Iberdrola, S.A.

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

As is customary, we will follow the traditional structure of our events. We are going to begin with an overview of the results and the key developments during the period.

The presentation and the Q&A part will be delivered by the top executive team joining us today: Mr. Ignacio Galan, Executive Chairman; Mr.

Pedro Azagra, CEO; and finally, Mr. Pepe Sainz, CFO.

After the presentation, we'll move on to the Q&A session. I would like to remind you that we will only be taking questions submitted through our website.

Please send your questions exclusively via www.iberdrola.com. Finally, we expect today's event to last no more than 60 minutes.

Should any questions remain unanswered, the IR team will, as always, remain fully at your disposal. We hope that this presentation will be useful and informative for all of you.

And now without further ado, I would like to hand the floor over to Mr. Ignacio Galan.

Thank you once again. Please, Mr.

Galan.

Thank you, Ignacio. Good morning, everyone, and thank you very much for joining this conference call.

In 2025, reported net profit reached EUR 6,285 million, up by 12%, even excluding EUR 464 million noncash charges to adjust the value of our renewable pipeline in different countries. Excluding those charges, net profit will reach EUR 6,749 million.

Adjusted net profit, which, as you know, exclude the impact of capital gains increased by 10.3% to EUR 6,231 million above our guidance. Adjusted EBITDA rose EUR 15,684 million, up 3%, with 21% increase in networks, reflecting our high regulated asset base in improving framework in our core geographies, partially offset by nonrecurring impact of ancillary service costs in our power business due to the reinforced system operation in Iberia as well as lower prices.

Total investment reached EUR 14.460 billion with 2/3 allocated to transmission and distribution networks, driving 12% growth in our regulated asset base in just 1 year to almost EUR 51 billion. In Power & Customers, we added 2.7 new gigawatts in operation, and we have 4.7 gigawatts more under construction that will start producing next quarters.

This strong expansion was combined with a further improvement in efficiency, thanks to an increase of only 1% in our current recurring net operating expenses, well below gross margin. And financial strength with net debt down EUR 1.5 billion, driven by an 8.2% increase in our operating cash flow, up to EUR 12.811 billion.

This positive impacts of our asset rotation and partnerships plan and the capital increase last year, improving our FFO and adjusted net debt ratio to 25.5%, comfortably in the range of BBB+ rating. Finally, yesterday, the Board decided to propose to the General Meeting a total dividend of EUR 0.68 per share.

As you can see, 2025 has been a transformational year for Iberdrola, thanks to the implementation of our strategy. In the last 12 months, we have a remarkable progress in all the pillars of the plan we presented a year ago.

Reinforcing our focus in networks infrastructure with transmission as new growth vector in the U.K., where we have secured EUR 14 billion of TOTEX for the next 5 years under RIIO-T3, including [ submarine ] interconnection like Eastern Green Link 1. In the U.S., after the commissioning the NECEC interconnection between Massachusetts and Canada and now also in Australia, where we were recently awarded EUR 1.2 billion line in the state of Victoria as we expect it to complete by 2030.

On top of that, we have also continued increasing our distribution investment and progressing in the definition of new frameworks for the coming years in all our countries, mainly in Brazil, where the regulator has already approved the renewal of our distribution concession for 30 years, more providing us visibility up to 2060. In addition to organic investment in the asset rotation transaction completed in 2025, have also confirmed our strategic focus on networks, mainly due to the acquisition of Electricity North West now fully integrated and the purchase of Avangrid and Neoenergia minorities.

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

Thanks to our performance in 2025, we are facing 2026 at the beginning of new growth phase. But before that, and given that we are from Bilbao, let me share with you the few figures that show our transformation over the last 25 years.

Since 2001, we have multiplied our total asset base by 8x to EUR 161 billion, driven by the expansion of regulated networks asset base to EUR 51 billion, 10x more than 2001. Our generation capacity from 16 to almost 60 gigawatts today.

And our storage capacity was multiplied over 3x, thanks to the investment made in existing hydro turbines to make them reversible, new pump storage facility, like Tamega, and battery project across the world. On top of that, our international expansion has fully transformed Iberdrola from utility based in Spain with just 1% of our activity in other markets in 2000 to a global utility with 65% of our business in the U.K., U.S., Germany, France, Brazil and Australia.

As a result, we are reaching our 125th anniversary, consolidated as the largest utility in Europe and 1 of the 2 largest worldwide with a market cap above EUR 135 billion, 12x more than 2001, even after paying EUR 47 billion in dividends across the last 25 years. And you can be sure that the key pillars of this growth story were our vision, our strategic [ coherence ], our ability to anticipate the structural shift in the sector across our access to financial resources and supply chains and our track record of execution.

