably above the 18% BBB threshold. As I mentioned, net debt, remember, will rise by around EUR 400 million in the second half of the year as a result of a one-off Sonatrach payment.

Even so, the balance sheet remains strong and gives us significant strategic flexibility, as the Chairman outlined earlier on. With that, I'm going to hand it over to Rita to go over the specific business units, and then we'll finish off with the outlook.

Thanks, Steven, and good morning, everyone. Starting with Gas Networks on page 15.

Gas Networks reported a total EBITDA of EUR 883 million in June 2026, representing a 6% increase when compared to 2025. Spain Gas Networks experienced the remuneration adjustments foreseen in the current regulatory framework, with lower demand when compared to 2025.

The new regulatory framework for the 2027-2032 period was published. This proposal maintains a parametric formula, providing continuity with the current model and also providing regulatory stability with a downside protection against demand variation.

The new remuneration model reinforces the strategic role of gas in the energy transition, while for the first time supporting the decarbonization of gas consumption through biomethane incentives. The next step is now for the Council of State to formally approve the remuneration framework.

If we move to Latin America, where we had growth across the different geographies. In Mexico, positive results mainly impacted by tariff reviews in our concessions implemented during the second half of 2025 and positive effects impact.

In Brazil, positive evolution because of regularization from prior periods, along with higher demand for power generation due to lower hydro production in the country and positive effects impact. We are now preparing the extension concession process expected in 2027.

In Argentina, tariff update compensated with currency depreciation and cost inflation, and in Chile, performance positively affected primarily by improved energy efficiency. As announced in the first quarter report, the regulatory review for the 2026-2029 period has already been published with a positive update recognition on the asset base.

In summary, growth in LATAM and improved visibility of the new regulation for gas distribution in Spain, which shows regulatory stability and continuity. Moving to electricity networks business, EBITDA reached EUR 637 million, up to 24% versus 2025 levels.

This extraordinary result is affected by a one-off remuneration adjustment and the regulatory reset in Spain. If we look to the different geographies in Spain, EBITDA increased 28%, supported by a higher regulated asset base and higher remuneration rates following the implementation of the new remuneration framework that was approved last year.

This result also shows an important one-off gain related to the recognition of operational maintenance remuneration corresponding to years 2021 and 2022 of EUR 74 million impact. This is indeed a retroactive remuneration.

In Panama, results positively affected by higher demand for high temperatures that compensated for negative effects evolution for the depreciation of the U.S. dollar.

The group has a strong commitment to the quality upgrade investment plan that is already reflected in improved operational quality metrics in our distributors. Finally, in Argentina, results driven by a new tariff review for the 2026-2030 period for the electricity business in San Juan that was published with positive tariff updates, but partially compensated by FX and cost inflation.

In May, another important key milestone was achieved with the 10-year renewal of the electricity concession in San Juan, Argentina. In summary, strong results were driven by the positive impact of the new regulatory framework in Spain, together with the recognition of previously outstanding remuneration.

Now turning to energy management on page 17. EBITDA reached EUR 513 million, which shows a stability in results when compared to 2025, mainly due to higher margins from hedged volumes that compensate for the termination in gas contracts in December 2025 that we already announced in the strategic plan.

The conflict in the Middle East contributed to higher energy prices and elevated market volatility through the first half of the year. Geopolitical uncertainty will remain a key market driver in the next months.

The group has a hedged position for 2026 but was able to capture opportunities from growing volatility, leveraging for this on our contract flexibilities, our LNG tanker fleet, and also on downstream positioning. As you all know, in June, the European Commission confirmed the ban on the long-term Russian LNG contracts from 2027.

This affects our contract with Yamal. Let me be clear on two aspects.

The first one is that security of supply to Naturgy clients is guaranteed, as Naturgy holds sufficient gas with free destiny clauses to cover our gas commitments in Spain and Europe. Second, this ban is structured as a force majeure event by the EU, which relieves standard take-or-pay obligation.

This is Manuel. May I add to that the European Commission flagged this measure as force majeure.

This basically relieves from the take-or-pay obligation of the long-term contracts. Secondly, for whoever is aware that today the European indexes, the TTF, peaked its high in the last two years and even surpassed mid-March when autumn started.

Probably this should make the European Union to review the ban system, because it has to be applied in a context quite different to the context in which they were decided, which was basically in autumn of 2025.

