BKW AG (BKW) Earnings Call Transcript & Summary

Very good morning, dear participants, ladies and gentlemen, here at the Circle Convention Center of Airport Zurich, and in the live stream. A warm welcome you to the BKW's Capital Markets Day. It's great to have you with us. My name is Marisa Fetzer. I'm Deputy Head of BKW Media Relations and Newsroom. I'm delighted to guide you through our Capital Markets Day today. You can expect 3.5 hours full of energy related to BKW's strategic plans for the next 6 years, meaning up to 2030. I would like to give you a brief overview of today's program, which is basically divided into 4 parts. First of all, our Chairman of the Board of Directors, Roger Baillod kicks off the Capital Markets Day with a look at the history of BKW and where the company stands today. After that our CEO, Robert Itschner will present the strategy of BKW followed by our CFO, Martin Zwyssig on the presentation of the strategic financial plan. Later this morning, the other members of the Group Executive Board of BKW will show how they are implementing the strategy in their respective business segments. We will conclude the Capital Markets Day with a question-and-answer session. The participants in the live stream are welcome to hand in their questions during the presentation on a continued basis or like the guests on site during the Q&A session. As we all know, energy comes in many forms, including food and drink and exercise. And that's why we're planning a break at about 10:30 this morning of about 20 minutes and at the end of the event, around 12:30, a lunch buffet will be served to the guests on site just outside of this hall. And now I would like to wish an energetic Capital Markets Day with BKW and I shall leave the stage to our Chairman of the Board of Directors, Roger Baillod. Please, the floor is yours.

Good morning from my side, too. Ladies and gentlemen, this is the first Capital Markets Day since we have composed an almost completely new Group Executive Board with a new management structure. It's with great pleasure that I would like to welcome you today here at this Capital Markets Day. Now what is our history? On this slide, you can see the beginnings of BKW. That's the construction of the Hagneck, run-of-river power plant on Lake Biel, which has been completely replaced as shown on the right of this slide. So we can look back on over 125 years of success. We have evolved from a traditional energy producer and supplier to a broad-based group that has developed into a provider of comprehensive solutions in the fields of energy, infrastructure and buildings. As you may know, we have undergone an accelerated process of growth and also transformation, particularly in recent years. Now why have we decided to present a new strategy to you today? Our current strategy period expires in 2026. Furthermore, we have realigned the Group Executive Board and the Management structure. The goal was primarily to better align ourselves with changing customer needs, but also to support our strategic repositioning and the necessary transformation. And last but not least, to take better account of the needs of our employees. The Services business is now directly represented on the Group Executive Board and a new Energy market business unit has been created, and you will see later on why we did that. Now why did we develop the 3-pillar strategy over 10 years ago? More than 10 years ago, we were under considerable pressure. It was foreseeable that electricity prices would be lower than our production costs in some cases, meaning that we would incur major losses. So we decided to secure a stable anchor, that means to keep the Grid business and at the same time, build up a related field that would guarantee us greater independence from electricity prices, but would also allow us a broader positioning in terms of investment requirements and market dynamics. Ideally, we were looking for a related field that would also provide us with medium-term synergies in terms of technical expertise and market access as well as customer-oriented solutions. We then built up the third pillar, the Services business, and we have increased the proportion of activities not dependent on electricity prices with a manageable capital investment, attractive growth potential and good earnings. Thereby, we created a more robust portfolio. The Services business perfectly complements the other 2 pillars. In the Energy business, which is by far our largest segment, we see the highest growth potential. But this also comes with higher opportunities and higher risks, including also earnings potential. Then the Grid business is our anchor with high capital requirements, limited growth potential, but also with lower opportunities and lower risks. In relation to the capital invested, the Grid business delivers a lower, but more reliable return at stable cash flows. So where do we stand after these 10 years? In addition to the aforementioned points of independence from electricity prices, profitability and earnings power, we have achieved a unique positioning that enables us to cover the entire value chain of the energy transition from electricity production to trading and energy efficient distribution to our customers' buildings. How have the 3 pillars proven themselves? In 2013, we had to make a major write-off in production due to the steady fall in electricity prices. But then we not only achieved a stable business performance in the following years, but we were also able to gradually increase our earnings slightly. In particularly, during the 2015 to '19 period, we would not have been able to compensate for the losses incurred in production without the stable anchor of the Grid business. By the way, it should be noted that BKW is the only electricity producer that has paid dividends continuously over the years and has never needed to revert to the so-called rescue package. What is the expected environment in the future? Following the major disruptions, we're still facing new challenges, but also great opportunities. For example, we see the further acceleration of the transformation of the energy system, new and increased dynamics in the energy markets, the growing demand for infrastructure expansion, and last but not least, the needs of our customers, investors and the public sector have also changed. These challenges and opportunities are being addressed with the BKW strategy 2030. In summary, the core premises for the new strategy are clear and are the following: we will continue to build on our successful 3-pillar approach, we will once again increase our focus on the attractive growth market of the Energy business, we will focus on quality and efficiency, meaning excellence and sustainability, and we will continue to do all this in line with our slogan, "we make living spaces worth living in." I'm now delighted that our reliable improvement management team under the leadership of our CEO, Robert Itschner, will present our new strategy to you in detail today. Thank you very much for your kind attention. [Presentation]