Are also all of them, the best guarantee to sustain growth in the coming years. We are demonstrating we are a company that always we fulfill our promises, even we overfulfill our promises.

We overdeliver what we promised. It's a bit different with others, with they are promising, they are not delivering as much as they are promising traditionally.

Moving to 2025 result, adjusted EBITDA reached EUR 15 million -- EUR 15.684 billion with 2/3 coming from international business. The United Kingdom contributed with EUR 3,306 million and U.S.

EUR 2,662 million; Brazil, close to EUR 3 billion; and the EBITDA from other European countries and Australia reached EUR 791 million; with Iberia contributing the remaining EUR 6 billion. As a result, 81% of our group EBITDA is already coming from A-rate countries.

By businesses, Networks adjusted EBITDA grew by 21%, thanks to higher regulated asset base in all countries, new tariffs in the U.S. and Brazil and the consolidation of Electricity North West, while renewable power and customer EBITDA fell by 10% as a result of lower market prices and the impact of the so-called reinforced operation implemented by Red Electrica in Spain, partially offset by the addition of 2.7 gigawatts of new installed capacity worldwide.

Total investment reached EUR 14,460 million due to the acceleration of organic growth and the acquisition of Neoenergia minorities in Brazil. By countries, investment increased by 34% in the U.K., driven by 47% rise in networks due to the new transmission project and the ongoing investment of Scottish distribution Manweb and Electricity North West.

U.K. investment in power also increased by 21%, mainly in East Anglia THREE offshore wind farm.

In the U.S., investment increased by 2% as the growth in transmission and distribution more than offset the slightly lower investment in power after the completion of projects under construction. Combined, U.S.

and U.K. contributed 60% of total investment, with 70% allocated to Iberia, 14% up to Brazil and 9% to other countries, mainly Australia, where investment more than doubled year-on-year, offsetting the decrease in Germany and France as offshore projects are put in service.

By businesses, Networks reached EUR 9 billion, almost 2/3 of the total, with 13% growth in organic investment, mainly in U.K. and Spain.

And the U.S. and Brazil, where the increase in distribution has more than offset the completion of transmission project.

Our regulated asset base increased by 3% to EUR 51 billion with transmission already represented today 25% of our total network assets. And this pattern will continue in the next years, reflecting the progress made in our regulatory frameworks and the construction of new projects.

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

In the United States, Avangrid benefiting from higher rates and the rising contribution to result of new transmission project that will accelerate 2026, thanks to the commissioning of our interconnection line between Canada and Massachusetts, adding EUR 125 million per annum to group EBITDA. In Spain, the new remuneration methodology for the period '26 to '31 has already been published.

While in Brazil, the regulator has approved the renewal of our distribution concession for 30 years up to 2060, and Neoenergia has completed this transmission project with a total contribution of EUR 250 million to EBITDA per year. Finally, Iberdrola Australia was awarded as a transmission line in the state of Victoria with an investment of EUR 1.2 billion up to 2030.

They will increase significantly our footprint and result in the country, and we continue developing a pipeline of additional transmission projects in another different states. In Power & Customer, we invested EUR 5,260 million, well spread across the U.K.

and the U.S., Iberia and other countries. By technologies, we invested EUR 1.7 billion in onshore wind, EUR 1.4 billion in offshore wind, EUR 1 billion in solar and EUR 1 billion in storage and retail.

We have already put in service 2,710 megawatts of onshore and offshore wind, solar PV and storage. And we have 4,679 megawatts under construction as well a pipeline of more than 9,000 megawatts ready for 2028, more than enough, of course, to secure all the new capacity expected in our plan.

Regarding routes to the market, we have also sold all our production for 2026 with an attractive mix of regulated contracts with an average duration of 14 years. Retail customers and long-term PPAs, which already represent 2/3 of our total energy sales and will continue increasing, thanks to the ongoing signature of new contracts.

As a result, we have been recently recognized as the leading seller of PPAs in Europe and 1 of the 3 largest worldwide. Operating cash flow was up by 8.2% to EUR 12,811 million, reflecting the strong performance of Networks and the stable contribution from Power.

This rise in cash generation up to EUR 1 billion in just 1 year, together with asset rotation and partnership and the capital increase of last summer has allowed us to reduce our adjusted net debt by EUR 1.5 billion to EUR 50.2 billion even after the consolidation of Electricity North West and the acquisition of minorities in the U.S. and Brazil, improving even more our ratios with FFO to adjusted net debt reaching 25.5% and adjusted net debt to EBITDA down to 3x.