Thanks. Overall, performance in the business was supported by effective hedging and contract optimizations, together with a diversified procurement portfolio that guarantees security of supply to our clients in a context of uncertainty and volatility.

Continuing with thermal generation, EBITDA reached EUR 360 million. This is 15% over 2025 EBITDA levels due to higher activity in Spain.

In Spain, results improved, supported by stronger demand for ancillary services, where CCGTs have proven to be a backup technology amid increasing renewable penetration. Naturgy's fleet reliability, flexibility, and efficiency remain a key competitive advantage in the ancillary services market.

In LATAM, improved performance in the Dominican Republic offset the negative impact of the U.S. dollar depreciation and an operational incident at a combined cycle power plant in Mexico.

In LATAM, negotiations for PPA contracts covering our combined cycle fleet are still ongoing. We expect these agreements to be renewed by the year-end on terms broadly consistent with the current PPAs.

In conclusion, combined cycle gas turbines have consolidated their role as a backup technology in an increasingly renewable power system. Let's turn now to renewable generation on page 19.

Renewable generation reached an EBITDA of EUR 313 million during the period, 3% lower when compared to 2025 levels, with 360 MW of additional installed capacity. In Spain, results were affected by lower renewable generation due to higher hydro recorded and also a weaker price environment.

This was partially offset by the contribution of a new capacity commissioned at the end of 2025. Higher renewable output has resulted in downward pressure on wholesale electricity prices versus 2025 levels.

However, the group's vertically integrated position offsets partially this impact. In the United States, results are higher when compared to 2025, mainly due to high production and energy prices.

New capacity has entered in operation with a further 125 MW to be commissioned in this year. In LATAM, activity was positively impacted by improved output and margins in Mexico and Chile.

Finally, in Australia, increased output from the commissioning of new capacity, 316 MW added, but negative evolution of the mark-to-market valuation of existing PPAs under accounting criteria. Overall, renewable results were supported by the contribution of new commissioned capacity despite a lower price environment.

Selective growth continues with 360 MW added in H1 and further 700 MW expected to become operational in the second half of the year. Last, moving to supply, EBITDA has been EUR 319 million, 17% lower when compared to 2025 levels.

In electricity, the sector continues to face margin pressure, driven mainly by higher ancillary services costs. However, the commercial strategy has been adapted in order to reflect these new market conditions.

In addition, the impact of lower prices has been largely mitigated by the group's integrated business model and its contracted sales position for 2026. In gas, results were affected by lower industrial demand and reduced margins in regulated tariffs.

Meanwhile, the process to recover regulated tariff deficits remains ongoing. Overall, sector-wide margin pressure partially contained by the integrated model, both in gas and electricity.

I will now hand it over to Steven to take you through the outlook. Thank you.

Thank you, Rita. It's Steve again.

Let's turn now to the following slide to look at the outlook. When we start thinking about the outlook for 2026, I think it's worthwhile to start with the market scenario.

Forwards for the year for 2026 point to a certain stabilization, but it's fair to say that uncertainty remains elevated. Oil and gas benchmarks are above pre-conflict levels, and the Iberian pool prices are likely to stay volatile, largely driven by renewable resource.

In this context, our proactive risk management, diversified portfolio and operational flexibilities give us both protection on the downside and the ability to capture upside at no incremental risk. Recent events on the geopolitical front are, of course, not indicative of lower energy prices near term and fundamentals remain tight, as we will see on the next page.

In fact, looking a little further ahead, I want to spend a moment on next winter, because we frankly believe that planning for the winter 2026, 2027 must start now to mitigate the risk of shortages and price spikes. There are basically four dynamics worth highlighting right now.

One, the Russian gas ban removes somewhere between 10%-13% of EU supply at peak, and importantly, was approved when the market was still expected to be well supplied. Two, the Hormuz disruption has removed around 20% of global LNG.

Let me make that clear, 20% of global LNG, and there's no clear timeline for resumption. That into an already tight market.

Number three, EU storage is at its lowest level in five years, with limited economic incentive to refill given the TTF backwardation. And finally, let's remember that storage is highly weather sensitive.

That means that a cold winter, for example, as we have seen in the recent years, could risk shortages by February 2027. So essentially, the Russian ban was designed in a market of abundance, now facing a very different reality: low storage, Hormuz risk, and an already tight LNG market.