Ladies and gentlemen, a hearty welcome to the Capital Markets Day of BKW from me, too. I'm very happy about your interest. And I will follow on from the comments made by our Chairman, Roger Baillod and I will talk about the details and the further development. I will look at 3 trends that are relevant for us, that offer major challenges, but major opportunities at the same time. And then we will talk about our strategy, BKW Solutions 2030. And then our CFO, Martin Zwyssig will present the figures from the strategic finance plan. Who are we? We are a Swiss company with activities abroad. We have a strong Swiss space with 12,000 employees, 8,000 of which work in Switzerland, 3,500 more in Germany and the rest in the neighboring countries in Europe. We are active in the 3 attractive growth markets, of which you will hear today, energy, infrastructure and buildings. And we can make a major contribution to energy transition. We, BKW are the largest listed energy and infrastructure company in Switzerland. What do we do? In Energy Solutions, I will talk about the names later. We develop in market sustainable energy solutions for our customers using our own diversified production portfolio as well as assets from third parties. We are the third largest energy producer in Switzerland and we have a good position in the European market. The second pillar is Power Grids. Security of supply is largely a function of great availability. BKW offers outstanding reliability and is laying the foundation for the energy transition in our distribution area. In Switzerland, we supply 1 million people and companies reliably with electricity. And then the third pillar, infrastructures and buildings. Thanks to this pillar, we are now a major player in the market of planning, implementing and maintaining buildings and infrastructure, whether it's energy, mobility, heat generation or water, we can offer solutions for complex projects from a single source, if required. With our 270 locations, we are close to our customers, and we can activate the necessary resources and skills of over 9,000 employees from the respective networks. Our 3 business areas are solidly positioned in their markets; energy, infrastructure and buildings. We have simplified the individual business areas. You can see there is some overlap although their respective value chains and business models differ greatly. We adjusted some of the names. The Energy business is now called Energy Solutions, which expresses our ambition in this area to grow with customized energy solution. Then Grids will be power grids in English and services will be called Infrastructure and Buildings. We are replacing a very general world of services with a more specific term, and we are referring to our target markets. To sum up, I can say that we are in an excellent position today. BKW Group has delivered solid results over the past years. We have a solid balance sheet to something that we have always placed strong emphasis on. Then we have the fourth portfolio, diversified portfolio that gives us stability and resilience. We have continuously improved our governance in terms of transparency, competencies and important processes such as compliance and security and reliability. Still speaking about our business areas. In Energy Solutions, we have not only mastered the energy crisis very well, but we have actually emerged from it stronger. We have improved and strengthened important processes such as our risk management. Our production portfolio, I mentioned it, is diversified in terms of technologies and in terms of the countries in which we operate, and we are robustly positioned, thanks to our strong Swiss space. In addition, we have taken further successful steps to grow in the large customer business in Switzerland and internationally. In the Power Grid business area, our grid availability has always been good and has been improved over the years. In addition, we have significantly invested into digitalization and optimization of our processes, when it comes to planning and constructing our grid in order to meet the increasing demand of energy transition. At Infrastructure and Buildings, we have already communicated the fitness programs to further strengthen our positioning and performance. We will have successfully completed these programs by the end of the year and we will catch up with the results of 2022 by the end of this year and gradually increase our margins in the coming years. What will we focus on specifically? Further improve our processes in the project business, we will optimize costs, we will actively manage the remaining risks in the backlog and cease opportunities and continue to pursue active portfolio management, and always prioritize profitability over growth. BKW is strongly positioned, and we can continue to develop from a strong base. Let's now move on and look at some of the trends. In order to identify specific opportunities and position ourselves accordingly, we see 3 trends. They're not the only ones. These areas represent challenges on the one hand, and offer great opportunities on the other hand. Let's have a look at the changing needs of our stakeholders, customers and the general public ad politics. We see our customers changing from consumers to prosumers, who produce energy themselves. In Switzerland, there are now around 250,000 PV systems in operation. In Germany, more than 3.5 million. On the other hand, large customers, in particular, expect specific solutions for their energy supply as well as stability, speed and flexibility in a clear focus on sustainability. We also see this in the investors who are quite rightly more and more, including sustainability and transparency in their investment decisions. In addition, regulatory requirements for transparency and reporting are rapidly increasing. A few examples that are relevant for us are the ordinance on climate reporting in Switzerland, the Supply Chain Due Diligence Act in Germany. And of course, the new European regulations surrounding the Green Deal, the EU taxonomy or sustainability reporting standards. Of course, dealing with these new regulations, is also a challenge for BKW that we take very seriously. Ultimately, we see it also creates incentives for investing in sustainable projects, which offers us new and attractive opportunities. Then we see a massive increase in the demand for energy efficiency and resource efficiency, particularly in the Industry and Buildings. That's the trend. Then the accelerated transformation of the energy system. That's the key trend. So it remains interesting and exciting. Just to give you an idea of the magnitude, we're showing here a few figures. And on the left-hand side, you can see the growth of the commitments to responsible investing that have increased in recent years. Companies like yours and the UN Principles of Responsible Investment, the PRI, their clear commitments to the increased inclusion of environmental, social and governance factors, ESG factors, and underlines the importance of sustainable business management. Many institutions, banks, investment companies, pension funds, et cetera, are among the signatories of these PRIs. And many of the institutions you represent today, in fact, are signatories of the UNPRI. The other 2 illustrations show the annual investment volumes required in Europe. The market volume is accessible to BKW are, of course, only a part of this, but the figures are impressive and show the enormous demand in the market. Increasing energy and resource efficiency. The second trend needs great investment, especially in the building sector. We have huge potential. The office for energy speaks of 40% of the total energy consumption that is used by buildings in Switzerland. So we have to take measures in the topic of optimized energy concepts or intelligent building technology like this example, this building showed to increase energy efficiency. Then climate conscious, construction, energy-efficient renovations, et cetera, to reduce energy consumption of buildings. In industry, we are speaking of electrification, documentation of processes, especially the CO2-intensive processes for heat and transport and use digitalization and intelligent planning tools. When constructing infrastructure and buildings, there are growing demands to focus on circular economy right from the planning stage. With regard to the transformation of the energy system, we have presented examples of the investments as a result of electrification and decarbonization, renewable power generation, in particular, wind and photovoltaic production is being massively expanding. It should not only replace conventional thermal generates, but also provide the immense additional need for electricity for the electrification of industry and mobility. The grid must be expanded as a logical consequence. And we think that PPA, Power Purchase Agreement, that business will grow in the future. That's something that is promoted within the EU to offer price security. And now we are back to our stakeholders. The grids must be expanded as a logical consequence of more noncontrollable low-emission electricity generation that's huge. Here, you can see on the graph, the investments in Europe up to 2030, we are speaking of EUR 200 billion by 2030, and then the production of clean fuels like hydrogen, where we still have small volumes. But with regard to growth, we're expecting the highest growth rate. We can see that BKW is well positioned with our competencies to contribute the necessary changes, but also to benefit from them. So much, ladies and gentlemen, on the current good positioning of BKW and the overarching trends. Now let's have a look at the strategy, BKW Solutions 2030. What is at the heart of our BKW Solutions 2030 strategy? Quite simply, as the name suggest, we want to be active players in the energy transition and we want to offer solutions for the new customer needs, solutions for energy and resource efficiency for the transformation of the energy systems, so we want solutions for the future that can be implemented today. Our BKW Solutions 2030 strategy is based on 3 core elements: growth, excellence and sustainability. We are setting priorities for our growth and we're defining clear excellence principles on how we want to manage our business in order to be successful. We are also putting sustainability at the center of our activities. Each element is important for BKW, but it's a triad of growth, excellence and sustainability. That is the real key to achieving our ambitious goals. Let's take a look at this first callant, a large customer, if we want to be able to offer a long-term contract for green electricity. This partner will be part of the value chain of this customer. So we have to act sustainably and prove that we act sustainably. And the same principle holds true for customers who make planning for large projects in infrastructure. I will look at each of these core elements now. Growth is the first one? What do we want to do? Compared to the last strategy period, we are once again placing a greater focus on growth in the Energy business, where we will drive growth and increase the EBIT contribution to CHF 650 million by 2030. This means that in Energy Solutions, we will significantly expand our range of sustainable tailored energy solutions in Switzerland and abroad with a focus on our core markets, Germany, Italy and France. We will expand the management of our own plans and those of our customers. In particular, the management of flexible assets will create a clear added value here. Our production portfolio is central to both points, which is why we will continue to expand it. We will strengthen production in Switzerland, further expand new renewable energies and invest in new flexible assets. In Energy Solutions, we differentiate ourselves through our strong portfolio, our expertise in the production and marketing of electricity and our track record as a reliable and financially solid partner with Swiss reliability. In the power grid area, we will gradually increase annual investments to meet the needs of the energy transition. In the long term, this will also lead to a moderate increase in the EBIT contribution and further strengthen our power grid as an important stabilizing factor in our portfolio. This means we will further strengthen our grid and rely on modern processes and smart technologies to implement the expansion quickly and cost efficiently. And we will still offer high availability. We will also offer our customers flexible solutions and an excellent customer experience within the regulatory framework. In the Infrastructure and Buildings division, we are already strongly positioned in the region, Germany, Austria and Switzerland, both in terms of size and expertise. Therefore, we will continue to grow organically and strongly improve our EBIT by continuously increasing profitability. In addition, we will invest selectively in organic growth. In BKW Engineering, we will further expand our services in general planning, in infrastructure and building construction. Therefore, further strengthening our position as the largest planner of energy and resource efficient infrastructure and buildings. In Infra services, we will be active in communication, mobility and energy. We will push growth primarily in the areas of renewable energies and batteries. We see enormous potential here. In Switzerland, we will also further strengthen our footprint in the areas of electrical, heating, ventilation and air conditioning and refrigeration and expand the prosumers business, photovoltaics, et cetera. Also we will expand the high-margin service business. Ladies and gentlemen, with these developments in our 3 business areas, we are addressing the energy transition as a whole and we will continue to grow. Our solutions cover the value chain of energy, infrastructure and buildings. Overall, we will thus achieve a sustainable EBIT of CHF 1 billion by 2030. The second of the 3 core elements is excellence. Here, our [indiscernible] is profitability before growth. We want to grow and we can grow, but not at any price. We want to grow on a profitable solid basis. We are consistently tapping potential for cost optimization in the group and business units, and we will use the economies of scale. Finally, we are ensuring that our own processes grow with the increasing demands and guarantee us resilience and stability in the future. The second point here, no less important, is the consistent focus on customer needs. This might sound [indiscernible] for you. But the changes in our customers' needs and our aspiration to offer them solutions mean that we have to be very close to our customers and have the ability to react flexibly and quickly and offer them all the advantages of digitalized processes. We want to develop innovative and customized solutions for our customers. We are their long-term partner and offer them the highest quality. The third element completes our excellence framework, active portfolio and risk management, which is central for us. Due to the rapid growth, especially in the Infrastructure and Buildings business, active portfolio management is essential for implementing our strategy and achieving our performance targets. We have, therefore, already introduced processes for continuously reviewing our portfolio in areas that do not show the necessary performance will be monitored closely. There might even be a decision that we do not have a strategic fit with one or the other unit. Risk management is and remains a key factor to our success. We saw this during the energy crisis. Here too, we are consistently developing investing in people. On the basis of this framework of excellence, profitability before growth, consistent focus on our customers and stringent portfolio and risk management, we will continue to grow profitably and sustainably. Sustainability is the third core element of our strategy. This topic is not new for us. But with the adoption of the new group strategy, we have set ourselves new and even more ambitious sustainability targets. The 4 overarching strategic priorities in the areas of climate, energy, nature and people are the core of this ambition. The foundation, however, is a strong governance -- strong management. In the area of climate, the most important topic is our pursuit of net zero emissions as a group. I will talk about this when looking at the next slide. In the area of energy, we will continue to consistently invest in renewable and efficient energy infrastructure. This contributes directly to our climate targets. You will hear more about this from my colleagues later in the program. And then nature, this topic is becoming ever more important. We are committed to promoting natural ecosystems and biodiversity. We will manage our own and BKW Managed Business units in a nature-friendly way and invest in the restoration of natural ecosystems. This is nothing new. As an example of our Hagneck power plant shows, as part of the renovation, we also built a biotope. You see this on the slide here and our Chairman of the Board talked about it. We cannot be successful without healthy, motivated people, our employees and partners. So our 4 strategic direction is people will continue to develop with regard to occupational health and safety, diversity and inclusion, we will invest in our own competencies, leadership and talent development in order to be able to develop further and to counter the looming shortage of skilled labor. In short, BKW aims to be an attractive employer, offering modern working conditions for motivated employees. The foundation is, of course, at least as important. The governance, our good corporate management, we will have to continuously review and optimize our organizational structure as we did in the past, and we have to do this on a regular basis. One target that we worked on is how we can achieve net zero emissions as an entire group. We will achieve by 2040, net zero in Scopes 1 and 2, in Scope 3 by 2050. However, since 2040 is still a long way off, we have also set ourselves the goal of having the CO2 intensity, the amount of CO2 that would be output of our business activities in Scopes 1 and 2 by 2030 compared to 2022. We have identified a number of measures to achieve this. You see them on the slide. The most important one, the further expansion of our renewable pulp production, the electrification of our vehicle fleet that is quite sizable with 3,000 vehicles and then an accelerated co phaseout. So these are the 3 core elements of BKW Solutions 2030, the triad of growth, excellence and sustainability with which we want to differentiate ourselves. With this, ladies and gentlemen, let me come to the conclusion of my presentation. We are ready for the next chapter of our development. We have done our homework and BKW is strongly positioned. We can and will benefit from the significant growth potentials of the Energy, Infrastructure and Buildings markets. With our BKW Solutions 2030 strategy, we offer solutions for the energy transition, thereby creating value for our customers, investors and the public. We will continue to grow. We will continuously improve the quality of our solutions and consistently use sustainability as an opportunity across the group. We will strengthen our Swiss space and increase the value of our company through selective and strategic growth abroad with a focus on the current core markets. We will grow profitably and sustainably. Thank you very much for your kind attention. I would like to hand over to Martin Zwyssig, our CFO, who is going to talk about the figures for our strategic plan.

Good morning, ladies and gentlemen, A warm welcome from my side as well. Welcome to today's Capital Markets Day. I'm delighted to take you through the strategic financial plan for our Strategy Solutions 2030. Now as an introduction, here's an overview of the key financial targets of our strategy. We are aiming for an EBIT of CHF 1 billion in 2030. We will generate an operating cash flow of more than CHF 5 million in total from 2025 to 2030. The development of the strategy was always based on the premise that the operating cash flow must be sufficient to finance our investments and secondly, to continue to pay an attractive dividend. This requirement resulted in an investment framework of around CHF 4 billion for the strategy period 2025 to 2030 whereby CHF 2 million will be invested in Switzerland roughly. Now this slide shows you the following meaning how our 2030 EBIT ambition relates to the 2023 result. Then how EBIT is distributed across the business segments; and thirdly, how the investments are allocated. So let's first compare EBIT 2023 versus EBIT 2030. We aim at generating CHF 1 billion in EBIT in a normalized market environment. And that's important to note. However, our result is in part significantly dependent on the energy market and also on regulatory influences. For this reason, we are specifying a range of CHF 850 million to CHF 1.2 billion. Measured against our ambition of CHF 1 billion EBIT in 2030, we're aiming for an increase of around 60%. This increase is primarily driven by EBIT growth in the Energy Solutions and Infrastructure and Building business segments. I and my colleagues from the Group Executive Board will come back to the individual business segments later on. To this point, as you can see on the right-hand side, we've talked about the ambition at group level and now about the investments. Of the CHF 4 million that we plan, CHF 2.5 go to Energy Solutions, CHF 1 billion to Power Grids and 0.5% to Infrastructure and Buildings. So this was the ambition of the group. And now I shall split it up a little bit down to the individual business segments. In Energy Solutions, we want to achieve an EBIT of CHF 650 million by 2030. The range here is between CHF 550 million and CHF 800 million. This is primarily driven by volatility on the energy markets and also the market price developments and how do we want to achieve this? We're expanding our customer solutions and flexibility business, and we're also broadening our asset base, meaning our production portfolio. Then power grid. Here, the EBIT is regulated. For reasons of transparency, the figures are, therefore, shown without the Swiss Grid shareholding, which contributes approximately CHF 35 million to EBIT every year. The increase in EBIT by 2030 is due to the additional investments and the related increase of the RAB, meaning regulatory asset base. These investments enable the transformation of the energy system and the safe replacement of existing plants. Then in Infrastructure and Buildings, you'll see a minus CHF 40 million. Here, this is not representative as a point of departure. As already explained in the half year communication, we can confirm that there is a positive trend in this segment. We expect EBIT of around CHF 50 million in this business segment for 2024. Now profitability is our focus, profitability before growth. We want to further increase our operational excellence and we want to do this through continuous improvement of existing processes and structures, leveraging economies of scale in the company network, for example, by centralizing nonoperational functions such as purchasing, procurement, HR or IT and through active portfolio management to ensure the fit within the group. By systematically pursuing these measures, we're convinced that we will be able to increase our current profitability to 8% in this segment. Now how is the ambition of CHF 1 billion in terms of EBIT relate to the context of previous years? You will see 3 large blocks here. Far left, before the energy crisis where BKW achieved stable and slightly increasing EBIT in the range of CHF 380 million to CHF 413 million. During this time, electricity prices, that's the light blue line, were lower than they are today. Price volatility and the value of flexible electricity generation were also significantly lower. Then there is in the middle, the impact of the energy crisis column, where BKW achieved very high results in the Energy Solutions by reacting quickly. In 2022 and 2023, we can say that these were exceptional years in this context because there were upheavals on the energy market that were characterized by very sharp rise in electricity prices. Again, the light blue line and increasing price volatility. Then far right, the strategic horizon part, that's where we expect rising results for the following reasons. In the Energy Solutions business, we will benefit from electricity prices hedged at a high level until 2026. That's the yellow curve. Furthermore, we expect that the further expansion of renewable energies will result in a higher level of price volatility and that the value of flexible electricity generation is increasing. We're taking advantage of this development by expanding our customer and flexibility business, and this will be explained later on by Stefan in his presentation. In the business segment, Infrastructure and Buildings, we're improving the profitability of the existing business with clear measures. We are focusing on organic growth and targeted strategic inorganic growth. To me, it is very important not only to focus on profitability, but also on the capital employed, which you can see on this slide. Infrastructure and Buildings, that's top left, generates the highest return on capital employed as it is less capital intensive, but a more labor-intensive business. About 3 out of 4 of our employees work in this segment. Then Energy Solutions delivers a comparatively low return due to the capital intensity of production and the return on capital at Power Grid is limited due to regulatory requirements. However, this business segment generates stable cash flows for grid maintenance and grid expansion. So overall, the 3 business segments create a well-diversified profitability portfolio for BKW. On this slide, you can see an overview of all 3 business segments and the allocation of investments. In Energy Solutions, this offers a high growth potential. However, due to the capital intensity of the business, for example, investments in power plants, only average profitability of 8% to 10% can be achieved. The results and cash flows, however, are very attractive. By volatility is at its highest and stability as its lowest due to the drivers mentioned. The risk factors are electricity prices, and price volatility. We are investing over CHF 2.5 billion. That's more than 50% into this attractive business. Then the Power Grid business offers lower growth opportunities due to the capital intensity of the distribution grid and the regulated business. So therefore, profitability is also limited. However, the business delivers very stable earnings and cash flows. We are in investment. We are investing over CHF 1 billion or around 25% of total investments into a stable and profitable business. Then on to infrastructure and buildings, which offers medium growth potential due to the relatively low capital intensity of this business. The business offers a highest profitability of all business segments. The business segment is able to deliver stable results and cash flows. The risk are mainly the business cycles and the availability of material. We are investing over CHF 500 million or around 15% of total investments into primarily organic and selective inorganic growth. Now how do we finance this strategy. I've already mentioned it at the very beginning through our own cash flow. In 2030, BKW will generate an operating cash flow of CHF 1 billion. With this strong cash flow, investments can be self finance and dividends can be paid out. Nevertheless, financial debt will increase as you can see in the chart in the middle. Despite a very good operating flow, financial debt rose from around CHF 1.9 billion to around CHF 3 billion. The reason for this is that we are building up our liquidity reserves by CHF 1.2 million. This liquidity reserve is growing with the expansion of the Energy business and gives us security as we saw during the energy crisis, despite the additional financing of CHF 1.2 billion, net debt will actually decrease slightly to CHF 800 million by 2030. On the right-hand side of the slide, you can see the maturity profile of the currently outstanding bonds. Thanks to our A rating, BKW has unrestricted access to the debt capital market. The diversified maturity profile allows BKW maximum flexibility for financing the aforementioned liquidity cushion until 2030. What's not included in these figures is the syndicated credit line to the tune of CHF 1 billion that we renewed last spring also served, this also served -- this also serves as a liquidity cushion. The facility has a term of 5 years until 2029 with 2 extension options for 1 year each as well as a firmly guaranteed increased option of CHF 0.5 million. We are planning to continue our stable and attractive dividend policy over the recent years. As mentioned in the beginning, one of the financial premises of the Strategy 2030 was to generate sufficient operating cash flow to finance the investments required for growth and also to enable the continuation of the existing dividend policy. We are aiming for a payout ratio within the target range of 35% to 50% of net operating profit. That is minus the STENFO. This is the decommissioning and waste disposal fund. This concludes my statements. We are and will be a very solidly positioned group. We are aiming for a group return of capital employed of 8%. We have a solid balance sheet with an equity ratio of more than 50%. And we have an A rating, which gives us the necessary financial leeway. On this note, I would kindly thank you for your attention, and I'd like to hand over back to Marisa Fetzer. Floor is yours.

