RWE AG

Thank you, George, and good afternoon, ladies and gentlemen. Thank you for joining RWE's conference call on H1 2025.

Our CEO, Markus Krebber; and our CFO, Michael Muller, will first guide you through our presentation, and then we will start our Q&A session. And with this, over to you, Markus.

Yes. Thank you, Thomas, and a warm welcome to everyone.

Our robust portfolio led to a good financial performance in the first half of '25 despite weak wind conditions in Europe and a low trading result. We are on track to deliver our full year earnings guidance.

Our construction program is progressing well with around 11 gigawatts under construction, more than 3 gigawatts will begin commercial operation in the second half of this year. And all our offshore construction projects are on schedule.

The investment frameworks in our core markets are taking shape. In the U.K., the market design provides a stable environment for future investments.

In Germany, we see a focused energy policy with higher priority for security of supply and industrial competitiveness. In the U.S., The Big Beautiful Bill has been signed into law.

And we are prepared to take advantage of the upcoming investment opportunities if our investment criteria are fulfilled. Our U.K.

offshore pipeline puts us in a great position to take a selective approach for the upcoming AR7 auction. In Germany, we have an attractive development pipeline for new gas plants and batteries, which will enable us to benefit from the rising investment opportunities in flexible generation and security of supply.

In the U.S., we have the potential to continue our build-out program in the next years. Our robust portfolio in combination with our disciplined capital allocation gives us high visibility on our earnings per share growth.

And on the back of our dividend growth and the running share buyback program, we will deliver an attractive shareholder return. Let's now get into the details and move to Slide 5.

We have delivered a good financial performance in the first half '25 despite the headwinds of weak wind and low trading. Adjusted EBITDA stood at EUR 2.1 billion and adjusted net income at EUR 0.8 billion.

Adjusted earnings per share stood at EUR 1.1, reaching 50% of the full year guidance midpoint. When markets were dominated by geopolitical events and less by market fundamentals, our traders were cautious in position taking.

Hence, we see low earnings. In Q3, we have so far seen an increased performance in trading.

We remain confident of delivering earnings within our guidance range for all segments. For the full year '25, we confirm our adjusted EBITDA, adjusted net income as well as adjusted EPS guidance.

Our construction program is progressing well. As we speak, we have around 11 gigawatts of capacity under construction, diversified across regions and technologies.

Out of that, we will bring more than 3 gigawatts to commercial operations in the second half of the year, mainly onshore wind, solar and batteries. And all our offshore projects are well on track.

Sofia, our 1.4 gigawatt project in the U.K. has reached a major construction milestone with the successful installation of the 100th and final offshore monopile foundation in mid-July.

Since March, we have installed 36 turbines, and we expect grid connections and first power later this year. Full commercial operations will be in '26.

At our Danish 1.1 gigawatt offshore project, Thor, foundation and cable installation work are ongoing. So far, 49 of 72 foundations have been installed.

Installation of turbines is expected to begin in '26. Our [660-megawatt] Nordseecluster A project in Germany has also reached a key milestone.

We installed the first foundation in mid-July. As of now, 4 turbine foundations have been installed.

Wind turbine installation is expected to start in '26 with commercial operations beginning in early '27. As part of our constant portfolio optimization, we closed the selldown of 49% of Thor and Nordseecluster to Norwest Bank Investment Management in Q2 this year.

At our OranjeWind offshore project in the Netherlands, we will start to install the foundations in summer '26. For this project, we have joined forces with TotalEnergies in a 50-50 joint venture.

In our core markets, visibility of investment frameworks has improved over recent months. In the U.K., we have clearly seen positive developments.

Firstly, the retention of one price zone keeps a certain and stable landscape for future investments. Secondly, the updated AR7 auction rules are a signal of confidence and a strong commitment to the renewable energy strategy of the U.K.

government. The decision to extend CfD periods from 15 to 20 years derisk the cash flow of projects further.

The raised price cap and improved load factor assumptions for offshore are positive developments, too. Now the size of the auction budget will be key, which is expected in autumn before bids are due.