Planning must be made now ahead of the winter. If we move over then to close, I want to close where we began, where the chairman began really, which was delivery.

Reflecting our strong first half performance, we are upgrading our 2026 guidance with the key metrics revised favorably versus the consensus. EBITDA above EUR 5.5 billion, and net income above EUR 2.1 billion, both ahead of consensus.

Net debt now expected to close around EUR 13 billion, and a dividend per share of EUR 1.8 per share, implying a circa 6.2% yield at current prices. To conclude, Naturgy is entering a new phase.

We've cleared the overhang, we've strengthened our balance sheet, and we have disciplined growth optionality ahead of us. And all these are reflected in an upgraded guidance for the year.

We are well-positioned to navigate volatility, as you have seen, and above all, to create value for all our shareholders. As we approach 2027, we'll start working on a new strategic plan.

I may add, a new exciting strategic plan that reflects the company's full potential. Ahead of this new plan, as regards our 2025-2027 strategic plan, what we can say specifically as regards our guidance is that we feel comfortable with a EUR 5.3 billion EBITDA guidance and EUR 1.9 billion net profit guidance for 2027, assuming a worst-case Yamal scenario.

Again, EUR 5.3 billion EBITDA, EUR 1.9 billion net profit, assuming a worst-case Yamal scenario. In fact, we feel that there is more upside potential to these figures than downside.

And of course, we'll be updating the market on the 2027 guidance at the latest at the full year 2027 results, if not before that. With that, we'd like to conclude the presentation, and obviously happy to take any questions you may have.

Thank you.

Great. Many thanks, Steven, and everyone for listening.

Now, as we mentioned at the beginning, we will open the call to Q&A. As we pointed out at the beginning of the call, we have now given the opportunity to equity analysts and investors to do live questions through the conference call.

Okay. If you rather prefer to make questions through the webcast, you can also do so, but we encourage you to participate in the call and make your live questions through the call.

With that, I will hand it over to the operator. If you can please remind everyone of the mechanics to make the questions.

Please, operator, go ahead.

Thank you. Ladies and gentlemen, we will now begin the Q&A session.

If you would like to ask the question, please press star five on your telephone keypad. If you change your mind, please press star five again.

Please note that you may ask maximum of three questions per turn. Our first question comes from the line of Pedro Alves from CaixaBank.

Please go ahead.

Yes, good morning, and thank you for the presentation. The first question on energy management and the Russian LNG ban.

You mentioned no shortfall risk, given sufficient U.S. LNG volumes.

But replacing your long-term Russian linked cargoes with spot or U.S. indexed volumes will likely compress your achievable margins.

You commented also that for 2027. Can you please quantify the expected 2027 EBIT delta that you can see for energy management from this repositioning?

Could we be talking on a triple-digit million euro negative impact? Then somewhat related to that, we have seen news of the Spanish Prime Minister and other energy executives visiting Algeria, targeting higher piped volumes and LNG shipments.

Can you comment on how could this play out for Naturgy, and if this eventually is a real lever for additional volumes in the coming years? Then lastly, also on the energy management.

You are flagging gas storage at five-year lows, the TTF in backwardation and the potential risk of shortages, beginning of next year if we have a cold winter. Can you please share your level of hedges for next year?

If your hedging book leaves you in a position to capture still relevant upside from the potential price spikes that we may have and repricing of the TTF curve. Thank you.

If I'm correct, you have assumed that we would be buying some spot cargoes during the next year. What we have said is, with the current long-term contracts that we have, basically those coming from Algeria and the States, we have volume enough to supply all our end customers plus our power generation.

If your question relies on this assumption of having to buy relevant volumes of spot LNG, this is not the case in Naturgy.

Yeah. Just a quick reminder, because you're asking us to quantify the Yamal contract, and we don't quantify contracts.

What we can tell you is we feel extremely comfortable with the 2027 guidance that we provided at the time of the 2025-2027 strategic plan presentation. EUR 5.3 billion EBITDA, EUR 1.9 billion, and that is assuming a worst-case scenario from Yamal.

There is potential upside there, but we're not going to quantify how much Yamal contributes right now.

On the Algeria question, you may know two things. Number one, as we explained in the past presentations, the pipeline that connects Spain with Algeria, the Medgaz, where we participate together with Sonatrach as owners, is already prepared to increase its capacity by around 0.5 BCM or 1 BCM.