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

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

Thank you, Chairman, and good morning to everybody. '25 adjusted net profit reached EUR 6,231 million, representing a 10.3% increase compared to the EUR 5,651 million in '24 adjusted net profit.

Reported net profit was 12% up to EUR 6,285 million. 2025 net profit would have reached EUR 6.7 billion if capital gains had not been more than applied to adjustments in our Power division and as the Chairman has said, mainly in renewables.

As the main perimeter change, I have to say, ENW has been fully consolidated since March. Another thing to note for you is that the Mexico P&L and debt is included here for illustrative purposes because in our reported accounts, it is classified as an asset held for sale due to the expected closing of the transaction very soon.

FX evolution has had a minor effect on results, thanks to our FX hedging policy, with the dollar 4%, the pound 1.1% and the real 7.6%, all of them depreciated against the euro. Our EUR 6,231 million adjusted net profit is beating our adjusted -- our guidance and is close to the EUR 6,285 million reported net profit.

In this slide, you can see the details of the adjustments from '25 reported net profit to adjusted net profit. The EUR 379 million exclusion of U.K.

Smart Meters capital gain in Q3 is more than compensated with the EUR 464 million in adjustments in our Power division, which are write-offs in our renewable pipeline. And the network cost recognition one-off in the U.S., a noncash item, which is taken out from our adjusted net profit, is also partially compensated with the inclusion of the cap allowance in the U.K.

as it is a cash income. Adjusted revenues rose 0.6%, driven by the Network business, while procurements fell 0.7%, driving up adjusted gross margin by 1.8% to EUR 24.3 billion.

And here, we are excluding the cost recognition in the U.S. Networks.

Excluding capital gains from asset rotation accounted at the operating income and one-off efficiencies, '25 net operating expenses improved 4.1%, affected by lower storm costs that also diminished gross margin. Adjusted net personnel expenses rose 1.9% due to a higher number of employees, as the Chairman has commented.

Adjusted external services declined by 5.2%, mainly due to the EUR 350 million lower storm cost and adjusted other operating income increased by 10% compared to '24 due to the indemnities of past year costs, partially offset by the EUR 121 million negative impact of the East Anglia sale that -- it is compensated at the financial results. Excluding mentioned storm-related impacts and other adjustments, net operating expenses on a recurring terms grew 1%.

Analyzing the results of the different businesses and starting by Networks, its adjusted EBITDA grew 21% to EUR 7,794 million, mainly driven by the strong performance of the U.K. and the U.S.

and a significant last quarter improvement in Spain. Transmission EBITDA is up 28% to EUR 1.1 billion and distribution EBITDA 19% to EUR 6.7 billion.

In the U.S., the EBITDA reached $2,491 million, 73% more with higher rates in distribution and better contribution from transmission and positively impact since Q1 by the decision from the New York regulator that allows to register a regulatory asset under IFRS regarding past costs of $551 million. Taking out this effect, EBITDA is still up a remarkable 35% on an adjusted basis to $1,940 million.

In the U.K., EBITDA increased 28.7% to GBP 1,595 million, including 10 months positive ENW contribution and the growing contribution from transmission. In Brazil, EBITDA was up 13.8% to BRL 13,837 million, thanks to higher revenues in distribution due to demand inflation and increase in rate reviews over a higher asset base.

Transmission contributed positively with BRL 1.6 billion EBITDA, 56% up or BRL 583 million more than in '24 as all the lines have been completed. In Spain, EBITDA grew by 31% to BRL 2,015 million.

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

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

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

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

In the U.K., EBITDA grew 0.4% to GBP 1,536 million, considering the GBP 324 million capital gain from the U.S. -- from the U.K.

Smart Meters divestments in Q3. But adjusted EBITDA, taking out this capital gain, was down 20.8% to GBP 1,212 million, with lower prices and lower volumes in renewables and lower EBITDA from the supply business, driven by lower volumes.

Net operating expenses included GBP 108 million negative one-off impact linked to the East Anglia THREE sale, which is more than compensated at the net financial results. In the rest of the world, EBITDA grew 10.4% to EUR 796 million due to the higher contribution from offshore wind farms, St.

Brieuc in France and Baltic Eagle in Germany, but with lower contribution from supply business in Portugal, due to a EUR 30 million negative impact of the ancillary services costs as a consequence of the blackout. In Brazil, EBITDA fell 2.7% to BRL 1,283 million as a consequence of lower production and lower margins, but with a positive impact of BRL 297 million linked to the negative adjustment recorded in Q4 '24 following the classification of Baixo Iguaçu as held for sale.