We have a strong U.K. offshore development pipeline that can participate, 9 eligible projects with a capacity of up to 7.5 gigawatts offer us a broad range of options.

The 7.5 gigawatt still includes 100% share of the Norfolk cluster. As part of our offshore portfolio optimization, we will reduce our stake to 50%, and we will project finance these assets.

With our versatile and mature offshore project pipeline, we are able to be selective, prudent and flexible on timings. All investment decisions must fulfill our strict investment criteria, and we will continue to be very disciplined in the auctions as we have proven over the last years.

The German energy policy is focused on cost efficiency, security of supply and industrial competitiveness. A key pillar to ensure security of supply is the auction of gas new builds.

We expect the auction design to be published before the end of this year. That would mean the first assets could come online by the end of the decade.

The second step, a technology-neutral capacity mechanism is planned. The new EU rules now give clear guidance for a fast-track approval process.

The focus on cost efficiency and industrial competitiveness is a positive signal for the German industry and our customers. As part of the coalition agreement, the government is working on relief measures for the energy-intensive industry.

The EUR 500 million infrastructure package, the German government will put in place helps to support the overall economy. We are prepared to take advantage of the upcoming investment opportunities, again, if our investment criteria are fulfilled.

Our attractive gas power plant pipeline is well developed, and we are ready to construct 3 gigawatt of gas plants if we are successful in the auction. We have our respective supply chain largely secured and have already reservation agreements for 2.7 gigawatts of gas turbines and engines.

We have also been active on the development of additional battery opportunities. Batteries will continue to play a key role in the integrated power system with renewable energy and deliver attractive returns.

In Germany, we currently have 400 megawatts of batteries in operations and 1 gigawatt under construction. Additionally, we have around 2.5 gigawatt of battery projects under development in Germany, which have a planned COD before the end of the decade.

In the U.S., we have been maintaining our strict requirements for investments in the current market environment. We only bring projects to FID that have tax credit safe harbor, tariff risk mitigated, offtake secured and all necessary permits in place.

With The Big Beautiful Bill now being passed, we do see continued tax support for further build-out. We are awaiting final clarity on tax credit eligibility, such as start of construction and safe harbor provisions as well as FEOC restrictions in the coming weeks.

Our proactive procurement strategy has been helping to manage and limit tariff risk. The market environment remains positive as we see overall structural power demand growth in the U.S.

This helps us to secure offtake for our projects ahead of FID. However, we will not compromise on the strict investment criteria and risk management requirements.

Coming to the conclusion on Page 10. We offer attractive earnings growth through 2030.

Bottom line earnings will grow with a strong 18% EPS CAGR to 27% and 13% to 2030. We target an annual dividend increase of 5% to 10% per annum, and we will execute on our existing share buyback program of EUR 1.5 billion, which run until Q2 '26.

And with that, now over to Michael.

Thank you, Markus, and also good afternoon from my side to all of you. On the back of our robust portfolio, we have delivered a good financial performance in the first half of 2025 despite weak wind conditions in Europe and a low trading result.

Adjusted group EBITDA stood at EUR 2.1 billion and adjusted net income at EUR 0.8 billion. Adjusted earnings per share were EUR 1.1.

We confirm the guidance for the full year. Our EUR 1.5 billion share buyback program is making good progress, and the first EUR 500 million tranche has been completed.

Shortly thereafter, we started with a second tranche. The full program will be completed by May 2026 as planned.

So far, we have bought back 19 million shares at an average price of EUR 32. Only recently, our strong BBB+ rating from Fitch has been confirmed with a stable outlook.

On the back of an expected higher share of contracted EBITDA and an increased share of power generation from clean technologies, Fitch has relaxed the leverage target. Our strong credit rating highlights the successful transformation of our business, the robust and resilient portfolio and underlines our financial prudence.

In June, we successfully returned to the hybrid bond market. We have issued a EUR 1 billion green bond in 2 tranches at attractive terms.

Our bonds met with a high investor demand with an order book that was oversubscribed by more than 10x. Let's now take a closer look at the H1 2025 financials.