Depending on the pressure, 0.6 BCM-1 BCM. This is already prepared, and the relationship between Sonatrach and Naturgy is good enough to plan for increase this volume on the next winter.

The balance sheet that Steven has been speaking about on global EU gas situation has already considered that this volume is arriving. As you may imagine, with the whole volume that is required by the EU, this is a very small part.

The pipeline has intrinsically a physical limitation to pipe gas on circumstances that can be distributed later into the Iberian Peninsula. Therefore, this incremental capacity is due to the excess of pressure that is provided by the new compression stations, but there is a limitation because of the size of the tube.

Regarding our hedging position in 2027, we have our U.S. gas exposure fully hedged for next year, we do not have any hedging regarding Yamal LNG contract.

However, we will try to optimize our margins, taking advantage of our LNG tanker fleet and on our downstream positions as we did this year.

Next question, operator, please.

Our next question comes from the line of Alexandre Braunshausen from Bank of America. Please go ahead.

Hi. Thanks for taking the question.

The first one regarding Spanish electricity networks and the EUR 74 million one-off retroactive adjustment. I do not think we had any detail about the retroactive adjustment that you made in 2025, which I think happened in Q1.

It kind of feels that you disclosing a specific number means that this one-off was perhaps more meaningful than in previous years. Just wanted to get a sense of the delta here, and if we should expect something of the same magnitude or not in 2027, 2028, as you commented on the slides.

If so, given the regulation already in place, what would be the drivers of that one-off in 2027, 2028? Secondly, just regarding renewables, I think you are now targeting for 1 GW for the year, and that compares to, I think, a guidance of 1.2 GW that you had given at Q1.

The first question is why the decrease? Equally, why are you only targeting 2.1 GW over 2027-2030, which would mean a drop in capacity addition from 1 GW to 500 MW per annum, therefore not utilizing the strong balance sheet capacity that you have?

Last, and finally for my third question, I do note that regulation has been more supportive for gas distribution in terms of biogas injection targets. You do mention some potential support in terms of consumption of biogas.

I'm just wondering if there's any more data or specific regulation upcoming or announcement from the government that we should look out for your EUR 700 million of CapEx in biogas production, onto which I think you still have not taken a FID for 2027. Thank you.

Let me start on the renewable side first as a strategic view of how are we approaching the renewable CapEx program. Point number one, as you can imagine, as time goes by, the adaptation of the calendar of real investment to our objectives are made more solid than today.

We are forecasting the figures we mentioned to you, which are based on the figures you mentioned, but taking into account that six months of the year had already gone, and for the next six months, we see how the delivery of equipment and the delivery of permitting, et cetera, may incorporate these gigawatts in operation. Point number two, the reason why the figures are not matching and are decreasing a little is because as a consequence of our constant adaptation of our prognosis of electricity prices that are making the projects more or less profitable.

We have been saying, every presentation for us, value matters more than size, therefore, the investments in renewables should be also linked not only to the obligation of increasing number of megawatts in place, but also that these megawatts are profitable. Therefore, we have been discarding certain projects that at the present circumstances are not as profitable as we thought they were a couple of years ago.

The adaptation of our figures is a consequence of the evolution of the reality of the market. On electricity distribution, in general, not only about electricity distribution, but in general, the problem of comparing apples to apples in terms of all the figures is that in our business, because decisions by the regulator has not taken exactly calendar year by calendar year, we have always a very small part of our results that include one-offs.

The reality is that every year we have certain one-offs, but in comparison, the delta is negligible, is less than 2% of the total EBITDA figures. In our 2026 first half results, we have certain one-offs in electricity distribution compared to last year, which are around EUR 70 million in total.

We also expect new one-offs in coming years because of decisions that are taken late by regulators and adapting. As you have seen, our accounting policy is more conservative than aggressive, and one-offs are normally being positive and neither with negative impacts.

On gas regulation, I can tell you, the gas regulation is not finished yet. It has been pre-approved by the State Council.

We cannot comment on precise figures till they will be fully released, and even less for 2028 that we haven't shared any figure for the whole company. Our commitments on figures are finishing with the strategic plan 2025-2027.

Next question.

Next question, please, operator.

Our next question comes from the line of Arthur Sitbon from Morgan Stanley. Please go ahead.

Hello. Yes, thank you for taking my questions.