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

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

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

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

'25 net debt, as the Chairman has said, is EUR 1.5 billion lower than the EUR 51.7 billion reported in the '24 year-end, reaching EUR 50.2 billion. This positive evolution was driven by the EUR 12.8 billion FFO generation, plus the EUR 4.6 billion as a result of asset rotation and East Anglia THREE debt deconsolidation and the EUR 5 billion capital increase, more than covering the EUR 12.6 billion CapEx plus the EUR 1.9 billion of Neoenergia PREVI acquisition and the EUR 4.6 billion dividend as well as a EUR 2.2 billion ENW net debt consolidation.

As a consequence, our credit ratios are strong for our BBB/Baa1 rating. Our adjusted net debt-to-EBITDA was 3.02x.

The FFO adjusted net debt reached 25.5%, and our adjusted leverage ratio was 43.8%, 1.6 percentage points lower than at the end of '24. Regarding our financing strategy, we delivered a year of unprecedented execution awarded by the IFR magazine as the best issuer in the world in '25.

In addition to the capital increase, Iberdrola signed EUR 16.7 billion of new financing under highly competitive conditions in different markets. We placed EUR 4.9 billion in bonds, achieving several milestones.

Our first green senior under the EU Green Bond standards and ICMA standards, a nondilutive green convertible with the high savings versus a senior structure ever in Iberdrola. Our lowest coupon among all hybrids issued in the euro market in '25 and the tightest spreads and Neoenergia and NYSEG.

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

In multilateral and development financing, we added EUR 2.5 billion, including green funding from the EIB, supporting next-generation investment and the first green loan granted by the National Wealth Fund to a European company to finance projects in the U.K. '25 adjusted net profit grew 10% to EUR 6,231 million, while reported net profit rose 12% to EUR 6,285 million.

Let me stress again that the net profit would have had exceeded EUR 6.7 billion if '25 capital gains had not been more than applied to adjustments in our Power division. Now the Chairman will conclude the presentation.

Thank you very much.

Thank you, Pepe. To conclude, 2025 was again a year with a strong operational and financial performance.

But above all, last year confirmed the transformational impact of our strategic plan based in network infrastructure as a key driver. In 2025, our RAB increased by 12% with attractive returns and visibility, thanks to our presence in countries like United States and U.K.

And we expect to continue growing in the coming years, both in distribution due to integration of Electricity North West in the U.K. and increasing investment needs in all geographies and in transmission, mainly in U.K.

and U.S. and Australia.

In Power & Customers, our selective approach focusing our core markets and our balanced mix of technologies allow us to install 2.7 new gigawatts in 2025 with 4.7 gigawatt more under construction and 9 gigawatts of projects ready for 2028. In addition, 100% of our energy is already sold for 2026, mainly through long-term PPAs and regulated contracts.

And we have continued expanding our unique portfolio of storage, which include hydro pumped facilities in operation capable of delivering up to 10,200 gigawatts per annum and a pipeline of battery and hydro pumped storage projects up to 7,500 gigawatts hour per annum. In 2025, we have also confirmed our commitment to financial strength with a reduction of EUR 1.5 billion in net debt to EUR 50.2 billion, following an 8% increase in cash flow generation up to EUR 12.8 billion, the execution of our asset rotation and partnership plan and the capital increase of last year.

Driven by the expected continuation of these positive trends in 2026 and the impact of new investment today, we are setting an adjusted profit guidance of more than EUR 6.6 billion in 2026. We will mean adding EUR 1 billion to our net profit in just 2 years, and we will put Iberdrola in the best position to exceed our guidance of EUR 7.6 billion for 2028.

But the growth potential of our business model goes far beyond 2028, given the unprecedented investment opportunities created by electrification. In the last years, electricity consumption has been growing faster than infrastructure, accumulating a huge latent demand that today is waiting to be connected.

Most countries are responding to this situation by increasing network investment and accelerating planning processes. But consumption is expected to continue increasing strongly in the coming years in heating and cooling, as more heat pumps are installed, transport, as the penetration of electric vehicles continues to accelerate in industry, especially in low temperature processes, creating the need for more installed power and storage facilities.

Generation technologies will be chosen by each country according to 3 main criteria: self-sufficiency, competitiveness and sustainability. Of course, this new production will also require a substantial upgrade in transmission and distribution networks.

On top of this, data and artificial intelligence have emerged as the last year as a new demand vector with a very large potential, mainly from technology companies, which are already Iberdrola's largest customers in our key markets, the U.S., U.K. and Continental Europe.

This already requires significant upgrades of generation and very especially transmission and distribution assets. And this virtuous circle of additional power demand and infrastructure is just starting.