Despite weak wind conditions in Europe and low trading results, we have achieved solid earnings. In offshore wind, adjusted EBITDA was EUR 643 million.

Earnings were below last year due to wind conditions and lower hedge prices. Compared to the first quarter of last year, our offshore wind generation volume was down 23% due to lower wind speeds across our U.K.

and German offshore wind portfolio. Onshore wind and solar recorded an EBITDA of EUR 830 million.

This was driven by significant capacity additions, predominantly in the U.S., partly offset by weak wind conditions and lower hedge prices in Europe. Our U.S.

capacity amounted to 11.2 gigawatts at the end of H1 of this year compared to 9.7 gigawatts a year earlier. Adjusted EBITDA of Flexible Generation business was EUR 595 million.

As we expected, we have seen lower earnings in line with normalized prices. Our Supply & Trading business showed a low trading performance in H1 and stood at EUR 16 million.

When markets were dominated by geopolitical events and less by market fundamentals, our traders were cautious in taking positions. Hence, we see lower earnings in H1.

In Q3, we have seen so far an increased performance in trading. We remain confident to achieve earnings well within our guidance range.

Other consolidation was EUR 55 million. In total, adjusted EBITDA came in at EUR 2.1 billion.

The year-on-year adjusted financial result improved due to an increase of capitalized interest during construction. For adjusted tax, we applied the general tax rate of 20% for the RWE Group.

Adjusted net income stood at EUR 775 million, resulting in an adjusted earnings per share of EUR 1.06. The adjusted operating cash flow was minus EUR 390 million at the end of H1, driven by seasonal effects.

Changes in provisions and noncash items were driven by seasonal effects in the utilization of provisions. It also includes the cash flow from our phaseout technologies.

Changes in operating working capital were marked by the purchase of CO2 emission rights in Q1, partly compensated by a decrease of inventories of gas and storage. For the first time, the hand-in of CO2 certificates is due in Q3 of this year instead of Q2.

This leads to a seasonally higher working capital balance in H1. Net debt stood at EUR 15.5 billion.

In the first half of 2025, we invested EUR 2.5 billion net in the growth of our offshore wind, onshore wind and solar and flexible generation businesses. Gross investments were offset by disposal proceeds, in particular from the sell-down of 49% of our 1.6 Nordseecluster project in Germany and our 1.1 gigawatt solar project in Denmark.

Other changes in net financial debt amounted to EUR 700 million, mainly driven by timing effects from hedging and trading activities. At the end of the year, we expect net debt to be lower than at H1 and slightly below our 3x leverage target.

For 2025, we confirm our outlook. Adjusted EBITDA is expected to be between EUR 4.55 billion and EUR 5.15 billion.

Adjusted net income will range from EUR 1.3 billion to EUR 1.8 billion and adjusted earnings per share between EUR 1.8 and EUR 2.5. The dividend target is EUR 1.2 per share for this year.

And now let me hand back to Thomas.

Thank you, Michael. We'll now start the Q&A session.

Operator, please begin.

So 2, if I may. First one, I guess, on your guidance and full year outlook.

I get sort of net income was 50% the full year in the first half. But actually last couple of years, I think it was more like 75% or 80% that you did in the first half.

So can you sort of help us bridge to how you think you get to the midpoint of your guidance for the full year in the second half, please? And then a question on capital allocation.

I guess, kind of focused on allocation round 7. I think you sort of mentioned you'll kind of look to sell down and project finance these projects.

So I guess that will reduce the burden of nonproductive capital employed. But we had [indiscernible] describing it very much as a buyer's market at the moment.

Press reports suggest that their kind of efforts to sort of sell [indiscernible] haven't exactly gone smoothly. So I'm just wondering how do you see this?

And is there a risk that there's sort of not enough demand out there for you to be able to progress U.K. offshore without basically carrying more of that on balance sheet, please?

Okay. Peter, thanks for the question.

I'll start with the guidance. Indeed, the profile this year, we expect to be slightly different.