Thank you very much, Martin. Dear guests, ladies and gentlemen, you have just heard from Roger Baillod and this explanation is that BKW is now in an excellent position to comprehensively shape the issues of the energy transition with its complementary business segments, and you've heard from our CEO, Robert Itschner, how BKW is continuing. This holistic focus on the new energy world with its Solutions 2030 Strategy, and that BKW will continue to offer solutions for the changing needs of its customers, investors, the society for the transformation of the energy system and for the growing demand for energy and resource efficiency. With a focus on the 3 core elements, growth excellence and sustainability. And you have heard from our CFO, Martin Zwyssig what the strategic financial plan for BKW is to implement this strategy. As you've heard, the strategy is called BKW Solutions 2030. In the next part of today's Capital Markets Day, you will find out more about the solutions BKW is offering. One after one, the members of the Group Executive Board will now present the strategic approaches with selective examples in their respective business segments. And thus, they will show how BKW is addressing the needs of the new energy world. We will start with the business segment, Energy Solutions and its 2 business units called Energy Markets and Energy Production. But before I hand over to Stefan Sewckow, Head of Energy Markets, I would like to show you another film. Let's roll. [Presentation]

A warm welcome from me to all of you. My name is Stefan Sewckow and I'm responsible for energy market. I'm going to present our activities and strategy in the energy markets a very important business area for BKW. By far, I'd like to give you an idea of what we want to achieve in the next few years with regard to our 2030 Strategy. BKW has been very successful in recent years. So what is the secret of our success? I will try to give you an answer in the next 15 minutes. Our success is based on 3 key elements for our business. First, we're strongly positioned in the business of standardized energy solutions for our customers. In other words, products with a high degree of automation. We have a high level of expertise and experience in structured energy solutions for large customers that is energy solutions that we sell to individual customers. Secondly, we have a lot of experience in energy management and a very successful in marketing our own as well as third-party systems. So systems that belong to third parties as you could see by looking at the figures. Thirdly, we are very active in many European wholesale markets with different commodities and products, we proved that during the various crisis, how successful we were with this approach. So BKW is resilient and well positioned for the future. What does our energy markets portfolio look like? Many of you are familiar with terminology used in financial industries such as asset-backed trading, origination, drop trading, what does that mean for BKW? Our business with large major customers or origination and sales. Here, we work with energy producers, energy supply companies, industrial customers, renewables and flexibilities with a contract volume of over 5 gigawatts. We have an important customer base in the area of small customers and SMEs for pooling, we bundle virtual power plants and offer various market access solutions, and we have a very solid business base with international wholesale partners. And of course, we also manage our own BKW assets. So a very solid business base, as I said, with wholesale partners. We manage our own assets of around 3 gigawatts as part of the space trading activities, hedging activities in other words by optimizing production and flexibility. Here, again, we are well positioned in the market. And then we have a lot of experience in the large customer business. So we can say that through the 3 customer pillars of corporate business, SMEs and the use of the wholesale market, we ensure high value contribution in the corresponding value pools. And in particular, we achieved a very good diversification of business activities through our broad positioning in the wholesale market. But in addition to the portfolio itself, there are, of course, other things that are important for our success. Let me mention our risk management and our qualified and committed employees, our market intelligence and our expertise in modeling of assets and markets as well as our digitalization along the entire process chain. The energy markets portfolio is already top in class in customized energy solutions in asset marketing, in trading and in risk management. I would like to give you an idea of our product solutions in the area of our wholesale business. Say, for example, we offer full supply solutions, taking over the main risks for our customers, offering secure prices. Also, we offer structured solutions for producers especially renewables producers and buys within the framework of individual contracts. So we have many individual contracts PPAs, Power Purchase Agreements, I will look at them in more detail later on in my presentation. Also, we are well positioned when it comes to direct marketing. We have various gas storages, and we use the flexibility by pooling small, flexible plans. When managing BKW assets, this is about price hedging and optimization of flexibility is up to physical deliveries. We're active 24/7 around the clock and optimize our assets, and we offer various products that optimize availability. And we also use the wholesale market to optimize our portfolios. All of this ensures our robust and long-term success. As I said before, I'd like to explain the topic of PPAs in more detail in the context of our corporate customer business. As it is a central importance in the market of renewable energies and also essential for supplying corporate customers with green energy. On the left-hand side of the graph, you can see wind farms, who generate electricity when there is wind [ P ] when the sun PV plants, when the sun is shining. So we have an oversupply of energy at some points in time and what is relevant is to use this flexibility and balances out. And we need price or customers need price stability. So price volatility is not what customers want. On the other hand, the right-hand side, you can see that industrial companies demand green energy more and more, and they want standardized and structured products with price security. BKW manages both interest, bundles risk, develops need-based products and combine these in so-called PPA contracts, Power Purchase Agreements. Now let's have a look into the future. What are the key trends in our business area that we need to be prepared for. The further development of data-driven business models and the constant emergence of new data centers, then the electrification of the heating transition. The increase in electric vehicles, the energy required to produce green hydrogen, an enormous expansion of renewable energies. They all have one thing in common. Flexibility becomes ever more important. And then the demand for structured the Energy Solutions increases. Our customers need green and structured solutions as well as long-term price security. These changing conditions mean that flexibility and green solutions will become more important and more valuable. At BKW, we are well prepared for these challenges. Let me explain what -- the increase in the value of flexibility has to do with this. The increase in renewable generation and the increasing complexity in the energy systems are essential here. Here on the left, you can see the drivers for the increase in volatility, wind and PV expansion and the effect on prices. A lot of wind and sun means low prices, not much wind and sun means high prices. And we use the flexibility in our pump storage plants. We use this in the times, where energy is not available in the new energy system by renewables, we use the stored energy. In the middle graph, you can see our analysis of volatility and price fluctuations. In the time before the energy crisis before 2020 and '22, we did not have so much volatility and. On the other hand, during the energy crisis, the energy system changed price volatility. Also on the futures markets increased. [indiscernible], we could show that we have been able to use this phase and understood the markets. In the long-term, after the energy crisis that we had, we think that we will be faced with a higher price volatility in the energy markets due to the megatrends. The changed overall conditions have one thing in common. They offer opportunities for BKW and increase the value of flexibilities. What potential do we expect? The expansion of renewable energies in Europe will continue and will almost double between 2025 and 2030, reaching 1,100 gigawatts by 2030 and the expansion of enormous growth potential far beyond our strategic horizon, the expansion path to 2050 will lead to a quadrupling of installed renewable energy capacity. So this means an enormous growth potential for Energy Solutions in the area of purchase agreements, PPAs, managing price risks for our customers and contributing to decarbonation. We are ideally positioned to participate in the growth market of renewable energies with comprehensive customer solutions in our product portfolio. Ladies and gentlemen, we are ready to grow with the market. Now what are our strategic priorities. We're growing by expanding our solutions for large customers and flexibilities and we diversify in the wholesale markets and our strategic focus on green and flex solutions will play a significant role in this. We are building on past successes and are ideally positioned to provide answers increasingly complex customer needs. Our product portfolio forms the basis for providing answers to the megatrends of the market environment. The central pillar here is our well-diversified trading portfolio in our customer solutions business. In the following, I will show you some examples of our business activities in the area of green and flex solutions. I'd like to start with the business activities of green solutions. In this important business area, we are broadly positioned to meet the needs of our customers and take advantage of the opportunities offered by the wholesale market. We will triple our business activities in the area of corporate PPAs solutions for our large customers and the area of offtake PPAs solutions for renewables producers, we will grow to 15 terawatt by 2030. Direct marketing now our portfolio, the solutions for the integration of renewable generation into the trading markets, we will grow to 6 gigawatts of installed capacity by 2030. The management of this portfolio relies on a well-diversified portfolio in which we use state-of-the-art data analytics and algo technologies. Let me show you a concrete example. Wind farm [indiscernible] to demonstrate how comprehensive our business activities are when it comes to PPAs. This year, we signed a PPA for our wind farm [indiscernible] with an installed capacity of 288 megawatts and an annual electricity purchase volume of 200 gigawatt hours. We manage the volatile generation risks of the production plant, with thus ensure the continued operation of a renewable energy plant after the expiry of the funding and make a significant contribution to decarbonization. Thanks to our expertise in the field of structured customer solutions, we have developed a risk minimizing product for Deutsche Bahn's energy procurement. We supply Deutsche Bahn with 20 megawatt of baseload electricity, a guaranteed amount of energy, 365 days a year with the same amount of energy every hour. And we supply this energy from renewable resources. This is only possible for us, thanks to the professional management of profile risks and our good portfolio diversification. This is energy transition made by BKW, and a Swiss energy company, we are also helping to improve the punctuality of the German railways by reliably supplying energy to the German railways. But at least as important as our other focus Flex solutions with a steadily growing flex portfolio hydroelectric plants, battery storage and flexible thermal plants. BKW is ideally positioned for the future, and we will expand our portfolio by 600 megawatts, in particular, in the customer solutions segment or third-party assets, we already manage batteries, pool small-scale generation plans and manage gas storage in the European energy market. Participating in the market environment with high volatility offers us enormous growth potential for our business activities. Here too, we're using our existing expertise within BKW. We are ideally positioned for the Flex solutions megatrend. Flexibilities are not only used in the wholesale market, we also use flexibility, for example, to reduce our risks in the renewable portfolio and to manage them in the best possible way or to enable customer solution products like the one I just presented to you, Deutsche Bahn. We think and act in a network way. We already have battery storage system from external customers with terms of up to 10 years under contract. We manage these systems and the energy market with high volatility in a profit-maximizing way. So you can see, ladies and gentlemen, these are energy solutions with which BKW is shaping the future. We grow by expanding our customer solutions business. This is not just a logo for us, but already part of our business success today and will remain so in the future. The success of recent years will continue, thanks to the megatrends in the energy market. megatrends are the expansion of renewable energies, the need for flexible assets, the demand for individual customer solutions and the changing conditions in the wholesale market, central hub of the European energy markets. They confirm us right, ladies and gentlemen, we'll continue on this path and grow consistently in the relevant energy markets to ensure our goal of sustainable and positive development of our contribution to the result. Thank you very much for your kind attention. I would like to hand over to Philipp Hanggi.