Today, electricity is only 20% of the global energy demand, and this percentage is expected to grow strongly, boosted by new technological solution and the need for strategic autonomy and competitiveness. In Europe, for example, the commission expect that the share of electricity in total energy consumption will double in the next 10 years and triple by 2050, reaching 60%.

And we are in the best position to reaffirm our current global leadership in electricity infrastructure, which has become a new high-growth sector, thanks to the electrification, as we anticipated 25 years ago. Since then, we have been implementing a consistent strategy based in expansion of networks, selective investment in Power and access to customers through all route to market, including the most sophisticated instrument like multi-country PPAs.

The EUR 170 billion invested in the last 25 years have allowed us to multiply our asset base by 8x and expand our geographical footprint to several countries, mainly in the U.S. and the U.K.

to become the largest integrated utility in Europe and 1 or 2 largest worldwide by market capitalization, always preserving our commitment to BBB+ rating, thanks to our financial discipline and our ongoing access to market and liquidity. Our size, diversification and solidity are the best guarantees to secure access to supply chains, technology and the best talent and skills and to maintain our track record of shareholder return more than 1,800% over the last 25 years and sustained growth in results.

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

Thank you.

Thank you, Mr. Galan.

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

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

Net profit, '26 will be another year of growth. I think there are several reasons -- sorry.

Sorry, it was off. I said '26 will be another year of clearly growth.

The first one is due to the consolidation of Electricity North West and Neoenergia. As you know, we are already in Neoenergia, we expect in the next few weeks, we will have the control, the 100% of the company.

The positive acquisition, the minorities is what I mentioned. New distribution frameworks, what we are now -- like the case of U.K., which is the T3 -- RIIO-T3 from April.

New interconnections between Canada and Massachusetts, which I mentioned it was EUR 125 million EBITDA contribution per annum. The Brazil, the finalization of transmission project, which can add, as I mentioned before, EUR 250 million additional EBITDA as well the contribution of the 2.7 megawatts -- 2,700 megawatts installed power in 2025.

And the partial contribution of this 4.7 gigawatts, which is now under construction and will be completed during the year. The other one important point, I think we are beating this year the record of hydro reserve in the history of the group.

So I can say in this moment, all our dams are 100% almost full. So I think we are on the 95%, which is the reserve margin we have to keep already just for security reason.

So that is already provided, more than 9,000 gigawatts of store energy, which will be used in due time. And that can be completed with our capacity of pumping storage, which I mentioned, is another potential, almost 10,000 gigawatt hours per annum, then we can as well potentially produce with it.

Financial expenses, as I mentioned -- it was mentioned by Pepe Sainz, is fully under control. It's a lower debt and our interest rates are mainly fixed or hedged.

So that's why I think we are confident that to reach more than EUR 6.6 billion net profit this year. That represent practically, I think when we present last year, our plan, it was a plan to increase by EUR 2 billion in 3 years.

So I think between '24 and '28. So I think with that one, we can already secure then half of the time, this EUR 1 billion has already been already increased already.

And that's why I think we are comfortable that another EUR 1 billion from '27, '28 as well can be easily be achieved. Traditionally, always, as I mentioned before, we are over delivering our promises, which I think you see that when we made that one is we are normally comfortable then we can already achieve these numbers.

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

And -- but I think you mention, Pepe, with more detail.

Well, in the net debt, we are expecting to end '26 somewhere between EUR 54 billion and EUR 55 billion, which is below what we had in our plan. And this is basically because we have, as you know, finished this year with lower debt than what we had expected.

So lower EUR 1.5 billion at EUR 50.2 billion, this means that we are going to increase a little bit the debt amount as we continue to invest, but below what we had in our plan and that we had in our Capital Markets Day. So as the Chairman has said, the debt under control and the financial expenses also.

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

So Pepe, [Foreign Language].

Yes. Well, as you know, well, this year, we had a capital gain mainly by the -- due to the sale of the Smart Meters in the U.K.

This is something that we have adjusted. We have taken away another EUR 460 million to more than compensate this EUR 379 million.

This EUR 464 million is in the below the EBITDA. But -- so we are stripping EUR 379 million of the EBITDA this year versus EUR 1,700 million last year, mainly due to the Mexican capital gain.

This is what makes the fact that in reported terms, the EBITDA is below last year, but not in recurring terms. So these are the 2 main impacts at the EBITDA level.

And at the net profit, so below the EBITDA level, mainly in the EBIT, in the depreciation and amortization in the provision side. This year, we have provisioned EUR 460 million, mainly to some adjustments in the value of our pipeline, mainly in renewables across different geographies, okay, compared to last year, which the adjustment was basically in the onshore, in the U.S., as you recall.