So rather a 50-50 split between H1 and H2. The reason being clearly, if you recall, when we gave the guidance in February, we also saw poor wind conditions in the first month and considered that already in the guidance.

And secondly, we have seen a low performance in trading and do expect a normalized performance of trading in the second half. And as we already mentioned in the speeches, we actually also have seen so far in Q3, a good performance of the trading so that we are very confident to deliver in our guidance.

And I'll take the second one, Peter, on AR7 and Norfolk and farm-down. So we have already said at full year results when we presented our farm-down strategy that for especially the big Norfolk projects, we want to get everything in sync.

So we will only take an FID and commit to additional capital commitments if we have a farm down, so an equity partner for 50% or 2 and project finance. So we will not front run.

So we will not go first and then find a buyer, but we synchronize the project that everything comes together at the same time. So you can assume that we are already in the market talking to potential buyers.

And I think if we have an attractive project, it also depends, of course, on the CfD price, and it should not be a problem to get that done.

The first one is on earnings. And I've seen that the weakness in '25 seems mostly from nonrecurring elements, load factors, trading.

So I guess my question is, if we see in the next year, '26 and '27, a normalization in load factors and trading, that's probably EUR 350 million up. So first, I was going to ask you if this is, you think, correct, the headwind you've seen this year so far?

And secondly, can you help us mark-to-market financial expenses? Because you're guiding EUR 500 million this year, but you did just over EUR 50 million in H1.

and you continue to invest. So if work in progress remains to a degree, elevated, does it mean that your EUR 500 million financial expenses estimate for this year should be much lower?

And does it mean also that in 2027, your EUR 750 million estimate maybe is more like EUR 600 million. So all I'm trying to say here is without getting tangled in the numbers, if EBITDA normalizes and financial expenses remain lower, are we -- are you basically implicitly telling us there is an upgrade in '26 and '27 for the bottom line?

Very long, sorry, that's the first question. The second is -- sorry, I'm getting there.

The second question is, we are seeing some of your peers' share prices and businesses getting under heavy pressure, any temptation in being a consolidator in renewable industry in Europe?

Yes, Alberto, let me start with the comments on the financials. I guess -- it's clearly a good summary that the effects you see in H1, namely clearly below average wind conditions and a poor trading results are one-off effects we have seen in H1, and there shouldn't be any read across for the years to come.

Secondly, your observation on financial results is also in the right direction. So indeed, we are seeing some improvements on the financial results.

I mean, just give you a few comments. I mean, you saw us placing a hybrid in a very attractive environment.

We delayed our bond issuance -- U.S. bond issuance in April.

And there also have been some phasing effects like tax credits that kind of reduced the amount to be financed. So there is clear effects that you focus on.

Is there a read across to '26, '27? Look, I mean, financing cost very much depends on the investment program.

So we need to see how indeed, as Markus referred to, investments are going, and that will also then determine the financing costs going forward.

On your second question on consolidation, I mean, we have laid out a very clear capital allocation framework when we announced the share buyback. And I can just reconfirm that big M&A company transaction are not part of that capital allocation plans, which we currently have.

That doesn't mean that we go for a project here or there where it could make sense, but that's more organic development activity. No big M&A on the table.

3 questions that I would have, please, first of all, looking at the difference between your gross CapEx for H1 and your net CapEx, there seems to be a delta of around EUR 2.7 billion, of which EUR 1.4 billion is in connection to the partial divestment of Thor and Nords. What bridges the gap to the EUR 2.7 billion?

And then the second question is just coming back to the financial costs that Alberto was asking about. There's kind of 2 ways that you can look at this.

One is, given your minus EUR 50 million for the half year once you strip out the E.ON dividend, that would imply the underlying H1 ex the dividend was EUR 250 million, which could imply if you had that in H2, you could end up around EUR 300 million for financial costs. Or conversely, if you take the full year guide of EUR 500 million, where the underlying implied net interest cost is EUR 350 million, and it's EUR 50 million from H1 that lands you at EUR 400 million.

But is it that kind of order of magnitude where lower of EUR 100 million or more the financial costs for the full year could end up below EUR 500 million?