Good morning from my side as well. My name is Philipp Hanggi, and I'm Head of Energy production. Now energy production is a business part of the Energy Solutions business segment because every solution starts with more than just an idea, but also with the energy that is required to realize an idea. We produce this idea for you and for our customers. For example, at the power plant Hagneck, you've already heard it or seen it today, the birthplace of BKW on Lake Biel. It's also a very good example of how it is possible to produce electricity and to be in harmony with the natural environment. Our portfolio today goes way beyond Hagneck, of course. We now produce in 6 years in over 100 power plants, 9 to 10 terawatt hours of electricity per year, 5 terawatt of this volume in Switzerland and the rest in countries like Germany, Italy and France, but also in parts of Scandinavia. We are operating along the entire value chain from the initial idea over to planning, construction, operation and even the dismantling of plants. We do this for our own portfolio, but also as a service our customers or third parties. Now if we look at the portfolio, we can see that it consists 3.4 gigawatt installed capacity of all kinds of energy for example, run-of-river, reservoirs, pump storage plants, but of course also wind and solar power plants, nuclear energy and fossil power plants flexibility such as coal and gas. Even today, the portfolio is made up of 85% of production that is CO2 free, and which is very important to note, more than 50% of the systems can be used flexibly. In other words, they can produce electricity when it is needed most. Whenever the conditions of wind and some are favorable. So we're very diversified in our portfolio across different European countries and also across different technologies. It is exposed differently on the market with baseload, flexibility or regulated renewable production. So we have many plants that are emergent and directly linked to the market. As a result, the portfolio is very robust and has proven itself in a wide variety of crisis, for example, during the energy crisis in 2022. So the portfolio really helped us to get through this crisis unharmed. However, it is also a great basis on which we can build upon to be profitable and sustainable in our businesses. Now what are the megatrends that will dominate our future? What are the challenges? What are the opportunities? First of all, the first chance or opportunities, electrification, but it's also a challenge because much more electricity will be needed in the future due to the digital age and also due to automation. Then secondly, it's the decarbonization. So it's not just about new electricity that supposed to be CO2 free, but also the entire portfolio needs to save CO2 emissions up to 2030. You have seen that in our strategy. So these 2 missions do not contradict each other. But of course, it is quite difficult to get them in line. As you have heard before, we have lots of wind and solar plants, but we also need more flexible plants in the future. However, this flexibility also need to be decarbonized. Coal and gas will come from the grid in Europe, but this means actually lower degrees of flexibility. And this leads to the third megatrend, which is the direct consequence of this. More flexible plans will be needed, these must produce CO2 free. And this also led to a transition phase, meaning to a fuel switch. So coal will be replaced by natural gas and natural gas is supposed to be replaced by hydrogen or gases that are produced artificially with renewable electricity. Not what does -- do these challenges mean for us? Sorry, I think I skipped one slide. First of all, I would like to show you a few figures in order to show you how big these issues are actually for us in Europe. We start with power plant fleet with 3,200 gigawatt until 2030 and even 2050, this will more than double. As you can see in the light and dark green columns, this is wind and solar. These are growing very strongly in both absolute and relative terms. Then you can see the flexibility that's only -- will only grow slightly to about 600 gigawatts for the time being, but it will change internally because of the share of renewables that's at the very center. That's mainly hydropower and also batteries. And in the future, it will be even more batteries, meaning 46% by 2030 and even more than 80% by 2050. When it comes to batteries, it's even more dramatic. We have now 20 gigawatt installed today and we will face a 6.2-fold increase by 2030 and 2050 even to 130 gigawatts. Now on to the strategic directions of BKW. First of all, we are strengthening our Swiss base with hydropower. This is very flexible. We can -- we want to invest in this and promote this, then secondly, we will invest heavily in growth of wind and solar power, and we also transform our flexibility within our BKW system. When it comes to volumes, we are now having 3.4 gigawatts, and this will increase by 1,300 megawatts to 4.7 gigawatts in terms of product. I'd like to go into the 3 parts or focus points. First of all, the Swiss routes. The Swiss share in the portfolio is expected to remain high, mainly to hydropower. And I'll go -- run you through this slide, what we're planning in Switzerland. In Switzerland, we also continue to invest into wind and power -- solar power as far as the situation allows. Here it is extremely important that we do not only have solar power or renewable power in -- in summer, but also in winter times. Then we are, of course, active along the entire value chain. And it also is a topic of dismantling in Switzerland. This means that despite the growth of 40%. The main part is done in Switzerland. We have major projects in Switzerland, for example, the wind farm in Tramelan with 12 megawatts, which is 60% of wintertime production, then we have the ground-mounted solar plant at BelpmoosSolar, at the airport of Bern with 35 megawatts and this will be commissioned in 2026 and when it comes to Alpine PV projects, we have MontSol project with a winter electricity part of 40%, which is very good for us. So the Alpine region becomes more and more important. It is more difficult in terms of production, but winter electricity is important when it comes to this segment. Now the core project in Switzerland is actually the Trift project. BKW has more than 50% in this project and the measures have to be promoted and driven forward. We will have a new dam and a new reservoir with a volume of more than 200 megawatt -- gigawatt hours of capacity and they can be used or are available during wintertime mainly. So the energy strategy of Switzerland means that we have to produce 2 terawatt in wintertime, and a large part of this can be supplied by this project. Then the second pillar of our strategy is, of course, wind and solar green growth in the focus countries of BKW to the tune of around 600 megawatts, what -- that's planned here by 2030. This is an increase of more than 50%. We will also broaden our bases along the value chain, not only planning, but also construction, operation and maintenance. A few years ago, we installed a program that's called capital-light, meaning that we will open up our investments to financial investors up to 49%, for example, to pension funds because this grants us a better capital efficiency. For example, if pension funds invest in this because they're also interested, of course, in green investments. I have another example, the wind farm in Cerignola that's in South of Italy, 125 megawatt. It will begin to be constructed next year. It's one of the biggest or will become the largest wind farm in Italy. 60% of the more than 300 gigawatt will be produced in wintertime, and the plant will be commissioned at the end of 2026 as planned. The third part is transformation of flexibility and expanding flexibility. We are investing heavily into battery solutions more than 500 megawatts of batteries by 2030 that is and we are also transforming our own flexibility. We are examining right now the switch from coal to gas and then maybe from gas to hydrogen or other synthetic gases. It is important to us that the flexibility part is not lower than 50% within BKW, so that we can be in line with the solar push and capitalize on this in terms of our portfolio. We have a few examples here. For example, next year. The first battery will go into operation that's in Wunsiedel in Germany, Oberfranken 30 megawatt, it's 2-hour battery with 60 megawatt hours of storage capacity. Further batteries will follow to the tune of around 100-megawatt even. So in summary, we can say that over the coming 6 years, we will invest CHF 2 billion into our Swiss basis into wind and solar production and into the transition of our flexible systems. We will expand the battery portfolio and therefore, build up a solid basis for our customers and also for our activities on the energy markets. I would like to thank you very much for your kind attention, and I'll hand over to Marisa.

Thank you very much, Philipp. Ladies and gentlemen, dear guests, you have heard from Stefan Sewckow, how BKW is growing in the business you need energy markets by expanding customized energy solutions and Philipp Hanggi has just explained how BK's business unit energy production is expanding renewable energies in Switzerland and also other European countries investing in flexibility and strengthening its production portfolio in Switzerland. Now speaking of strengthening. Before we move on to the other business segments and the Q&A session. I think it is now time to refuel our personal energies. We have a buffet for you with food and drinks just outside of this hall, we shall take a break of about 20 minutes now. We shall continue at 10:50. So let's see you back in this room at 10:50. Enjoy the break. [Break]

Welcome back, everybody. I hope you were able to recharge your batteries for the second half of this Capital Markets Day on the BKW Solutions 2030 strategy. After hearing how BKW produces and markets energy, we will now turn to the distribution of energy, and thus the business area, power grid. Before Corinne Montandon, Head of Power Grid, shows you the relevance of the electricity grid for the transformation of the energy system, you can sit back for 44 seconds and watch a short video. [Presentation]