This year, it's been in -- basically in -- across different geographies. And last year also in the provision line, we adjusted around EUR 1,500 million in the provision line in '24 to compensate this capital gains that we had in the EBITDA level.

So we stripped this provision from the EBIT side. So to conclude, last year, we stripped EUR 379 million at the EBITDA -- this year, EUR 379 million at the EBITDA level.

'24, EUR 1,700 million at the EBITDA level. And this year, we have taken away around EUR 460 million at the EBIT level.

And we have also taken away last year also through efficiencies and adjustments, another EUR 1,500 million. And in addition to that, we have 2 other elements, which is basically the fact that this year, we have included the a cap allowance, which compensates what we are taking away, which is the New York recognition of the past costs, okay?

So that is basically the main adjustments in our numbers.

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

So I think, as I have mentioned, in the case of Spain, we have to manage our business according with the signal that has been given. So signals is that they are already just reducing the money in operation and maintenance.

So we have to adapt our operation and maintenance to the new circumstances. They are already just limited the CapEx that they are giving some guidelines where to invest and how much to invest.

So we have to adapt to the circumstances. But I think I would like to say that in the case of Spain, it's less than 20% of our RAB.

So I think we will adapt to the circumstances in such a way that we will not be affecting our P&L, adapting our expenses, adapting our CapEx to the framework has been defined. But I think our Networks business is depending much more of other countries.

I think in the case of U.K., as I mentioned, only the growth that we are expecting in transmission is absolutely huge. Only in transmission, the regulator has already recognized the need of accelerating our transmission lines, multiplying by 4x the CapEx towards the previous 5 years with a clear, stable, predictable and attractive framework.

So I think RIIO-T3 is clearly a transformational things for Scottish Power. So the RAB of transmission in 2030 will be equal, even highly higher than the RAB of distribution.

So together, we are going to reach more than EUR 30 billion RAB compared with EUR 9 billion we have in Spain. So I think just to give you the image what that represents.

And as well, the return on equity. If return on equity including incentive, higher than 9%.

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

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

And in the case of United States, a similar thing as well as Brazil. In Spain, so the situation, we have to follow the signals of regulator.

But in any case, our -- the size of our business in Spain is less than 20% of our total, so which I think is not important, what -- it represented for that one. But we will adapt completely -- our deliveries, what has been already been given.

The signals given is clear, less investment in operation and maintenance, CapEx already addressed to certain areas and not to another areas. I think we have to follow this instruction.

That's it.

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

Pedro, would you reply?

Okay. I think we are always suggesting Chairman on these rate cases to the circumstances.

Last year, we focused on recovering storm costs in New York, EUR 800 million and more than EUR 300 million of storm costs as well in Maine. That was the focus.

I think this year, because of circumstances, we believe it's the right thing to do, interim rates and 1-year rate case in Maine. The interim rates will be applied in July, and then we will request for a 1-year rate case.

After that, we'll go into a multiyear rate case. And in the case of New York, we still have the current rate plan, which will be in the mid of the year, and we're already working in a 1-year rate case.

And after that, we will file also a multiyear rate case.

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

So I think it's -- I would summarize in 2 words. For me, as engineer, the farm is already completed.

In this moment, we have more than 60 turbines of the 62, which are fully installed. I think there are more than 55, I think, in operation exporting electricity.

So I think these numbers means the level of availability is similar for other offshore wind farm we have in operation. So for me, that is completed.

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

That's it.

Yes. I think you're totally right, Chairman.

I think we have 60 of 62 rotors installed. That's 97%.

Probably in the next days, we will install the 2 remaining ones. And I think from an operation point of view, 52 of the 62, that's almost 85% of them, are right now allowed for operation.

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

Pedro?

Okay. I think it's important to know that we are the market leader.

We are the leader in energy supply. We are the leader in number of customers and also the leader in churn rate.

So it's normal that we have some rotation in those customers. I think we continue to be successfully measuring -- taking actions to retain our best customers.

And right now, we feel that even that margin per customer is right now growing from an energy point of view.

So I would like to insist in one more word. I think we are lead in number of customers and -- but the level of loyalty of our customer is huge.

We have the record. We are the best in churn rates in the country as well.

So I think it's normal, when you are already the largest number of customers, then you lose someone else. But important is the level of loyalty of the existing one.

So the percentage of rotation, customer rotation in our case is much lower than the rest, especially those newcomers. The newcomers is the rate case -- the churn rates are absolutely huge, so -- which I think as well is normal in other countries.

