Good afternoon, and welcome to the first half 2026 results presentation of the Acea Group. Fabrizio Palermo, CEO and General Manager; Francesco Ragni, Co-General Manager; and Valentina Bracaglia, CFO, will illustrate in detail the financial highlights of the first half.

Now I leave the floor to the CEO and General Manager, Fabrizio Palermo.

Good afternoon. Let's begin today's presentation with an overview of the regulatory and market environment.

As for the regulatory front, we've witnessed overall positive developments, particularly in the water segment. The MTI-4 tariff approval process by local authorities has been completed, while ARERA is nearly completing the approval process across all group operations.

As for the electricity networks, in June 2026, the provisional ready-to-use tariff was published following the publication of the final '24 tariff in April, both fully aligned with our expectations. In the environment business, similar to the water business, tariff updates for the 2026-2029 period are currently underway.

Turning to the commodity market, in the first half of 2026, electricity and gas prices posted increases of 6% and 2% respectively compared to the same period in 2025. Consumer prices reported an average increase of 2.2% year on year.

Finally, as for interest rates, as you can see on the slide, in H1 2026, the six-month EURIBOR and the 10-year mid-swap stood at 2.4% and 2.9% respectively, both reflecting a year-on-year increase. Moving to the next slide, here you see the business performance growing, driven by strategic investments and by operational improvement.

As for water, we further strengthened our market leadership through projects and wins both in Italy and internationally. In the electricity business, the sale of Acea Energia was successfully completed in line with the group's strategic objectives, and we have also accelerated our growth trajectory through the acquisition of Aquanex, a leading service provider in the water sector.

We have strengthened our presence in the water segment with additional ancillary services that are going to be strategic going forward. As for people, Acea entered the top 20 ranking of Top Employers 2026 in Italy, underscoring our commitment to human capital ever since the beginning of the business plan.

Our balance sheet was further bolstered by the successful execution of Italy's first public blue bond issuance, and Fitch confirmed the BBB+ rating with a stable outlook and raised our FFO net debt threshold from 5.2 to 5.5 times, recognizing the group's enhanced financial flexibility and credit profile resilience. Then we set up the Acea Foundation, that was then recognized as an historical brand of national interest, further enhancing the group's identity and heritage.

Overall, these achievements underscore Acea's ability to grow in a sustainable way while delivering long-term value for our communities, stakeholders, and shareholders. As for the next slide, here you see the H1 2026 financial highlights.

Pro forma organic EBITDA grew by 4% compared to the first half of 2025, driven almost entirely by regulated businesses, which account for approximately 95% of total EBITDA. Please remember that the EBITDA organic figure of H1 2025 was restated to exclude technical and contractual quality bonuses in the water sector and to account for business scope changes related to the high-voltage and PV asset sales, as well as the deconsolidation of Publiacqua.

We will come back to these points later on in the presentation. Net profit stood at €454 million, up significantly year on year, benefiting from the capital gain generated by the disposal of Acea Energia.

Organic net profit, excluding nonrecurring items, rose by 16% to €176 million, reflecting the strong operational momentum. CapEx, net of public grants, reached €500 million, in line with H1 2025, and over 90% of them are allocated to regulated activities to support infrastructure modernization and sustainable growth.

Operating free cash flow is -€58 million. Our robust operational performance allows us to maintain a sound balance sheet structure with a pro forma net debt-EBITDA ratio of approximately 3.64 times, fully consistent with our full-year 2026 guidance.

Moving on to slide 6, here you see more details about the first-half performance. As already mentioned, pro forma organic EBITDA reached €790 million, up 4%, well in line with our clear targets and driven by regulated operations.

Reported net profit reached €454 million. Stripping out one-offs and scope changes, organic growth was 16% and mirrors the strong operational performance.

Capital expenditures remained flat year on year, and the share dedicated to regulated activities accounts for 91% of the total. Net financial position stood at approximately €5.2 billion, up by €270 million compared to December 2025, primarily driven by seasonal working capital dynamics.

The net debt-EBITDA ratio, as I already pointed out, stood at 3.64 times, fully aligned with expectations and within our full-year guidance range. In the light of these results, we confirm our full-year 2026 guidance, namely EBITDA growth range between 3% and 5%, gross CapEx €1.5 billion roughly, and net debt-EBITDA ratio range between 3.5 and 3.6 times.

I will now hand you over to our CFO, who will walk you through the detailed financial results. Valentina, the floor is to you.

Thank you very much. Let's now dive deeper into the EBITDA performance on slide 7.