Ladies and gentlemen, a warm welcome. In the next quarter of an hour. We will be talking about the distribution grid. I'm Corinne Montandon, I'm the Head of Power Grid. The grid is the connecting element between production and consumption of electricity. For example, here in this room, thanks to the distribution grid, we have electricity. The light is on and thanks to the distribution grid. We have access to electricity in our homes, because the distribution grid is the backbone of our energy system, and our life is more agreeable with electricity than without. Martin Zwyssig, our CFO, has given you an impressive demonstration of how much we are investing in Switzerland is part of our BKW Solutions 2030 Strategy and how much we as BKW Power Grid will contribute to the EBIT by 2030. I will now show you who we are at BKW Power Grid, what we do and how we implement our strategy. We operate the largest distribution grid in Switzerland. Our greatest length of 22,000 kilometers. There are lines and facilities from high voltage to low voltage. We have 98 substation and 6,000 transformer stations in our grid. We own and operate grid in a country of Bern, Jura Soliton, and Basel land. This also makes us one of the largest public utilities in Switzerland, supplying electricity to over 1 million people and companies. Our basic supply customers are mainly supplied with electricity from our own power plants. Our grid has a high level of availability. Our customers are supplied with electricity without interruption for 99.997% of the time. That is an outstanding, a very good level nationally and internationally. What are our trends as grid operators. We, as grid operates look at the energy transition. We are saying it's happening in rural areas and in our neighborhoods, why is that so customers want to make a contribution to renewable energy and support the energy transition. They install a PV facility. They drive an electric car. And they install a heat pump. And these are exactly the elements. These are the components that leads to peak loads. PV charging stations and heat pumps, they are installed in our homes. And that's why we are saying energy transition is happening in our neighborhood. For example, in the grid of BKW. It also perform a expansion of renewable energy production leads to new production patterns and volatile electricity flows. There is no more one-sided energy flow from the power plant to the place of consumption. It's decentralized. In order to live up to this, today's infrastructure has to be massively expanded. Let's have a look at the 3 main drivers for the grid expansion. We adopted the Electricity Act in June and the renewable energy, including hydroelectric power, these will have to supply 45 gigawatt installed capacity in Switzerland. You can see this on the left-hand side, the electrification of mobility and heat will develop enormously. You can see the forecast developments here. The grid of the future will have to be or with this extra capacity. Let me give you some idea of the figures today. The grid in Switzerland has 10-gigawatt performance. You can see the capacity of the grid with 10 gigawatt is not sufficient. The grid has to be expanded. What are our strategic directions for the benefit of our customers. The transformation of the energy system can only be successful if the grid infrastructure is adjusted to the new framework conditions. This is our first direction, we reinforce and expand our grid. The renovation of the system cannot be solved just by expanding the grid. And this would not be the best option because of the high cost. We want to expand the grid in an intelligent way, and this is our second direction with intelligence solutions. We will not offer too big of a grid. So intelligence is important to optimize the energy system and the components can be included in such a way that they're part and parcel of the overall system. Our goal is to make it possible to -- for our customers to access the new grids at to maintain the high availability of our grid. Let me give you a few figures to show our strategic directions on the right-hand side. By the year 2030, in our grid, we need to build 2,500 kilometers. And we need to reinforce them or expand them. These are 10% of our low voltage lines and 15% of the medium voltage lines. That's a lot. For us, as grid operators, the long-term development is important because our grid infrastructure lasts 40 years. So today, we have to build our grid in a way that it still works well in 40 years' time. The BKW grid is located in rural areas, and there are many homeowners there. And there are a lot of private PV facilities, et cetera. And we have 28,000 PV facilities in our grid. If we extrapolate this and look ahead to the year 2030, according to our estimates, this will be 128,000 facilities in our grid alone. What do we do specifically to enable energy transition. Let me give you 3 examples. 25 PV facilities are connected to our grid per day. More than 600-megawatt is the installed capacity from PV. We have 300 projects for grid expansions in the low and middle voltage grid planned or executed. And we reinforce investments by looking ahead into the future so that we can bring about this transition of the energy system and we have more climate-friendly electricity in the future. The second example comes from the Symitar. And it shows our optimization, modernization of the distribution grid in 1 area. There are facilities that have to be renovated due to age. And we use the opportunity not only to renovate these parts and facilities, but to increase the performance. This was the case in the substation and [indiscernible], we renovated and we increased the performance at the same time. Thanks to this combination of renovation and reinforcement, we can use synergies. And this is exactly what we call intelligent expansion of the grid. The substation in [indiscernible] has an important function for the supply security in the region. It supplies large areas of the Simmental Valley and it sees to it that the local ski resorts are reliably supplied with electricity. And the system is getting more complex. One answer to the increased complexity is digitalization. We are not only investing into the physical expansion of the grid, but also into digitalization. We expand our technological competencies and I'm proud to say that our technological solutions are state-of-the-art. I mentioned that before -- up until 2030, 2,500 kilometers of lines have to be reinforced and built. And we asked where will they be placed? What is the most cost-efficient route? The distribution rate of [indiscernible] BKW is not only the biggest of Switzerland, it's geographically very demanding. Our grid goes across the whole countryside, up and down, through cities with different geological and geographical factors. How much does a route cost? For example, the cable route, we developed an algorithm that can come up with good cost evaluation. Geographical, geological factors are included, and our software makes a massive contribution for the cost effective implementation of the energy transformation. Let me summarize. In line with our strategy, BKW Solutions 2030, we are shaping the grid of the future for distribution grid. We are well prepared for the challenges that the transformation of the energy system brings for us as grid operators. We are maintaining the availability level of our grid. In other words, our customers will continue to be able to rely on an almost 100% uninterrupted power supply also in the future. In order to implement our strategy and to reach our goals by 2030, we will invest CHF 1 billion. And now I'd like to thank you for your kind attention, and I will hand back to Marisa.

Thank you so much, Corinne. You've just heard from Corinne Montandon, how BKW is enabling the transformation of the energy system in the distribution grid. Now let's talk about the approach of BKW Solution 2030 strategy. It takes a comprehensive approach to the needs of the new energy world, and this also includes forward-looking infrastructure and buildings. This brings us to BKW's third and final business segment, Infrastructure and Buildings, with its 3 business units: Engineering, Infra Services and Building Solutions. And you may expect, and you're absolutely right, we're going to show you a brief film. And after that, I'll hand over to Martin Fecke, Head of Engineering. Let's roll. [Presentation]

Ladies and gentlemen, a very warm welcome from my side. I'm Martin Fecke. I'm the Head of the business unit Engineering, 118 locations in Germany, Switzerland and Austria. That's what we cover. We're the largest provider of integrated architectural and engineering services with 4,000 employees. We plan forward-looking, livable, climate-friendly infrastructures and buildings, and we call ourselves a network of excellence. We combine simplicity with innovation, fueled by the expertise, experience and passion of our employees. Let's take a look at our performance or our services. We are a network of excellence and we are the largest solution provider for general planning in the region of Germany, Switzerland and Austria. Our services in the engineering business also include buildings and infrastructures. We supervise projects from conception and planning through implementation and operation up to the dismantling of plants. We cover all planning and management services in the fields of building construction and also infrastructure. And we offer consulting and specialist services as a cross sectional function. We have a broad customer base, which gives us great stability. We have customers in industrial sectors, but also the private customers, project developers and the public sector in cities, in rural areas. We have infrastructure operators and other clients. Now what are our strength? Thanks to our wide range of services and expertise also in specialist disciplines, we can provide our customers with all the necessary planning services from a single source, or as we call it, 1 phase to the customer. We cover a wide region in Germany, Austria and Switzerland, and we can ensure proximity to our customers and projects due to our size and the high level of expertise in complex and international projects, and all this makes us a stable partner for our customers. Let's have a look at the trends of the future. The trends in our business environment are the increasing demand for planning, but also for consulting and management services in terms of complex projects. If we look at the needs of our stakeholders, we can say that they, our customers, do not always have the necessary capacities. And more and more, project management services are being outsourced. Furthermore, the increasing complexity of projects is leading to a growing demand for specialist skills. The necessary energy and resource efficiency will require more modular construction with a high degree of prefabrication in the future. That was the example of the video of the building, sky rise building in Hamburg, for example. Efficiency is also being increased in planning and control processes through the use of artificial intelligence, AI. The transformation of energy systems calls for sustainable, but also resilient infrastructures, energy-efficient refurbishment of buildings and also the electrification of heating and transportation. Now, let's talk about the market size. We have a huge market. The market size in the Germany, Austria and Switzerland region for architecture and engineering services was estimated at around CHF 100 billion in 2023. If we look at our service areas, the market volume in infrastructure is about CHF 36 billion. And in building construction, it amounts to about CHF 69 billion. The largest market is no doubt in Germany. The market sizes in Switzerland, Austria are almost identical. On the graph, you can also see the individual areas that are necessary for our activities. We cover most of them, and the areas that we do cover are very attractive. Now what is the addressable market potential? The addressable market potential for BKW Engineering is around CHF 48 billion, with an expected growth rate of around 6% by 2030. This may not sound as a large increase. However, we must note that this is a very fragmented market with many small providers. So, the market share of the top 5 companies is around 8%. And BKW Engineering, ladies and gentlemen, is among these 5 top companies. As already outlined in the trends, there is a very high demand for comprehensive planning and specialist expertise. We are a network of excellence. And as such, we are in a position to serve these trends, and we will steadily increase our market share. Let's talk about the strategic directions. These are the following. We have a huge market potential, as I said, with which we can build also on the trends. Now, our first direction is the expansion of general planning and project management in building construction and infrastructure in our core markets, especially for complex and large projects. This expansion of specialist expertise is particularly in the areas of sustainability, thermal planning, building physics and landscape architecture, but also the targeted development, expansion of expertise and capacities in architectural and project planning in Switzerland and also is 1 of the directions we want to embark on. We have a huge order backlog of 21 months, which goes to show how well we are on track. This will double our revenue. It supports our strategic direction. And in the perspective of up to 2030, as I said, this will double our revenue with a target profitability of roughly 10%. Now in the following, I'd like to use some projects to show you that we are already working on projects today that meet the challenges and the requirements of the future. So there is the challenge in the future to fulfill these expectations. This is the project example from Hamburg. We plan a large project, a high-rise building of 62 meters. It's the highest hybrid high-rise in Germany, and the building has a gross floor area of 36,000 square meters. And we used large amounts of soft wood. This is a sustainable building material grows in Germany. It does not only save CO2 emissions, but it also regrows within a very short time. We are also planning forward-looking, livable and climate-friendly neighborhoods. On an area of 5.4 hectares, we are planning the largest private marina in the middle Rhine with 402 residential units and 240 boat docks. This project is an example of the so-called city of the future. And such cities of the future are combining high-quality and environmentally conscious and sustainable living with self sufficient and autonomous energy supply. Then let's talk about our significant specialist expertise. We have this specialist expertise for very special critical constructions. With the prequalifications and certification in this area is the planning of bridges for German railways for Deutsche Bahn. Of the 26,200 bridges owned by German railways, 1,200 are currently in need of renovation or replacement. 11,000 bridges are more than 100 years old. So, this is a clear possibility and opportunity for us to expand on this market. Durable, sustainable and robust constructions require an extremely high level of expertise. And this means that we can fulfill the expectation when it comes to the stability of such constructions. We can do this with our qualifications, with our staff, with our highly skilled knowledge and expertise. However, we're not only operating in Switzerland -- in Germany, but also in Switzerland and Austria. Here, this is an example of adaptation to a technical infrastructure. This is an example from Zurich in Switzerland over a length of 11.5 kilometers. We are planning the expansion of a CO2 neutral district heating supply for the Canton of Zurich as a part of [indiscernible] Energy Networks. Waste heat from treated waste, water, from the [indiscernible] Sewage Treatment Plant will be used at the energy source for 200 house connections. So we can use and maximize the efficiency and stability -- sustainability of heating networks. We also plan innovative concepts for the management and buildings and infrastructure. We have planned innovative concepts for the various projects on an area of 75 square kilometers. We have planned the energy supply for a test track for autonomous driving. With our solution concept called Power to Heat, we generate 6.2 megawatts of thermal power to supply this plant with energy. Power to Heat is as follows. This is efficient energy production, for example, more than is needed in the grid and to use it in a different way and to store it. And this stored capacity, this stored energy is then when it comes to the use of the energy for heating and other reasons. So this is streamlined with the energy producer and the consumer. And so in this way, we can prevent that peak loads do not have to be served by fossil fuels. BMW is our customer for this project. And we have received further orders from BMW to examine the use of this technology at 4 other locations in Germany, England and the U.S.A, and we will perform feasibility studies. And this goes on until about 2050. Let me come to the summary of our business unit. We are planning infrastructures and buildings of the future in a large addressable market. We are expanding our capacities when it comes to general planning and also project management. We are developing further our range of specialist expertise. So that is a huge growth potential there, and we're growing our architectural and project planning services. This leads me to the conclusion of my statements. Thank you for your kind attention. And I'd like to hand over to Sven Behrend, my colleague. Thank you.