Yes, Olly, thanks for the question. Let's first start with the CapEx.

So indeed, a big driver is the sell-down we've seen on Thor and Nordseecluster. And then the way how accounting treats it, you also have the contribution from minorities to projects like, for example, Masdar on our Dogger Bank project that also count as divestments and reduced the net cash investments.

And further, there has also been some optimizations that kind of contribute to the number. Finally, on financial results, I think good analysis and yes, leading in the right direction.

My 2 questions, actually, I did want to stick on the financial cost. Just more to understand if there were anything one-off that you see and how much this is extrapolatable to future years.

So again, if it were not EUR 500 million, but rather EUR 400 million or EUR 300 million, then just to see how much of a run rate -- was there anything one-off that's happening this year that doesn't flow through to next year? So that's my first question.

And the second one is on the U.S. You're expecting the treasury guidance next week.

What are your expectations on how dramatically it might change? And could you also comment about any capacity you have already safe harbored in 2024, which is not going to be impacted by how this treasury guidance comes out at?

So Deepa, I'll take the first part. No, there is no one-off apart from obviously the E.ON dividend that is part of the financial result in H1.

And the second question is on the U.S...

Sorry, I was just saying, so we should say that a sustainable level of financing costs is maybe lower than what you have expected at the beginning of the year?

No. I mean, look, there are some effects like, for example, obviously, the more attractive hybrid that is clearly impacting also later years.

Then obviously, it's a question how FX rates would develop going forward. I mean we currently see elevated U.S.

dollars. So that's obviously reducing the financing cost, but that very much depends on that.

And then there are also some timing effects that are more -- this year's effects like the U.S. dollar bond I talked about or some tax equity financing where we get cash earlier.

Deepa, on U.S., I mean, given what we have experienced in the last months, I don't want to speculate. So I mean, our mindset is we take it when we know it and then we draw the conclusion.

On safe harbor, the same. I mean I could give you a number under the old assumption, but let's wait for the final rule, and we will immediately communicate to you what we think is possible in terms of build- out.

But as I said previously, it's not only safe harbor. Probably that is not even the limiting factor.

It's also mitigation of tariff risk, which is still volatile. And if that is not manageable, then it would also delay investments.

I mean I think there is an optimism that given the significant power demand need that we get clarity on both aspects, and then we are in a position to tell you exactly how we adjust our plans going forward.

2 for me. So first, it's another one on the U.S., but a point that you didn't touch on in your answer just now.

What are you seeing on permitting in onshore and particularly onshore wind? Obviously, federal permitting has been tightened up.

It's a bit of a difficult one to judge from a distance because it's very project specific. But do you expect any issues around permitting, whether you're crossing federal roads or lakes or et cetera, that could complicate your FIDs and so on over the next few years in addition to what's going on with safe harbor and tariffs?

And then on the second one, obviously, we've got going on in the press and politically the debate about power subsidies in Germany or power cost subsidy or grid transmission subsidies and tax cuts. Could you help us just understand -- as things stand at the moment, what share of demand or industrial demand is going to get these subsidies, i.e., people that don't already get them that will?

And how material is that? And how elastic do you think that demand is?

And what I'm getting at is, do you think that when these are enacted, it might actually start to lead to a recovery in sort of real-time power demand, which obviously has been pretty elusive so far and therefore, has slightly diluted the overall argument on power demand growth in Germany and in Europe.

Thanks for the questions. First, on the U.S., we have no development on federal land for projects on private land, as you pointed rightly out, there are aspects here and there where you need a federal permit.

For some others, you don't need it. We have no, let's say, negative experience so far.

But what we have made clear is we will not take an FID without all permits being in place. And if you need a federal one, you need a federal one.

Of course, the teams are currently looking into the entire development pipeline to see where it's easier and where it's more difficult. But I cannot give you firsthand experience because we have not taken an FID in wind so far this year given our strict criteria on all the aspects I mentioned.