In H1 2026, we generated a reported EBITDA of €721 million, with regulated businesses accounting for approximately 95% of total EBITDA. Specifically, water accounts for 59%, network and public lighting 30%, and environment 6%.

On the right hand of the slide, you can see the main one-offs and scope changes that in H1 2025 amounted to €46 million. These were mainly related to the technical and contractual quality bonuses in water for 2022-2023 and the contributions from sold high-voltage and PV assets, as well as the deconsolidation of Publiacqua that occurred end 2025.

As for H1 2026, the one-off items and scope changes totaled approximately €2 million, reflecting the temporary plant downtime for revamping in the environment business and the Aquanex positive contribution following its closing in April. Slide 8, net profit.

In H1 2026, net profit reached €454 million, boosted by the €269 million capital gain realized after the disposal of Acea Energia. Excluding non-recurring items and business scope variations, recurring net profit grew double digits, namely 16%, reaching €176 million, mirroring the underlying operating performance previously mentioned.

Similar to the EBITDA, also in this slide, you see on the right the detailed one-off components and scope variations. On top of what I've already said, we have the capital gain deriving from disposal of Acea Energia, earnings from discontinued operations, and the impact of the IRAP surcharge introduced by the so-called Decreto Bollette.

Let's now move on to capital expenditures, slide number 9. In the first half, gross CapEx before public grants totaled €663 million, flat compared to last year.

This highlights our focus on regulated assets, on infrastructure reliability, and long-term resilience. Particularly, water accounts for the main destination of our capital deploy, with €379 million accounting for 57% of total, primarily targeted at network resilience and wastewater treatment facilities.

Then investments on networks and public lighting follow, amounting to €209 million, focusing on grid modernization and IT and commercial systems. Then we go on investing in the environment business with the construction of line 4 at the San Vittore plant and the development of new photovoltaic projects.

Let's now move on to cash flow. It confirms the strength of our balance sheet.

We generated EBITDA amounting to €721 million, leading to €512 million in operating cash flow before CapEx versus €570 million in net CapEx. Operating free cash flow stood at -€58 million, marking an improvement compared to both Q1 2026 and to the first half 2025.

As a reminder, Q2 cash outflows included annual tax and dividend payments, while absorbing the net proceeds from the sale of Acea Energia and acquisition of Aquanex. Moving on to the financial structure on slide 11, the first-half results confirm the sustainability of the group's long-term gross profile, as well as a sound capital structure.

As of June 30, 2026, net financial debt stood at €5.2 billion, up by €270 million versus year-end 2025. The pro forma net debt-EBITDA ratio was at 3.64 times, fully consistent with our target guidance range of 3.5, 3.6.

Our debt structure remains a core strength of our group. Roughly 80% of our debt is a fixed rate, average cost of debt 2.16%, and the average maturity of 3.8 years.

This structure effectively shields us from interest rate volatility and offers strong cash flow visibility. Rating agencies continue to confirm our strong investment-grade profile, with a stable outlook, BBB+ from Fitch and Baa1 from Moody's.

During the first half, we further strengthened our liquidity and financing flexibility with new credit facilities. In June, we successfully placed €500 million blue bond.

This accounts for the first Italian public issuance of a blue bond, and the success is testified by the fact that it was oversubscribed by more than three times, reaching an order book of €2.6 billion. Slide 12, we have a look at the water business.

Water remains the group's primary driver of growth, with sound results, with organic EBITDA posting a strong 8% year-on-year growth, largely driven by tariff indexation. At the same time, CapEx remained high, €379 million, broadly in line with H1 2025.

On slide 13, you see that networks and public lighting confirms a solid growth path backed by ongoing RAB expansion from capital deployed over recent years and efficiency gains. In H1 2026, EBITDA reached €217 million with a 2% organic growth year on year, while CapEx accelerated further, reaching €209 million.

As for the environment business, we recorded stable operational results in a period impacted by scheduled plant maintenance. Recurring EBITDA was €42 million, -€1 million year on year.

We've gone investing on this business; CapEx rose 14% versus H1 2025, supporting facility upgrades, revamping, and capacity expansion of our plants. As for generation on slide 15, we report a particularly strong performance.

Organic EBITDA is up 22%, driven by higher volumes, mainly from renewable energy sources, and leading to a 90% hydroelectric power generation increase. CapEx increased by 33%.

In H1 2026, CapEx reached €15 million. This is it as far as the presentation is concerned.

We can now start the Q&A session.

Good afternoon, and thank you very much for taking my questions. I've got three.