Ladies and gentlemen, so this is the last leg of presentations. My name is Sven Behrend. In the next 15 minutes, I will talk about BKW Infra Services. I look at our services, our market, our targets, and I'll give you some very concrete examples of projects. Who are we and what do we do? We are a full-service infrastructure provider in Switzerland and in Germany for critical infrastructure. What do we mean by critical infrastructures? For me, critical infrastructures include everything that is important for people's lives and their well-being and that is necessary for the economy. We focus on energy, mobility, communication and water. So this is our focus. We service our customers over the entire infrastructure life cycle, from project planning, design and construction to operation, retrofitting and service. We offer our customers comprehensive solutions for implementing the energy, transport and heating transition. We stand for top quality, and we have a high level of technological and digital expertise. Who are we? BKW Infra Services, more than 1,500 employees throughout 30 locations in Germany and Switzerland and a decentralized organization, giving us closeness to the customer. Where and for whom do we provide our services? Our activities cover various steps in the value chain: planning, design, implementation, operation and also dismantling. Each step in the value chain requires unique skills we have. Our broad-based expertise enables us to offer services in all critical infrastructures. In other words, energy, mobility, communication and water. We serve a wide range of different customers, for example, grid operators in the energy sector, to state infrastructure operators in mobility and communication, to municipalities in the water supply sector. As a full service provider, we deliver added value to our customers, thanks to our expertise across markets, and we are firmly rooted both nationally and regionally. Maybe this is too abstract. 3 examples. When you're driving home and you see a power line, that's what we're building. When you take the train in a tunnel, you have excellent reception. We enable this with our tunnel radio solution, or many other examples. So we have a lot of useful contributions to make. So what sets us apart from our competitors? What makes us unique? What is special about us? It's our positioning as a full service provider for various critical infrastructures based on several characteristics. One is competence. Thanks to our system and product independent project and service expertise, we can cover the entire value chain of critical infrastructures. This means that we can offer our customers the best solution for their needs. Our know-how covers the entire infrastructure life cycle, from the idea and planning to service and dismantling. And we are active in various infrastructures. And we see that our markets are growing ever closer together. We call this convergence. And I'd like to give you an example in the area of mobility and communication. We offer holistic solutions. The customer wants solutions from 1 source. Quality is an important aspect -- critical resources, the available specialists, and they need appropriate qualifications. We invest a lot in training and further education of our employees in Germany and Switzerland. And we are proud to have our own training centers that have received multiple awards for their quality. We are at the forefront of the industry in the use of digital planning and project solutions such as BIM. By combining our harmonized and digital processes, we are able to deliver the highest quality. And this is not just our perception, but has been confirmed by our customers in various sectors. In summary, we are able to offer innovative and holistic solutions across the entire infrastructure life cycle. And this really makes us stand out against our competitors. What are the trends and drivers in our business area? On the 1 hand, we are seeing a strong market growth. I will show this in the next slide. We can also see an increase in complexity. We see larger volumes. We see higher demands on us as infrastructure service providers or general contractors. Let me look at the drivers of these trends, the stakeholders first. The aim is to create infrastructures that implement the energy transport and heat transition that have to be sustainable, secure and financially viable. Then, energy and resource efficiency. Our focus is quality and efficiency in project planning and implementation. Digitalization enables high-quality and resource-efficient solutions. Another focus of digital solutions, BIM is 1 of them that significantly improve the planning control and maintenance of infrastructures and give an efficiency gain. And then the transformation of the energy system. You heard the buzzwords decarbonation and electrification. This also trend towards more sustainability and the increase in the share of renewable energy as well as the electrification of heating and transportation are driving the transformation and expansion of energy and transportation infrastructures. Then, there are storages that are added to the grid. Hydrogen is added, and we need an expansion of the grids and our customers invest with a long-term horizon. And there's yet another trend, CO2-free production, the conversion of industries to CO2-free production. So I mentioned the growing market. And for you, it might be interesting to know what market volume we're speaking about. We are active in Germany and Switzerland with the total volume of approximately CHF 25 billion. The size of the market depends on the investments made by the infrastructure operators. As I said, they generally make long-term investments like SBB, Astra in Switzerland, or [indiscernible] in Germany and others. In dark blue, you can see the biggest market energy and grids, CHF 17 billion. Other markets are mobility, water, communication, the volume there is CHF 8 billion. What is the addressable market for BKW? CHF 8 billion smaller. It is CHF 8 billion smaller than the total market because our customers do some of the infrastructure work themselves. And we can see that there's a steady strong and sustainable growth until 2030 and beyond. For example, we have the growth market energy in Germany driven by the energy transition, renewable energies, et cetera. Here, we see a growth rate of 7% over the next years. Growth of the Swiss market, that is driven by grid and road expansion and rail technology. Here, we see a growth of 3% per year. If I look at energy transport and heating transition, it will not end by 2030. These markets will grow after 2030. In Germany, for example, electricity consumption is expected to double by 2045 with the development of CO2 neutral industry. And this gives us a lot of planning security for our business. The growth drivers are mobility, electrification of transport. High investments will be made into railways and roads in Germany and Switzerland. And then water. Even in industrialized countries, water is becoming increasingly a scarce resource, and security of supply and quality are important. The market is very fragmented, and we can grow organically, the top five make up 1/3 of the total market potential. So what are the implications of our internal and external positioning for our strategic direction? Infra Services will grow with the market and above the market with 4 focus areas. First, grid infrastructure. We have very profitable activities. We will expand these activities around the energy business with the core areas, energy in Germany and Switzerland. Then secondly, renewable energies. We are very regionally positioned here. Grid connection is a topic. Grid management, operations management. There is a great potential in Germany and Switzerland. Thirdly, battery storage. We plan and build storage solutions for the grids, but also for flexibilities, and we do this by closely collaborating with BKW Energy Solutions. Then rail. Electrical rail technology, communication and electricity solutions and overhead contact line systems, et cetera. We are among the top 3 suppliers. Then our strategic priorities are reflected in our financial objectives. Our services are in demand. Our order books are very well filled, currently at around double our current sales volume and new orders are coming in. Our top line is growing over the next years, primarily through organic growth, our sales will grow 1.5x by 2030. The drivers are battery storage, grid expansion and rail. We are also increasing our profitability. Despite the strong growth, we are not compromising on quality. Our high-quality services and professional organization, therefore, ensure a margin well above the cost of capital. So I talked a lot about the strategy, the goals. Let me give you 3 concrete examples from our service portfolio alternate in Germany. There are 3 major routes for energy transition, and the West and most of the 3 North-South corridors between the energy generation plants in the northern Baltic seas and the consumption centers in the Southwest of Germany. And various service providers are in charge. We received 1 order from EnBW. We are responsible for the planning and now are in charge of the construction and commissioning. In Germany, with this line, we are really entering into new territories, as it were. So we have an AC/DC hybrid line, for example. And also so-called replacement construction. New routes with higher capacity in the existing environment. Implementation is very demanding. In only 3 years, we will build 48 kilometers with a volume of EUR 132 million. One challenge was the spanning of the railway lines in Manheim with 48 trucks without disruptions, without longer interruptions, we will be able to make it. And for us, this is a technical and organizational masterpiece. A second project shows large-scale battery storage. You heard from [indiscernible] that BKW is really expanding into this business area. Philippe showed that the growth is enormous. In Germany alone, we are expecting by 2050, a growth of 15%, with 50% growth in the next 5 years. This is an enormous increase. We have the project battery energy storage system, [indiscernible]. In the region of upper Franconia, so this is 1 of the biggest battery energy storage systems. BKW was commissioned with project development and the construction and execution planning. And now we are working on the planning, delivery and commissioning of the electrical infrastructure for the connection to the 110 kV grid. Here, you can see how dynamic we are. We as Infra services are part of the BKW solution strategy because in the next few years, we will plan and build, maybe even operate many of these battery energy storage systems. If you look at BKW as a whole and this business area, we have asset owners. We drive the development. We construct. And we will be a relevant player in this market. We're not only active in Germany, but also in Switzerland and I have a wonderful example here. The Albula Tunnel 2 building project. Here, we could really contribute all our expertise. This is a key project for Switzerland's railway infrastructure. The client is Rhaetian railways and the Grisons, and we were in charge with the installation of the electrical systems cables, technical systems and tunnel radio for the construction of the 5.8 kilometer long Albula Tunnel between Preda and Spinas.. The total duration was 10 years. We had 8 months for Infra Services. The work was done under extremely demanding conditions. We started in January. It was really cold. We were bundling our expertise in energy, communication and rail logistics by several Swiss Infra Services teams and enable the successful realization of the project. The result is -- it's a top modern tunnel. And a Swiss newspaper wrote, "5G reception in the tunnel is better than the [indiscernible]. You can even stream movies in 4K without interference. We are proud to make an important contribution to quality and reliability of the Swiss railway network. So this brings me to the end of my presentation. What should you take home? Let me give you a summary and the conclusion. We operate in a highly attractive and rapidly growing market. We offer solutions from a single source with a high level of expertise and best quality. We are top positioned as a service provider with long-term organic growth potential in Germany and Switzerland with attractive margins and positive cash flow. BKW Infra Services is ready to make the best possible use of the existing opportunities on the market for sustainable future and spaces worth living now. I'd like to hand over to my colleague, Antonin Guez, from Building Solutions.