Second, on Germany, it's difficult to exactly give you the amount of power, which is consumed by those who now benefit from part of the relief measures, which have been announced like grid is for everybody, but lowering the taxes to the minimum permanently for the energy-intensive industry, but they are also working on other compensation mechanisms. I would roughly say in total, it's probably around 20%, 25% of the power demand, which is some way or the other positively affected by some effects.

But it's -- this is not the only driving factor of power demand. This is probably a prerequisite to give the energy-intensive industry confidence if they want to, to invest also in Germany again.

I think what is currently more of a driver is the muted industrial activity. So especially in areas like metals need for cars and so on.

So if we see their positive development, then probably in the next coming years, the more relevant factor, the long-term confidence on government support for the energy-intensive industry is more important for long-term investment.

Wanda Serwinowska, UBS. Two questions from me.

The first one is on the AR7. Do you see the supply chain ready for AR7?

And how much commitment do you have from the supply chain? And the second question is on the phaseout technologies cash flow.

It turned negative this year. So Michael, what should we expect in terms of the run rate of the cash flow -- adjusted cash flow from the Phaseout technologies over the next few years?

So Wanda, on AR7, I cannot talk for the industry. I can only confirm that when we enter into an auction, we have pre-agreements with supply chain that we know what the prices are when we trigger the project.

So we will not run into an auction without pre-agreements on pricing of the most relevant components. So for what we're going to bid into it, supply chain is secured.

Well, now on the phaseout technologies, I mean, first of all, what is important is, and we already stated that in the last call that clearly the operations of our assets are cash flow positive. So otherwise, we wouldn't operate them.

Secondly, if you remember, when we introduced the KPI, we said that over the tenure until 2030, the cash flow of the phaseout business should be neutral. And therefore, I mean, you have seen a very positive cash flow in 2024.

This year is negative. And as you know, we are already preparing the business for the phaseout.

You should expect higher costs in the years to come, which will then come down and therefore, also the cash flow should improve. So basically, the profile of phaseout technologies is a strong one in '24.

Next 1, 2, 3 years that's probably poorer and then they are improving towards the end of the decade.

I have 2 questions. So the first one is on the gas capacity auction coming in Germany.

How big do you think the tender has to be or what kind of shape does it have to take in order for you to -- profitable action for you? Because there's a quite a bit of supply.

It looks like you have a secured 3 gigawatt, but also some of your competitors talk openly that they secured the low pricing. So just thinking like if it comes at 5 gigawatt, then do you think it could be a profitable tender or you have to be much bigger to create a bigger demand for this project?

And the second question I have on your 2.5 gigawatt battery pipeline. Can you talk a little bit about timing, CapEx and possible contribution of this pipeline?

How quickly can you bring it? What it cost you?

And what could be the contribution?

Yes. Piotr, thanks for the question on the gas capacity, the minister last time she went public on gas was she wants to reach an auction volume of above 10 gigawatts.

But coming back to, I mean, what I said for us, bidding in the auction since we have full flexibility on the supply chain, it's not important to reach the gigawatt, but to have good investment. So if the auction volume is lower, we probably do less in the beginning and later more.

But given the need, and we also expect the security of supply assessment coming out pretty soon that the number tends to be higher than lower what is needed to ensure security of supply in Germany in the current situation. So my expectation is currently in auction volume before we get to a full-fledged capacity market where, of course, then you can also incentivize new builds long term will be above 10 gigawatt.

And I always said we never want to target a market share above 25%, 30%. On the batteries, I mean, these projects are in advanced development, and that is the status where you typically also discuss with your suppliers and contractors.

We have not taken FID. So I don't want to speculate.

But as I said, COD is potentially before 2034, the entire 2.5 gigawatt. The battery case, especially in Germany, look very attractive, and you earn a lot in the first years.

But we're going to update on that when we have taken FID. And now coming back to the long-term earnings projection we have given.

So we need certain investments, which are still not uncommitted to reach the 2030 EPS guidance if we want to do it with investments and not by additional share buybacks. So please, it's also not a new positive news that we have the EUR 2.5 billion, but it's actually also needed to find good investment opportunities to deploy capital prudently.