The first one is on the comment that you made on the 2027 targets, the EUR 5.3 billion EBITDA, EUR 1.9 billion net profit minimum. You were saying you are extremely comfortable with that, even assuming a worst-case scenario for Yamal.

I was wondering if you could provide a bit more detail on what would be this worst-case scenario for Yamal, and what would be the range of possibilities between that worst-case scenario and a status quo of, which as I understand is ruled out now, but of still having the volumes of that contract. That's my first question.

The second one would be on net income growth. I understand that you will present a new strategic plan later on, I was wondering if the current level of net income for 2026 is something that you are comfortable to grow from, even without M&A, or if to be able to deliver higher net income than in 2026 in, let's say 2028 or 2030, you necessarily need to conduct an acquisition.

Thank you very much.

Thank you for your questions. Steve here.

Worst case, Yamal means no volumes. Okay.

As regards to net income, you're asking us to go beyond 2027. We've given you a guidance for 2027 in line with our strategic plan, which is EUR 1.9 billion.

What we've said during the call is that we feel comfortable with that level of net income, even in a worst-case Yamal scenario, which I just mentioned includes no volumes coming from Yamal. I also mentioned that we see upside to these figures, the EUR 5.3 billion EBITDA, EUR 1.9 billion on net profit.

Going beyond 2027, i.e. 2028, 2029, 2030, give us some time.

We promise we're working on a new strategic plan that we'll present to the market, where we will provide you with sufficient visibility so you can actually test us in terms of the credibility. I think we've gained some credibility in the market since 2018.

Every single time we've provided guidance, we've met, we've actually exceeded it. Right now, on the 22nd of July of 2026, we're not going to be disclosing guidance for 2028, 2029, 2030, or beyond.

Next question, operator, please.

Our next question comes from the line of Alberto Gandolfi from Goldman Sachs. Please go ahead.

Good morning. It's Alberto.

Thank you for taking my three questions. Going back to your very helpful slide seven, where you talk about the organic growth levers.

My first bet, but I suspect, given, Steven, what you just said, you're not going to reply, would be, is there any chance you can help us understand underlying organic growth by Naturgy before any M&A? If you start from EUR 1.9 billion or EUR 2 billion, you said there is upside to 2027.

Is slide seven telling us there is a low to mid-single-digit EPS growth before M&A? If you don't answer that, my backup would be, is there any way you can quantify how much CapEx slide seven implies between 2027 and 2030?

You were very clear on slide eight to talk about up to EUR 10 billion-EUR 12 billion balance sheet headroom. This is very clear.

I wanted to ask you, is there more we need to think about? Is there a portion of the business that, given the right opportunity, you might be willing to rotate?

Maybe your total transformation is not EUR 10 billion, maybe it's closer to EUR 20 billion. That's what I was thinking.

The last question, very quick, number three. Still on slide seven, you talked about 900 MW projects under development, data centers, plus a 2 GW pipeline.

Any chance you can give more granularity on what you're specifically doing there? Is this connection point?

Are you thinking about PPA? Are you thinking about being part of a wider project in a JV?

What would be your business model here? Thank you.

Thank you. Thanks, Alberto.

It's a good try, though. It's a good try trying to come up with an estimate for net profit beyond 2027.

Wait until we provide you the details, right? We can say, I think comfortably is that a normal run rate for CapEx for the company would be comfortably at around EUR 2 billion a year.

That would be, I think, a baseline that you could work with. We're always looking for ways to increase that.

In terms of the balance sheet headroom, the question is whether or not we would be considering any asset rotation. First and foremost, the figure that is included in the presentation, EUR 10 billion-EUR 12 billion, does not include any asset rotation.

Correct? This is simply an exercise of re-leveraging.

As to whether or not we would be open to the option, we've always said that we have no sacred cows in the company, and obviously, everything depends on price. What I can tell you, nonetheless, is that we are clearly on a growth mode as opposed to a shrinking mode.

If someone comes in with an offer that we cannot refuse, then obviously, I think we all have a responsibility to bring it to the board and analyze it then. As regards to the development of the data center opportunity, the model that we are focusing on right now is a power land model, and coupled with a PPA, long-term PPA contracts with off-takers.

We are not, at this stage, thinking of taking up equity in data center projects, but rather monetizing some of the prime locations that the company has. Here we continue to develop the projects, be it through the acquisition of land where we have to, the engagement of off-takers.