Good morning. Hello, everyone. My name is Antonin Guez. I've been the CEO of BKW Building Solutions since January 2023. We've heard a lot about energy production, energy transport, infrastructure. Now we come to the consumption of energy. For example, a room like this, we have the sockets that brings out all the lighting or the building automation for the comfort and the convenience in a room like this. So that's we do. That's what characterizes Building Solutions. We offer solutions for new constructions, conversions and services in areas, for example, for private consumers, but also for industrial projects. It was built up over the past few years. Now we have a critical mass in Switzerland, which we've reached with about 4,000 employees. Just in Switzerland, we have 120 locations. We have a very strong and a very close customer proximity across Switzerland. We have become a leading building technology provider in Switzerland with these 4,000 employees. We have electrical engineers, for example, specialists in plumbing, installation, building automation, IT, PV installations and so on. Now we are also a strong corporate platform. And let me explain this. We do this for everyone, for all trades in building technology. If we look at the life cycle from planning to installation, consultants, maintenance and services, we more or less encompass everything. We have just heard about the planning of a district heating system, then that was done by BKW Engineering. So they focus on the planning, and we do the rest. We do this for 5 different trades that for HVAC, meaning heating, ventilation, air conditioning, then electrotechnical technology, solar panels, photovoltaics, automation and IT. That's mainly for smaller plans and not large-scale plans. Automation, for example, the management of this building right here and IT services, IT infrastructures for our customers. Our customers are very diversified. We have, as I said, private customers when it comes to building technology, so that's heating, ventilation, air conditioning, cooling, sanitation, district heating and so on. And we also have commercial and industrial customers. We offer solutions from a single source, but we also do IT services, for example, for SMEs and so on. So this gives us a diversified portfolio. We are focused on Switzerland. However, we are present in all regions. So we cover private customers up to wholesale customers. And with these 5 various trades, we can cover almost all the needs of our customers. Now what is our main strength? Before I explain this slide to you, I would like to talk about the market first, maybe, and explain why we chose this model. First of all, our markets are local markets. With private customers, they need someone who is in charge of their building technology. Then the cost structure, 50% of the costs are staff costs, our headcount costs. So therefore, our customers should not be too far away. Otherwise, we will incur many costs for their traveling to the project. So that is why we would have to act rather locally, then our market is very fragmented. And rather small. Our competitors are not exactly large companies, but it's rather SMEs and that large number of SMEs. So in our model, we have to protect entrepreneurial actions and also promote it. So 50% is staff costs, 50% is material costs. And this means in purchasing or procurement, this is a large lever that we have to really make the best use of. And this also rests on our market capability. So we have these 5 trades across Switzerland. We are the trusted partner for our customers. This customer proximity and the geographical coverage has just been mentioned, and we also cause economies of scale, of course. So we offer a platform to all the companies working with us so that they can focus on their business. So we have ERP, HR processes, management processes that are on this platform. We are a people's business. Martin Zwyssig has said this very straightly, we promote and encourage talents. We do talent promotion, talent retaining, and this is a very important issue for us. You have heard a lot about the megatrends of the future. What does that mean for Building Solutions? Robert has mentioned it before. We have more and more prosumers, people who consume, but also produce energy. For these customers, we offer everything: production with solar panels, then electromobility and the management. So all these trades can be covered by us, and we will grow in these phase. Then when it comes to energy and resource efficiency, that's actually the lever #1 for me in the fight against climate change. We actively promote building automation, and these solutions lead to an increased energy efficiency. And then thirdly, the transformation of the energy system. The electrification of heating and transportation. We've heard already a bit about it. Just to give you an example, heating, for example, be it in a building, be it for processes in the industry, it's usually done by fossil fuels, but this is now an issue to replace these fossil fuels other electrification. And it is clear that this calls for new solutions for example, heat pumps that are now installed in large numbers, but also transportation means that, for example, we install charging stations across buildings. PV is especially important when it comes to rooftop installation. So this expansion of decentralized renewable energy source is something that we promote. Our markets, I've already said that are quite large. First of all, we have the building technology and automation with CHF 26 billion and CHF 22 million (sic) [ billion ] in terms of IT. Building Solutions is 100% addressed by us, we do electro, about 40%, PV and solar, but also heating, cooling and ventilation about 1/4. And then building automation. These markets are growing rapidly, as we will see later on. In IT, we cover about 50% of the market. And we cover services and software, we can do a lot in this respect. Now what about the addressable market potential up to 2030, a plus of 18% when it comes to building technology from CHF 26 billion to CHF 30 billion and plus 32% in terms of IT. We will grow together with the market, but probably also overproportionately, be it organically but also sometimes inorganically. The market size is not that relevant for Building Solutions. I mean, as I said, the market is very much fragmented. The top 5 players have less than 20% in market share. And the situation has to be analyzed in terms of geography very closely. Now our strategic directions are the following. We have 120 locations in Switzerland that we cover, but we still have white patches. There are still regions where we're not active, market segments where we are not yet active and also trades that we cannot yet offer. These gaps will be closed in the future. The consumer or prosumer business will be expanded. That's the producer consumer business. As I explained before, we will also see new needs in this business and we will, of course, offer new efficient solutions. Then in the service business, we, as I said, very close to our partners. We are the direct contractual partner of most customers. So we're very much involved in the construction but we should be more active in recurring business. Here, we can do a lot and improve our business in order to accompany our customers on their journey. And we also will grow in terms of IT. We have a clear growth strategy. For example, cloud services, cybersecurity, artificial intelligent (sic) [ intelligence ] , we have a clear growth strategy that we will implement here in the IT business. Our order backlog is about 9.5 months. This sound a bit less than what we have heard and seen today already in engineering and infra services, but don't worry. It is actually a very gratifying figure. We just have a different business model. Our projects are small scale projects. They are active for a shorter period of time. But in terms of quantity, we are there, and the quality is especially high in our unit. We have a clear target. We will grow by 2030, organically, but also inorganically. And our target profitability up to 2030 will be around 6%. We have about 10,000 projects every single year and would like to just name a few of them because I think they are extremely interesting for you to see because they go to show how we work and what we do. First of all, when it comes to process and building automation for critical applications, that's for Lindt & Sprüngli. The chocolate factory, they wanted to double their capacity at one of their locations. And here, we took over the complete building automation for the new food processing facility. 5,000 data points. Maybe you don't know what it is. The data point is a thermostat and this supplies the data, clearly, then we have, for example, ventilation channels. It is filled with these data points, and it has to be controlled. So we have 5,000 of these complex building technology data points that we connected. It sounds like a lot, and I can tell it is a lot, but it is actually not the largest project that we have. What the best issue is here, the best point is that we have the understanding and the expertise to do this for our customers. So we were in a position to optimize energy consumption. And we were able to combine this in order to optimize efficiency. And this in an environment where hygiene requirements, for example, are extremely high. The second project is a rather traditional office building at the lake of Zurich, Swiss Re. It is a huge office building, 50,000 square meters of building area. We laid 750 kilometers of cables. It is really a classical project. The special thing about this project is the following; first of all, we use robotics and digitalization. Thanks to digitalization, we were able to make great progress to increase productivity. We used robots for certain parts even. So in fact, the productivity was increased. Such solutions cannot be used for any kind of project, but this is just to show you where we can go in the future. The volumes were very high, we were with CHF 20 million. This is a large order volume. We are one of the only providers in Switzerland that can do such a large project. It requires specific project management resources, great deal of know-how and also financial strength to do this. And the last example that I would like to show you is really dear to my heart. Also maybe because it's in the French-speaking part of Switzerland, Gruyère, and great project for Fromage Gruyère S.A. for the cheese production facility. We've done business with them before for ventilation and cooling and heating for example. But here, now have a PV project. The key figures are clear, 2,700 square meters in area, 1,400 panels for 600 kilowatts of installed capacity, that lasts for about 150 houses or buildings and at peak times, the production of the facility is still autonomous with this energy production. The special thing here is that this was a very natural for our customer to talk to us because we used to work with them before were a trusted partner, and therefore, they came to us, they install the solar panels. Now last but least, we really make these climate-friendly and energy-efficient buildings. We let them come to life. We are active in a very attractive Swiss market with almost complete coverage. We provide building technology solutions. And the special thing here is that we are absolutely passion to contribute in the fight against climate change. And we combine this with the passion for our entrepreneurial activities. And this makes us very attractive also for our employees. So on behalf of all our employees of Building Solutions, I would like to thank you very much your kind attention. And I would like to hand over back to Marisa. Thank you so much.

[Foreign Language] in this part of this Capital Day -- Capital Markets Day, we have -- you heard a lot about the engineering business and how it's expanding, its general planning solutions for future-oriented infrastructure, livable urban district and energy-efficient buildings. As part of BKW Solutions, 2030, the Infra Services business is expanding its capacities in the energy infrastructure in Switzerland but also in Germany and is growing in the battery storage business and in Electrical railroad technologies. That's what Sven Behrend been talked about. You've just heard from Antonin Guez how the Building Solutions business as a leading building technology provider, realizes energy-efficient buildings. By the way, this is also the case here at the historical here at Zurich Airport. Building Solutions was involved with several companies in various projects. For example, with the installation of PV systems, the operation and maintenance of electrical systems, but also with complex sanitary installations. The Circle is kind of an independent district between the airport and the city of Kloten, it covers an area of around 25 football pitches, and includes a service and health center, hotels, meeting zones, the Conference, Convention Center here and also a large park and above all, the Circle is an absolute showcase example of smart building automation, thanks to a so-called digital twin for all the systems available here. Ladies and gentlemen, with these remarks, we have concluded our detailed explanations of the BKW Solutions 2030 strategy. This is a strategy with which BKW with its 3 business segments, Energy Solutions, power grid and infrastructure and building is already offering solutions for the future along the entire energy value chain already today. BKW is thus increasing its operating result to CHF 1 billion by 2030 and is investing around CHF 4 billion over the coming 6 years. And at the very same time, BKW is pursuing ambitious sustainability targets with its strategy, and particularly, BKW as a group is aiming for Net Zero emissions in Scope 1 and 2 by 2040. How and why we do this? And what we actually do is explained by the BKW employees in the last film of today's event. And after that, we shall go into the Q&A session, but let's roll with the film first. [Presentation]

Ladies and gentlemen, now it's time for your questions. And before we start, I would like to give you some housekeeping information. In the live stream, we have a number of questions already. Thank you very much.

And you, ladies and gentlemen, in the room can ask questions, obviously. [Operator Instructions]. For the Q&A, I'd like to invite CEO, Robert Itschner and CFO, Martin Zwyssig on stage. Let's start right away with the first question from the live stream. The question was asked anonymously. It says here, according to EU taxonomy, nuclear energy is also climate-friendly and CO2-free energy production. It's plannable, it's not weather dependent. This is an advantage for winter electricity production. Why Is this type of energy production not included in the strategy? I'm not talking about new nuclear power plants that should be built, but investment into existing nuclear power plants in the EU area.

Yes, we are open to all technologies. We have a 14% share in [ Lipsstadt ] and [ Catena ] in France. If you look at the strategy period up until 2030, that's a short period. The further expansion of Nuclear power is not a topic for us in that time frame. But we look at the long range but in the next few years, we are really focusing on the energies that we presented today.

Is there a question here in the room, please wait for the microphone.

Stefan, you showed at the beginning, the capital intensity of the various areas and I would like to challenge you with the calculation that shows what the additional investments that you're planning between today and 2030, what they bring in additional EBIT. I start with grids with CHF 1 billion, you want to increase the EBIT by 14 million from 110 million to 140 million. 14% would be the capital yields. This is not really sufficient, I think. The net debt if we look at that, if all this was allocated to grid only then could we come up with this number. And then CHF 535 million to CHF 650 million. That's what they want to reach in Energy Solutions, CHF 115 million extra profit. That's a capital return of only 4.6% on the invested capital. And only in Infrastructure and buildings, that the starting point is a point that is too low, that is being restructured. Only there, the additional investments would be positive there, you would have a good capital yield of 48%. I'm aware that in Energy Solutions, you might be flying too high right now. And in infrastructure is too low. But if you make these extra investments, the capital yield is not quite sufficient.

Our CFO, please.

That was a very complex question. I'll try to answer it in a structured way. Let's start with Power Grid, CHF 1 billion. Additional information, currently, we are investing about CHF 130 million per year. And this CHF 130 million over the next years will grow to a level that goes towards CHF 200 million and then will stay around that. From these investments, a lot is maintenance. And the larger part is replacement of the existing systems and the smaller part is growth. Specifically for power grid there we have to take into consideration, but these are long-term investments. The return is not something that you will see over a short time in the power grid, we invest for 40 years. If we look at the business area, Energy Solutions, you mentioned the difference between CHF 535 million and CHF 650 million. The year's '22, '23, they were exceptional use. And if you go further back and look at what the return was before the energy crisis, there's a different ratio there. On a normalized base, it would be a different delta than what you say, the CHF 115 million. And then infrastructure and buildings, you know the story and the history and the results. It's not a normal result, and I told you that it's not a very capital-intensive business. But a personnel-intensive business. Power grid long-term investment A major part is maintenance, energy, CHF 535 million that's not normalized. And infrastructure and buildings, that's the capital intensity. There, we -- you should be happy or you are satisfied with the return. Does that answer your question?

I was a bit provocative, I admit and the starting point was abnormally high in Energy Solutions, but could you lift the veil? What returns do you assume if you look at the time horizon beyond 2030. The long-term return and similar to Energy Solutions, what is for you a normalized starting point. I tried to do this myself and I would see more than CHF 115 million additional profit. So could you lift the veil? Tell us what the secret is?

You know the EBIT or EBIT before 2021. They were between CHF 380 million, CHF 480 million, but BKW was a different company then where you want to start. I don't know, i'll leave this up to you. It's not an exact value. You know the volatility, the fluctuations. If you pick out 1 year, it might not be the right year. Look at the trend, look at the normalized situation, and then you would be lower than the CHF 535 million. After 2023, I showed you a picture on the ROCE 2030. It shows you capital, what the capital intensity is. We have scenarios beyond 2030.

Thank you. Thank you, Martin. Let's move on, I take a question from the live stream that's in English. [ Alessandro Foletti ], I'll read the question in English then translate it into German. [indiscernible] outgrowth of electricity demand, Slide 57. However, at least in Switzerland, demand has been going down in the last years. Two questions. First, how is the situation outside Switzerland? Second, when and why will demand grow again in your view? [Foreign Language].

There comes your answer. That is correct, 2022 to '23, the development was slightly negative a bit less electricity was consumed, but we can also say that we had extraordinarily warm winters and they made a contribution to the reduction in energy consumption. We would not assume that this would go on. But we are expecting a slow increase of electricity consumption due to the trends that we identified, the electrical mobility, et cetera, it will not be the same increase every year, there will be ups and downs, but there is a growing trend. And we can see this in other countries, too, because climate does not only affect Switzerland, but also Germany. In Germany, we had exceptionally warm winters, too. We have the same situation in Germany as in Switzerland.