Peter Crampton here from Barclays. Two questions, if I may.

The first one was just around kind of the new German government we have and whether you've seen any kind of encouraging signs of change, particularly relating to this EUR 500 billion kind of infrastructure fund they're planning. And then whether that kind of auction by year-end for new capacity, whether you feel it is something where government realizes that returns have to be really good for kind of the related commitments.

On the second question, we now have The Big Beautiful Bill in the U.S. We obviously still need to hear around this kind of German kind of capacity auction, but whether you feel you're getting more information allowing for that update on kind of capital allocation kind of early next year, whether there's some kind of early thoughts on that.

Yes. So let's start with the German government.

This is a very high-level question. I would say, directionally, we are happy with the direction that they now strengthen security of supply and industrial competitiveness and of course, a more cost-efficient and synchronized build-out of renewables in sync with the grids.

I think it's the right direction of travel. What I hear between the lines is that, of course, for those aspects where you need agreement with Brussels like industrial power prices, but especially also the gas build-out, they are in almost daily, weekly discussions with the European Commission.

But this is for us also a black box, but I see lots of engagement there. So I would say, in order to -- for the energy policy, tick the box, we, of course, other than the right direction, also want to see implementation after the summer break.

So probably it's good in another 90 days to say whether it's good or not. But so far, direction of travel is right.

Your second question was on capital allocation. Yes.

I think, as I said, it's not only that we need clarity on the executive order. We also need to see how the tariff situation is evolving.

I mean I think it's too early to say that we have reached more or less a stable situation. You can also be surprised by changes every day.

So it will probably take some time before we feel confident to give you numbers on capital allocation. I mean before we said end of the year, early next year, I think that is still the right time frame because that would also give us full visibility on the German capacity remuneration.

Two follow-ups for me, please. One is on flexible generation.

The midpoint of the guidance for that business is EUR 1.2 billion this year, and it's EUR 1.35 billion in 2027, and you've done EUR 600 million thereabouts in H1. Given the increased volatility in intraday pricing that you're seeing and opportunities to make money around that, do you think that there's a possibility of more exceeding the midpoint of the guidance this year rather than coming underneath it?

And then also, if you think that, that volatility is more sustainable than when you set the original 2027 guidance of EUR 1.35 billion. Do you think there's now a bit more upside to that compared to when you first made it?

And the second question I have is just on AR7. It would seem to me that with your extension projects like Rampion 2 and [indiscernible], you probably have some of the most cost competitive projects that could bid into the auction.

Would you agree with that statement?

Well I'll start with FlexGen. I mean, look, -- that's too early to tell for the entire year because you know volatility is, to some degree, difficult to predict.

Yet, I mean, what we always said is that we duly expect markets to get tighter, and that is something where our flexible generation fleet and also our phaseout business are benefiting from. And what you, for example, see this summer is that, yes, you have very low prices during the day, but during the night, almost all units are running.

And that is indeed obviously something where those assets are benefiting from. And what you also see so far in H1, there is kind of offsetting effect when you have lower winds in Europe, you do see upside on the flexible generation side.

And that is the pattern we observe, and we also expect to go forward. But I would say with respect to 2027, we feel comfortable with the guidance we have given so far.

On AR7, Olly, let me put it that way. I mean, we are very happy with the pipeline we have.

I don't want to speculate about relative competitiveness. But just make a comment, I think in offshore, it's still the right -- it's still the time to be more on the conservative and cautious side, given that you talk about billions of investments.

And so far, I mean, as we also have clearly said in this call, we are making good progress on our projects. And I think top priority is to keep it that way.

Great. Thank you, everyone, for dialing in.

Thank you, Markus and Michael, for the time today. And of course, the IR team is at your disposal for any further questions you might have for the rest of the day or in the coming days.

For those of you that head out on vacation in the coming weeks until Labor Day, I wish you a great holidays and hope you are recharging fresh, and I'm sure we see plenty of you during the upcoming conferences and roadshows that we are scheduled from September onwards. Have a great day, and see you soon.

Bye-bye.