Can you please tell us what do you expect for the environment business in the second half, considering that there have been some factors that impacted on the performance of H1 because of some shutdowns of plants or maintenance? When such temporary problem are solved, what is going to happen?

Second question about guidance. Considering the H1 results and the contributions by Aquanex and environment bonuses that we can expect in H2, can we be confident with the higher end of the range rather than the midpoint?

Then the third question, the WACC. Can you give us an update about WACC for 2027?

Thank you very much.

Thank you. As far as the guidance is concerned, and I answer the question about environment based on H1 2026 results, we are confident that we'll be reaching the high end of our guidance range.

Clearly in H2, we won't have a linear development. The environment business will accelerate after the maintenance of the plants of the previous half.

We expect a slowdown of generation that grew markedly in the first half of the year, that cannot be replicated in the second half. Moreover, in the second half, the contribution to the results will come mainly from some operating costs that support the projects provided for in our business plan and are mainly concentrated in the second part of the year.

As for the WACC market, currently, the reduction trigger of 30 basis points is active. With the volatility of the market following the Gulf conflicts, trigger will play a key role in the tunnel because we expect the removal of data from the tunnel.

If this is going to be the case, then the opportunity to eliminate the trigger are certainly higher, but we have to wait and see.

Good evening, and thank you very much for your presentation. I've got three questions.

The first is a more general question, more strategic in nature, let's say. Rating agencies say that they feel confident with this net debt-EBITDA ratio almost near to 5 times.

What are the implications for you of this type of gearing that is substantially different than what you report now? Is it a matter of accelerating CapEx, or is it a matter of having a more proactive M&A approach or paying higher dividends?

What is the company's view in a moment when it is clear that it is possible to absorb additional gearing? Then I would like to know when the company will decide to distribute an extraordinary dividend related to the capital gain deriving from the disposals.

The second question, adjusted EBITDA reported a 4% growth, the adjusted net income grew above 10%. Can you please explain us the difference, why the growth of the bottom line is so strong?

Is it due to lower provisioning and lower taxation, lower minorities? Can you please help us understand what are the factors implied to try and understand what happens below the EBITDA that enables you to increase the net income so markedly?

Then third question follows up on the answer you already gave. You report a net income of €170 million.

You are a highly regulated business, of course, and I know that generation performed very strongly. If we multiply €170 million by 2, is this a good proxy of the performance of the second half?

I would like to try and understand what do you see in the second half that may limit the growth of the bottom line in the second half versus the first half? Thank you very much.

Thank you. As for the Fitch review threshold review, this will lead us to a 4.5 times ratio, providing us more flexibility and confirming that the rating agency sees us as a regulated business.

Moody's still has to revisit its thresholds, so as for Moody's, we are we stay around 4 times. Again, we are still pending the review by Moody's.

We focus on regulated businesses, as you say, we will be focusing on growth in the regulated businesses, namely water and networks, first of all. We'll be fueling the growth by grasping opportunities that may arise on the market, besides growing organically.

As for dividends, last year, the capital gain enabled us to pay an extraordinary dividend. Our dividend policy provides for a 4% on top of the ordinary dividends, towards the end of the year, we'll decide what to do for 2026.

As far as the results, the fact that we see acceleration of net profit versus EBITDA is mainly driven by provisioning, particularly with the last provision following the numerous projects that we are implemented implementing are definitely reducing. This is a good signal.

Also our financial management has remained unchanged despite growing debt, and this has given us, enabled us once again to have a non-linear dynamics, let's say, of what happens above and below the our net profit, our net income, sorry.

Following what we said about the EBITDA, considering that we are going towards the high end of the range, and we do not expect a linear growth in second half. Then we have also depreciations and amortization.

In Q2 versus Q1, we have seen an increase of roughly €10 million. We are have additional plants becoming operative, and this will lead to lower amortization, depreciations in the second half.

Then as for the financial charges, we're reducing them. We have blue bond of 3.7%, and we're paying a bond in October with a higher rate, and so this will have an impact on our financial charges.

The positive performance at the high end of the guidance achieved, well, below the net income will slow down, and this can give you an idea of what we expect for the full year.

by Emanuele Oggioni, Kepler Cheuvreux. Thank you very much, and good evening.

Thank you very much for your presentation. I've got a couple of questions.

First, the so much waited-for business plan. We haven't seen official dates yet, I would like to know whether you confirm the idea of having a new business plan by the end of the year and when, exactly.

A second, more strategic question, or let's say more general question, related to the negotiations you have with ARERA or the Italian government for a larger-scale reform of the water segment so that the problem in Italy, particularly the south of Italy, is addressed where house management do not have the money and the technical skills to make investments. Do you expect something may happen?