There is a hurdle that we need to clear for us and for everyone else in Spain that is not developing data centers off grid, and that is the development of the new reglamento, the new regulations, which we expect to have cleared by the government, hopefully before year-end. That is a clear catalyst for us to move forward with some of the projects that are in a more advanced stage.

Next question, please.

Our next question comes from the line of Peter Crampton from Barclays. Please go ahead.

It is Peter Crampton here from Barclays. Congratulations on today's results and guidance raise.

Two questions, if I may. One is around the Capital Market Day or kind of an event where you kind of update on strategy and targets, given a lot has happened over the last year.

Is there any idea on kind of rough timing when this could be? Secondly, just taking the big step back, is it correct to assume that, obviously because next year you have more unhedged volumes, the trends you saw in the first half, obviously one could extrapolate even more positively to next year.

Thank you.

On the Capital Market Day or our Capital Market Day, we understand the interest. Again, we are going to be developing a new strategic plan throughout the course of 2027, because, as you understand, our current strategic plan ends on the 31st of December of 2027.

We have to have some visibility for 2028 and forward. I think it is a safe bet that next year we will be coming to the market, and when we have a clear picture of the timing, we will obviously give you a heads up so everyone is organized there.

In terms of potential upsides for 2027, We provide the market with guidance at the time of the full year results. In this particular case, we have mentioned that this is going to be at the latest, so there is a possibility if we have more visibility of providing you more guidance for 2027 in the Q3 numbers later this year.

We emphasize, we feel very comfortable with EUR 5.3 billion of EBITDA, EUR 1.9 billion of net profit, assuming a worst case Yamal scenario. And again, we see more upside than downside to those figures.

Be patient, okay. We are a company that prides itself in delivering on its commitments.

We will provide you more tangible commitments in the coming months.

Thank you. Next question, please.

Our next question comes from the line of Javier Suárez from Mediobanca. Please go ahead.

Hi. Good morning.

Good morning all. Three questions from me as well.

The first one is on increasing the guidance by EUR 200 million. You can help us to understand the different components of this increasing guidance.

I guess that there is a component of higher natural gas prices, also better FX. You can help us to understand the different moving pieces that has led you to increase this guidance by, again, EUR 200 million.

On the firepower, that has been quantified over EUR 10 billion. In slide number nine, you are giving some details in preference for electricity, but open to selective gas acquisitions as well.

My question is, which is your interest on brownfield renewable asset, and how this opportunity to acquire renewable energies compare with investment on regulated assets in the western world? I'm also interested in your view, that is the third question, your view on the profitability of investing in new battery systems and your latest thought on the hydrogen opportunity.

Thank you.

Okay. For the first question, obviously, we have a more supportive energy price environment this year than expected.

Remember that at the beginning of the year, prices were close to EUR 27 per megawatt-hour for the year. Second, we also have a more favorable FX outlook in LATAM than we were expecting, in Argentina, in Mexico and in Brazil.

Finally, we also had stronger than expected CCGT performance in auxiliary services. That reinforces our view that CCGTs are essential in assisting with increased renewable penetration.

These are the three main impacts that made us review our estimations for the year.

Hi, Javier. I think you were asking about the potential interest or views that we have on brownfield renewables.

We have looked, and we are looking actively at brownfield renewal opportunities, but only those markets where we can actually export or already have the integrated model. Correct.

Also, when thinking about standalone growth in renewables, we have to be mindful. We are not technology agnostic, so we have a clear preference towards wind as opposed to solar.

It's also very important to understand, as I mentioned before, that we are looking for that vertical integration, right? When thinking about renewals, bear in mind that one of the things that we like about the company, and it's by design, is that we are well balanced.

We're not long generation, we're not long clients. We have a clear balance in marginal generation with clients.

When thinking about opportunities as well, that's something that we have to be mindful of. The chairman mentioned in slide nine, the first point was the portfolio and the risk profile.

What we are looking to do when approaching growth opportunities is to improve the company's business risk profile or overall business risk profile. Those are some of the questions that we ask ourselves, is by doing acquisition A or B, what does the resulting company look like?

Buying large exposure to standalone renewals without accompanying clients would necessarily shift the risk towards higher risk versus what we have right now. Therefore, naturally, we'd look to ways to offset that, and if we can't, then those investment opportunities would rank lower than some of the other ones that we're looking at.