Thank you, Robert. Another question.

[ Felix ]. I have two questions. PPA market, can you explain what the risks are in this market or in this business? If you purchase electricity with long-term contracts, how big is this business? And then the services business, you mentioned margins. Target margins, they seem quite ambitious with a view to the performance of the past years, can you talk about the elements that are included here.

Thank you. I would like to hand this question to Robert Itschner.

Now in the PPA business, there are various opportunities to shape the business with more or less risks. BKW has always been very conservative with regard to risks. All the PPAs are immediately hedged in the market and eliminate the risks. But our value creation is in the intelligent management of the profile risks that a customer has. And it takes competencies to do this. We have a very solid risk management that monitors this. We think that this business can be managed relatively risk-free. And this is also the intention of BKW not to take any risks that we do not understand or can manage. On the size of the market. I'm not sure there are various studies on how fast this grows, especially in the EU. In EU we speak of a market potential of SEK 2.5 million maybe somebody has exact figures. This market will grow sharply due to the fact that many producers do not have access to the energy exchange only large consumers have these competencies and the others made competencies from companies like ours to hedge prices in both directions. And therefore, we'll grow with the expansion in renewables.

I can add to this, to the growth. I tried to show this in my slide. Up until 2030, with regard to the installed capacity, we will have about [ 1,100 ] gigawatt we will grow to that. That's a quadrupling. And the overall political situation, if we look at that, it is true that the expansion of renewables cannot be done only by subsidies. It has to be market-based also. So market financed expansion of renewables. That will increase via PPAs and our own ambition. I showed this that until 2030, we will have 15 terawatt hours of installed capacity PPA based.

That was the first question, and there was a second question on the ambition level, infrastructure and buildings. We can see with a view to the past that this can be seen as ambitious, but this is really our target that we want to reach this profitability, and we think we can reach it. A lot of parts of our portfolio is already well underway, and it shows that this is possible, and that's why we set these goals.

Thank you, Robert. Any further questions?

[ Raul Helman CARNA Capital ]. For the energy production, you are planning 650 EBIT with a relatively high volatility probably linked to electricity prices. So implicitly, the electricity price will lead to the 650. How is this the case? Then you have talked about refurbishment or restructuring measures. What does that imply? What's the reason for this announcement?

[ Shall ] you take the first one?

Yes, please. Well, basically, we do not provide any information. Well, first of all, we have a team that is, of course, dealing with our forecast in terms of electricity prices. So per year, we have assumption and expectation of how electricity prices will develop over the next years. So this is something that is a bit of a secret for all the energy companies. But for us, if we look at the electricity price of 75, plus/minus with the expected volatilities we would feel at ease with these electricity prices.

Our primary ambition is, first, of course, not that we want to become active in the Anglo-Saxons world, we are active in France, for example, Germany. So we do have many languages in our group already, but we want to do this in English, mainly. So it is actually a pragmatic approach.

Thank you, Robert. Yes, please. There's another question back there.

Andreas von Arx, Baader-Helvea. Just one brief comment, and then I do have a question. The new goals 2030, CHF 1 billion of EBIT with 65% in Energy Solutions. And today, you focus on this segment as well. Wouldn't it be investor friendly to talk about figures and talk about the subdivision as well. That's just a comment. Now my question. It's the beginning of November now. We have heard many third quarter reports already by other companies, but you haven't reported it. So what about the guidance that you gave us? Where are we? The guidance, 700 to 800 EBIT is that still upheld? That's the first question.

Yes. The answer is yes, this is the current guidance.

So it will not be massively higher as it was the case in other years?

No. If this had been the case, we would have announced it and communicated it.

The division, infrastructure and buildings. If I just would like to summarize the 3 business segments. The revenue should be increasing by 50% by 2030. That's plus 6% of CAGR. And then we have the EBIT margin, that's also rising. And if I compare this with my notes from the Capital Markets Day 2021, we were talking of 5% and another margin rate. So the goals are more or less the same. Currently, you said, however, it's 2.5% margin this year. Now what is that much better this year then compared to the previous Capital Markets Day. What makes you think that you can achieve this? Why should you go down another road then your previous CEOs?

Well, I cannot really assess what the basis was in 2021, very openly and frankly spoken. We have a very solid analysis of the market that we performed. We have a management team. They come directly from this business, and this is a huge difference because these people really know the business by heart. And they can also assess the risks and opportunities in this business. I have a very long history and track record in the energy business as well. So this is certainly one explanation why we think we are very solidly positioned and why we have announced the figures as such. What we also have to mention is a 6-year planning horizon in this very industry is rather a long horizon, a long-term horizon. We want to be underway very fast in terms of the profitability goals. But I think as a management team, we are very optimistic that we will live up to the expectations.

One question about the grid segment. I think it links to the first question. The CHF 1 billion in investments. According to the proposals 3.4%, the WACC should be decreased to 3.4%, which means lower returns. So the CHF 1 billion in terms of investments also goes or is also linked to the lower returns? Or is there a level where BKW has to consider to have external partners in this business? So that on group level, you still come to the 8% of the ROCE.

Could you take this question?

Yes, of course. Maybe you remember, I mentioned it as a risk because we all know the political discussions that are going on that the outcome is rather open there. But you know me, I'm very much cash flow oriented. What I can say now is the following. There are no costs subsidies. The business segment of power grid has to finance and generate the money for the investments itself from its cash flow. And accordingly, when it comes to investments, we will act in line. It is clear that there is an interdependence here. But basically, we took a WACC that is a little bit lower. It is also decreasing below 4% in 2025. If it is to be decreased substantially, then of course, we would have to act.

Thank you so much, Martin. I would like to take a live stream question. Matthias Heim has asked where in Europe and also in Switzerland, do you plan battery storage projects and will BKW operate these batteries if they are above 500-megawatt? Maybe Robert Itschner, you can take this question.

Yes. We have 2 business cases in the business battery solution area, that's infra services, they build batteries for BKW but also for other customers. So we will have tenders, and we will participate and also offer our services. And the 500 megawatts that [ Mr. Fenke ] said is something that we build for us and also operate ourselves. The possible locations are still under work. We're still working on these. We have various locations. Most of them are located in Germany. However, we are also considering, of course, [ we're ] in Switzerland and where in Switzerland, we would like to go -- to commission large battery storage systems in Switzerland as well.

Another question in the room, first row.

[indiscernible] [ Cantonal ] bank. You have mentioned that you want to invest CHF 2.5 billion into Energy Solutions and how much is planned to be invested in Switzerland. You mentioned the Trift project, for example. No pump storage plant, I think I have heard reservoirs, but I don't think that you're planning any pump storage plant, if I'm not mistaken. And then Grimsel, the increase of the dam has not been mentioned. Is that not included? And thermal power plants were mentioned as well. What is that precisely? Could you elaborate on this? And another question. The reversion projects reverting back to municipalities. You have your own concessions. When is this expiring, when is it going back to the municipality, Isn't there a bit of a contradiction or a difficulty? Because they are owned mainly by the Canton of Bern. So where are any other cases where we could see a reversion and KBO, is that just one concession? And when does it expire? Because there are various power plants, various concessions that will expire. So I have a lot of questions, I'm sorry.

Okay. Let me go through these questions one by one. First of all, Trift. It is a flexible power plant. We can control when we use the water, energy and of course, Grimsel is also an important project that we would love to get started during this strategy period. Then when it comes to the reversion issues and the concessions that are expiring, 2045, one will be reverted. Here, we will have to discuss with the Canton of Bern over the coming years of how we want to proceed. We are rather optimistic here as you are, and it should not be a basic discussion here. In Switzerland, we also have many other power plants that -- where we will see reversions in the first half of the '30s, but also in the '40s, and in the '50s of this century. And even later on, we will have concessions that will expire in maybe 20 years time. Before these concessions expire, we will, of course, have to lead and have very important discussions and in-depth discussions with the respective Cantons. So there is a lot of motivation around also on behalf of the Cantonal side. So we want to do this, of course. And we think that this is -- will be a positive development. And your last question was about the thermal power plants. This is the transformation of the flexibility. One possibility here is that we will participate in gas production plants instead of coal so that we can offer more flexibility, but it is clear that only -- that will only happen if the gas or -- gas is a green energy. Otherwise, we will face the same discussions again in the future. Did I cover all your questions?

Yes, I actually have a new question linked to this topic. What do you plan here?

Well, I would not like to go into more detail here. We are a minority shareholder of this respective plant you mentioned. This limits us to take quick decision. So we have to find consensus with the main stakeholders, and we are discussing currently discussing various options. Of course, there are various options, but I think we need more time, and we will certainly communicate the answers once we have clarity.

Thank you so much, Robert. I would like to ask you to ask 3 questions, maybe 1 question here in this room. Thank you very much.

[ Alexa ] Davidson Kempner. If I can ask it in English. So on these PPA contracts, I'm just trying to understand why do you feel a need to sign those? Effectively your flexibilities based in the Switzerland and I understand there isn't much renewable growth in Switzerland. So you would be signing them in maybe Sweden and Germany. How do you structure them in terms of geographical -- geographically, you've got renewables there and your flexibilities here. And then also duration, you probably signed 10 to 20 years and you sell to your customer on probably a 2-, 3-year basis. Is there any duration and geographical risks in that?

[Foreign Language]

We have communicated here that in our core markets, we focus on these activities also in the area of PPAs because we do know the markets very well. We know the players in the market and how the market operates. We also know the environment of the producers, so this is a very good departure point, I think. Then the duration of the PPAs, we will have to see how the market develops in the future, especially on the customer side. Currently, we're in a range of 3 to 5 years in terms of duration. And we expect that this could be prolonged depending also on the electricity prices and how they develop. Now the takeoff contracts, as we have mentioned them, we will hedge them. Of course, just in the same way as we do this with other volumes as well. Of course, in the long term, probably not 20 years, but certainly a couple of years or a number of years.

Thank you very much. Then we have one last question here, and you can also ask many other question -- your questions after we conclude the official Capital Markets Day. We have one more question on the left-hand side.

Barbora Blaha from UBS. One question with regard to costs for nuclear waste disposal by 2030. Over the course of the past years, this was about CHF 70 million net-net for BKW. What about this going forward?

Thank you. If I understand you correctly, we've already had this discussion before you talk about the cash out basically, right? In the past, it was as follows. During the ration of the nuclear power plant, we made provisions, built-up provisions, so that we would be able to use these provisions once they were needed and that we were able to pay the expenses. So we made a fund. We established a fund for these provisions. So that was -- in terms of cash it was hedged or secured in order for us to put it in a position that we can pay that was done by the legislative body. So that was during the normal duration of the nuclear power plant. Now in the first phase, we were not able to offset all the costs with these funds. So that's why we made the provisions. And now there is a phase that has just been concluded where the cash out is actually higher than what we claimed from the fund. So this phase is now concluded with Fuel Freedom late in fall. That is now completed and terminated. There is still a little bit of hangover for this year. But as of the year 2025, the cash out that BKW will have can be reclaimed in full terms. So the BKW group when it comes to this group will no longer have to have any additional cash out it. So it is covered by the fund as of 2025. And maybe I answered your question in a little bit different terms, but I do hope that I answered your question.

Thank you, Martin. Let us conclude this Q&A at this point. We still have a few questions in the live stream, and we shall answer these questions subsequently to this Capital Markets Day. The guests here in this room, ladies and gentlemen, you still have the possibility of asking your questions personally later on. Let us conclude therefore, this Capital Markets Day here at the Circle. A lunch buffet is now available for all the guests right outside this event room. On behalf of BKW, I would like to thank you very much for your interest and your lively participation in this Capital Markets Day 2024. Have a great weekend. Thank you, and see you again. [Statements in English on this transcript were spoken by an interpreter present on the live call.]