Again, you are constantly dialoguing with the regulators to eventually address these issues and adopt a large-scale reform that can drive your growth even further.

Good afternoon. As for the business plan, as you can imagine, we have been working on the new business plan and will go on doing so over the next few months.

We are still pending some pieces of information, especially as far as concession of networks are concerned and so on. Anyway, we haven't got a definitive date.

We expect it would be towards the end of the year, early next year. As soon as we have more visibility, we'll be announcing the official date for the presentation of the new business plan.

Then your question about ARERA. Of course, ARERA new management team was recently appointed, and they are certainly aware what the situation is in the water segment given the role that the new chairman of ARERA used to play.

We have a very fruitful dialogue with ARERA, and we are asking to give the opportunity to large infrastructure players like Acea to have a regulatory framework fostering the speed of CapEx. The water crisis is not only related to climate, but unfortunately, as we all know, crisis Italy suffers from are much worse than that of other European countries.

Infrastructure players must be even motivated to invest to offset the situation because this situation is creating problems already in the south of Italy, but such problems may soon affect the center and the north of Italy as well. There are some farming areas in the north of Italy, for instance, that have been suffering from drought for some time now.

This is a well-known problem. We'll go on working with the regulator, the local, regional, and central governments to find the best way to enable us to increase our investments.

As Valentina said during the presentation, finding capital for regulated businesses is something definitely not easy, and our blue bond actually testifies that. This is why we was very, very successful, this issuance.

Of course, it is important also for Italy to develop the water segment further.

Thank you very much. Just one question about the releveraging that Javier mentioned, considering that your regulated business account for 95% of the total.

Can you elaborate a bit more about the opportunities that exist or that may materialize if the dialogue with ARERA leads somewhere? Can you please give us some more visibility about forthcoming trends or other targets like Acquaviva that might provide a further boost to your growth?

Opportunities, in other words, that may emerge and materialize on the market that may drive your growth further. As for M&As, as I always say, it's difficult to make forecast.

The acquisition of Aquanex, that is an important platform for us. Also the acquisition of Aquanex are meant to strengthen our business.

There are other opportunities on the Italian market and also abroad, but this is not the real game changer. Whereas as far as other type of transactions are concerned, well, depends on what happens on the market, on the opportunities that materialize on the market, and they're not many.

Then as the CFO repeatedly said, since this is a regulated business, this will enable us to invest increasingly on regulated businesses. For instance, electric networks and water networks, is there room for further investment there?

Having more resources available enable us to speed up CapEx in these segments. As we repeat at every call, whenever there are M&A opportunities arising in our core businesses, we'll certainly scout them.

Then, of course, there must be always a willing buyer and a willing seller in such transactions.

Oddo. Yes, thank you for taking my question.

I have mainly two questions. First one is on capital gain on the disposal of Acea Energia, which came in significantly higher than expected.

Could you explain what drove this positive surprise? My second question is on operating cash flow, which was, as expected, impacted by seasonality on working capital.

What are your projection or expectations for working capital in half two? Thank you.

Thank you very much, Anis. As for the cash flow, the early year absorption was mainly driven by two factors: one, the energy decree that changed the timing for the payment of the contributions, and this had a substantial impact; and then, in the first quarter of the year, we paid €25 million for extra profits on the sale of electric energy of 2022.

That's this absorption in the first part of the year. In line with the past years, we expect a working capital absorption almost neutral towards the end of the year, and this is going to offset the absorption we reported in the initial part of the year.

Then as for the capital gains following disposal of Acea Energia, as you said, the capital gains were higher than we had estimated based on the value of our stake in it. This is due to the fact that because of the historical results of Acea Energia, Acea Energia contributed negatively to our consolidated results.

In the consolidated results, we witnessed a higher capital gains than we had estimated.

I just wanted to ask you if the RAB water that you show on page 12, €5.2 at December 2025, can you break it down between the consolidated RAB and the equity consolidated companies' RAB, and then the amount of grants or subsidies? Do you have this breakdown at the 30th of June?

The same applies to networks. Say, out of €1 billion of RAB, how much the grants are at the end of June 2026?

As far as the RAB breakdown is concerned, the subsidies amount to 20% for the whole group and includes all subsidies. As far as the water RAB is concerned, we're talking about €5.2 billion here.

Let's say that €4.5 billion roughly is fully consolidated, and the remaining part is the breakdown of the pro-quota of un-consolidated, plus the contribution of gas that is fully consolidated. As for networks, well, you see the overall figure, including the subsidies.

Thank you very much.