Speaking of which, you asked the question about our views on hydrogen. We like hydrogen.

We think hydrogen is the future, it's the long-term future. It's the future of the future.

We think we have to bridge the gap between the current economy and a hydrogen economy, one way we think we bridge that gap is through renewable gases, that's why instead of focusing on hydrogen, we're focusing on biomethane, because we think that's what bridges it right now. In fact, you've seen the Spanish government, for the first time in a while, finally present some incentives for the introduction of biomethane.

We think that is encouraging. In terms of battery systems, we are investing in battery systems in Naturgy, specifically every single new facility on the renewable side that we're building right now has battery systems coupled with them.

We think they're going to be playing an increasingly important role, specifically as we start moving towards capacity payments. Yes, we would agree that this is an area to continue investing in, as we're doing right now.

Excellent. Next question, please.

Our next question comes from the line of Gonzalo Sánchez-Bordona from UBS. Please go ahead.

Good morning everyone, thank you for the presentation. I have two questions.

One is a quick clarification on the worst-case scenario that you mentioned earlier on the Yamal for the 2027 guidance. My question there is, you said that means no volumes from Yamal, I just want to make sure that you are not including any potential take-or-pay penalties, or I don't know what is the right word to call it.

Basically, it's no volumes, but no further impacts than not getting the volumes. That would be the first one.

On the second one, I appreciate that you will not provide guidance beyond 2027, this is more of a qualitative question. It's regarding your very good performance in the past few months/quarters on the CCGT fleet in Spain, obviously benefiting a lot from ancillary services, which partly are driven by the growing renewables penetration.

I guess partly it's also driven by the reinforced operation of the grid post-blackout last year. I guess my question is, how do you see that evolving going forward qualitatively?

Do you think, as more renewables, more batteries come to the system, that can remain stable, go up, go down, or basically any thoughts on that front? Thank you.

This is Manuel. On the take-or-pay consideration, precisely the force majeure, or the basic consequence of raising force majeure and being allowed to raise force majeure against the other party, is that you get released from your take-or-pay obligation, and hence for any payment related to the take-or-pay.

Regarding the batteries installation, how this impacts on the ancillary services, this is more in a medium, long-term view. We are expecting capacity payments to be approved by the government once they got the authorization from the DG Competition of the European Commission.

We expect to see them by the beginning of the year. This won't change very much the ancillary services market as we know it.

It will just be a payment to be available and to have the combined cycles properly maintained. This doesn't change in any way the ancillary service system that we have.

It's true what you say, that there's a correlation with the renewables penetration. We've been seeing this in the last three, four years.

The mention that you made to the reinforced operation, at this point, we don't think we can continue to speak about reinforced system, because now it becomes the ordinary way of running the system. Somebody could think if this way of running the system shouldn't have been already in place before the incident of April 28th.

Basically, it's not a reinforced operation of the system. It's the system that is required by the volume of renewables penetration that is in place before April 25, and not only after April 25.

Thank you, Manuel. I think there's one last question.

Operator, if you can pass it through.

Thank you. Yes.

Next question comes from the line of Fernando Abril from Alantra. Please go ahead.

Hello, good morning. Thank you for taking my question.

Just to follow up on the M&A front. We've recently seen one of your peers use M&A to enter a new regulated networks market.

Would expanding into a new European geography through the acquisition of a regulated network asset be something you would also consider as part of your inorganic growth strategy? Thank you.

Hi, Fernando. The answer is yes, provided that it meets the criteria that we outlined in slide nine, right?

I think there's also an element of size, right? Getting a small footprint in a small European country with limited growth potential is something that would make us look in potentially another direction, right?

As a general rule of thumb, if it meets the four criteria that are outlined in page number nine of the presentation, yes, we'll look at it. I think we've been clear on point one, bullet one.

We're looking at hard currency geographies, Europe, North America, with a bias for electricity, regulated or benefiting from vertical integration. Those are the rules of engagement that we've set ourselves, and that's where we're spending our time, actually.

Many thanks, Steven. I think this concludes the online questions.

There are no other questions through the webcast. I think most of them have been addressed and well covered during the conference call.

Thank you very much for joining and listening. The markets team remains available for any follow-ups or any additional concerns you may have in the coming days.

Other than that, many thanks, and have a good summer, everyone.

Thank you.

Thank you.