When you go as a country initially, I think the number of -- you win customer, but you lose customers. The important thing is the loyalty of our customer is huge.

I think that I would like to mention this message.

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

So I don't know how many times I repeat it as engineer, what is my vision. So our -- the nuclear power plant are necessary, are safe, are efficient and contributed to lower prices in all countries.

So I think that is a reality. In the case of Spain, we have -- we suffer a huge taxation, which I think has reached almost EUR 30 or EUR 35 per megawatt hour, which is 3x, 4x more than other neighbor countries.

But the power plant itself, I insist, are necessary, safe and efficient, and they are already generating lower prices. I think that is like that today, some of the nuclear power plant are being called to operate under restriction because they are cheaper than gas plant.

So I think that is the reality we are facing today. In fact, today, European countries with no nuclear have structurally higher prices, Italy and Germany around EUR 20 more than France or Spain.

So I think that is the big debate in Europe. So those countries what we have already keeping our nuclear power plant, and we have already invested in another renewable technologies, we have lower prices than those who have not already, either not built or either has already closed, the nuclear power plant, and they are fully dependent on the import of fossil fuels, which I think that makes that the cost is automatically higher.

So that's why, for this reason, we have already asked the extension of Almaraz, and we will as the extension of others in the future, I imagine. And I think this process is ongoing.

So I think it's Nuclear Security Council is analyzing. So -- but I think I'm not seeing that -- we have already delivered all the paper requested.

And I think the fact is this power plant, most power plants, similar to that one, are already extension life up to 60, even 80 years, which I think will have not much sense. And here, we will not already use this asset, which, I insist, are necessary, safe, efficient and contribute to lower prices.

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

Sorry?

Sovereign Energy, the process of deal.

Well, I think that the process is going on. I think it's a question of weeks.

So I think we have not any -- all they are progressing well, by step by step. And I think I feel Pepe in April will be closed later.

So I think it's going according to schedule.

Next is, how will recur U.S. network investment affect customer affordability?

And are European regulators becoming more focused on this issue as well, especially Italy with the new measure adopted?

So as I mentioned in my presentation, today, we have a significant latent demand unattended due to lack of infrastructure. So I think that is a fact in all countries.

The fact European Commission has already made directive recommending higher investment in networks, in infrastructures. So -- and I think this lack of infrastructure of transmission and distribution is causing losses in curtailments, and that is generating extra cost to many countries.

So that's why higher investment in network will allow to solve those curtailments. I think in the case of U.K., if I don't remember that the curtailments amount something like GBP 5 billion per annum just because there are certain electricity, in some part of the country, cannot be exported, in another part of the country and this part of the country have to use more expensive sources of energy toward another one, are already not being able to be exported.

So this more investment solve this problem of curtailments. That can incorporate an additional demand.

We now is latent, we cannot be supplied. And they will dilute it.

This extra demand will dilute the cost and the impact of this infrastructure cost, resulting, again, the lower cost per kilowatt hour. So that is better surplus.

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

And in generation, I think my position in your chart also clearly, each country have to look for how to use their own indigenous energy to become more autonomous, to have -- to become -- to use more autonomy in their energy, to avoid problems that we've been experiencing in the past, to the import of certain energies from other countries. I think we've been suffering the problems of shortage of gas 2 years ago because the lack of supply from Russia.

So now -- but in any case, this cost of gas imported with liquefied always will be more -- will be less competitive than those who have the gas door-to-door to the power plant. So that's why each country have to look what is the alternative.

In the case of Europe, the European Commission is clearly defining what they would like. They would like more autonomous energy base in renewables, onshore, offshore, solar, more nuclear, extension of the existing one or potentially new one, which is the case of France.

France just published their policy. They are relying in more nuclear and more offshore.

And I think Britain is already same thing as well. And that is the point, is the point is networks for supplying the demand which today cannot be supplied.

These networks can really diminish the cost per kilowatt hour because they will dilute it, with more demand diluted, the cost of the new infrastructure. And the power will be depending on the countries and depending on the source in each country.

If the country has one type of sources of energy that the energy will have to be used with the basis of competitiveness, sustainability and self-sufficiency in the country.

Next is, could you update on your U.S. renewable pipeline?

Is repowering still an opportunity in the U.S.?

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

I think in the U.S., we have 11,000 megawatts in operation. And we are right now building around in construction 600 megawatts, out of which 445 are repowering.

I think because of the customer demand to continue to increase, we are also looking into extension of life between 15 and 20 years with very moderate investments and attractive business cases. I think on top of this, we have more than 4,000 megawatts of pipeline.

We don't have any new projects in the projections we gave in the Capital Markets Day because we prefer to actually do things and there will be an upside every time we decide to do new projects.

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

So Italy, as I mentioned before, I was explaining clearly, they have higher prices than other European countries due to their past energy policy decisions that they already make -- they increase their dependence of gas imports. I think that is clear.

Same then Germany, is facing higher prices in Europe, there, due of decision -- political decision taken in the past of that one. I think this case is very different for other countries that we have renewable and nuclear driving structural lower cost.

That is the case of France, that is the case of Spain. I think in line with the conclusion reached in the European Commission 3 years ago and related to the market design, we continue thinking the long-term contracting, mainly in PPAs, are the solution to avoid volatile and high power prices for European consumers.

So I think the fact those countries who have already more long-term contract are those countries are part of the mix of power generation. Other countries, we have already more stable and predictable prices.

So I think Europe needs to become more and more energy independent. So we cannot rely in sources which are not already in our hands.

So that's why any market intervention will not help to attract the necessary investment to attend this growing electricity demand. So we have to be very careful with all these measures.

We have to be very careful with the taxation. We have to be very careful in the fact that taxation, European Commission is recommending as well reduction, a substantial reduction in taxes to electricity for increasing competitiveness because that is the best way to increase the competitiveness of European.

If we compare the taxes of Europe with the Americans with the Chinese -- or the Chinese, in some cases, it's 5x more, the European toward the Americans or the Chinese. So I think it's not a question of looking for more reforms.

It's a question of looking what is the problem. The problem in Europe is taxation, and energy policies has not been in some countries making the right direction.

If we are keeping already the nuclear power plant, if we increase our investment already in autonomous energies, which in the case of Europe, certain is renewable onshore, offshore solar, hydro, we make more storage. So certain, we can be already as competitive as others.

And that is what they are making in countries like China, which are investing heavily already in autonomous energies, mainly renewable hydroelectric and nuclear as well for keeping already a much competitive mix of power generation.

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

So I think PPAs with technology company is not new for us. I think we have PPAs with the largest users of data centers.

We have already in this moment, more than 150 gigawatt hour of new PPAs signed. And only last year, we signed 1 terawatt hour more, and we have already 12 terawatt hours per annum, already the energy supply to these companies.

I think I insist on that one many times. I think there are people who have been dreaming to become data centers builders.

We are already data center facilitators. So we try to facilitate the installation of data centers because data center is a large consumer of electricity and our business is to sell electricity.

That's why we are doing our best for helping those who would like to install new data centers through providing land or providing connection or providing these PPAs, whatever. So I think it's -- data centers is not only a question of power, it's a question as well of connection.

It's a question of networks. More networks are needed as much power is needed.

But I think if I have to, say, prioritize, networks is the first bottleneck in this moment more than power itself in some of the countries where we are present actually.

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

So I think we have increased our net profit EUR 1 billion in the last 2 years. And we expect to at least to increase another EUR 1 billion more in the next 2 years.

Investment and asset rotation is ahead of schedule. So I think the RAB is up by 12%.

We have more than 7,000 megawatts, new megawatts in construction -- in operation in this moment. We have 9,000 megawatts in pipeline ready for 2028.

We are seeing the acceleration of electrification. I was insisting and insist again and again, we need investment opportunities in transmission and distribution.

Clearly, that is a clear example in T3 in U.K. We have for the incentive for acceleration.

We have increased our return on equity by 100 basis points if we go ahead of schedule. So I think it's incentive for being faster.

On top of this, we have already better expectation for 2030 and beyond with new opportunities in transmission in countries like Australia. So I think all in all, we are keeping our plan and delivering focus in networks, being selective in renewables and in Power, as Pedro mentioned, in the United States, there are opportunities that we are making, but we can make more, the demand.

There are other countries, but we are possibilities in making more things. But we don't like to make dreams.

As you remember, we put name by name, power plant by power plant how -- which one we are going to build per annum. So it's not saying, "We are going to make 9,000."

No. "We are going to make this 9,000 in this country, in this period, in this thing."

So we have already -- in the case of United States that Pedro mentioned, we have -- for repowering, we are 11,000 megawatts already in operation, with more than half can be repowered. But we will -- but in the moment we have one by one, which one we are going to be repower, we will let you know.

But I think we are working with that one case by case because the time is -- it moves faster. Nevertheless, I think we have already our financial strength.

We are committed with it. We took all the necessary steps for keeping already our financial solidity.

And I think it's -- and that's why we feel we have a unique value proposition in the sector. So I mentioned in my speech something that we are from Bilbao.

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

And that is our track record. Our track record is an ambitious plan and overdelivering result.

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

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

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

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

Thank you.