Enel SpA (ENEL) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Good morning to all of you here with us in Milan and to the ones connected remotely. Before sharing the agenda, let me launch a short video. [Presentation]

Okay. Thank you. Here, we have the agenda for today. Our CEO, Francesco Starace, will set the stage, summing up the strategic actions of the group in the next 3 years. And then our CFO, Alberto de Paoli, will detail those actions, how they play in the numbers. The Q&A session will be at the end of the presentation, as usual. I will call the analysts here in the room and then the ones connected via teams. If you are not able to ask any questions, please send an e-mail to [email protected] and I will be your voice. Francesco, I leave the stage to you.

Thank you, Monica. And good morning, everyone. And let's see if we can put up the first of these charts. As always, we will have a few slides on the context, how this context affects NL and then our strategy within this context. So the context is so clear that I think we will spend a few minutes really here. Just underlining that this past 3 years, not 1, 3 have been characterized by an unprecedented set of actions of disruptions. The combined effect of 2 years of pandemic and the war currently raging at the borders of Europe have accelerated some trends that were already underway such as the energy transition and the platformization of all digital systems. They have also added a new different trend that have to do with the redesign and rebalance of the supply chains that emerged quite a big theme during these last 3 years. Overarching concerns about climate change have been reinforced by a growing number of extreme weather events and record droughts and floods around the world. Around the world, governments have been generally resorted to stimulus packages to sustain economies. And in Europe, in particular, due to the severe gas pricing volatility, fiscal and regulatory measures have been introduced and are being introduced with mixed results. All this calls for an acceleration in the implementation of energy policies and the evolution of market designs to enable a faster pace in the energy transition. The crisis have shown in a drastic way that some goals need to be achieved for a successful transition. There are basically 3: affordability, an energy supply that has to be affordable at affordable price, stable in the long time. Security, an energy supplies with limited exposure to geopolitical consideration and tensions. Sustainability, an energy supply that will have no impact on climate and the ecosystem. In short, what now is very clear in need is a low-risk, low-cost, abundant energy supply for the long-term development of society, and energy that, in fact, enables a progress that is sustainable. These 3 objectives in our mind can be reached through an accelerated decarbonization electrification of energy consumption. Energy Systems would become more predictable. Prices for customers would be less volatile and the real economy will definitely benefit from this. So the importance of clean electrification is clearly recognized by the packages that the Eurozone and the U.S. have let -- have decided to launch. In Europe, repower EU, the next-generation EU and the EU long-term budget create altogether one of the largest stimulus package ever approved. This is a package over a period of 7 years, around EUR 700 billion are allocated. They are allocated to create conditions for lowering gas demand via a rapid rollout of renewables, a progressive decarbonization of the industry and the support to modernize the electricity grids. In the U.S., the inflation Reduction Act has introduced incentives related to power. I mean, we're talking about electricity here, totaling $415 billion over a period of 10 years, they would support new clean tech manufacturing, renewable energy production, transportation and electrification infrastructures and also climate smart agriculture. Now this is more or less what happens around our systems. Now let's see how do we fit within this? So you probably will remember some of these 3 slides. They are vintage slides from '19, '20 and '21 Capital Market Days. So we took them off these 3 Capital Market Days. Because since the beginning of this decade, the strategy of Enel has centered around enabling clean electrification. The management team and the employees and the colleagues, we have worked hard to create an organization with operating systems and digital infrastructure that today can capture the significant opportunities associated with the acceleration of these electrification trends. And we saw very clearly that renewables would be the main driver for sustainable energy generation, and we have allocated investment in the past exactly to the same. We expected that decarbonization would go hand in hand with an increase in electricity consumption, driven by changing customer behavior, and we have set up an organization that is fit to deliver on this task. Our acceleration in developing renewables over the past 7 years have increased our independence and significantly reduced the emissions of the group. This allowed us to grant affordable prices to customers even at a time of extraordinary volatility in energy markets. In parallel, we have complemented our commercial offering to our residential and business customers as well as cities and municipalities with value-added services and infrastructure they need for their own electrification. The investments in grids, including new connections, digitalization and efficiency are contributing to create the electricity grids of tomorrow, secure, resilient and reliable. The strategic decision and the managerial actions that result that we had to put in place during this period are synthetized in this chart. These trends that since the pandemic of 2020 have stressed the systems, they have also tested our business model on multiple fronts. Electricity demand was very volatile, depressed at the time of COVID-19, jumping to a high level in less than 2 years with a significant impact on prices. Currency movements also were extremely severe climate event became more frequent with inevitable consequence on our own production. I'm talking about the drought, for example, of this year, and the opening up of an expected open position. Leveraging on past strategic decisions. The management was able to take decisive actions that more or less compensated for the exogenous instability. The investment in platforms and digitalization were critical to enable a business continuity. The growth of renewable development continued to protect margins. We managed to extract significant value from the stewardship business model, for example, open fiber that was created from scratch in 2015 and the integrated commercial offering supported the group margins and our customers. The economic strengths we had was underpinned by our financial solidity. Since 2015, we have been saying that our leverage would progressively move to ratios that were more in line with the sector without threatening the overall financial stability of the group. At the same time, they would also allow us to execute on our ambitious investment plan and maintain an attractive dividend policies. And since then, this has been the case. But we cannot ignore that we have a turbulence ongoing on gas prices and also an ongoing repo effect from European energy policies, including government interventions, combined with the current outlook of interest rates. In this regard, we believe it is prudent for the group to return to a more conservative view of some of the ratios in order to be able to keep growing while retaining ample room for maneuver to cope with potential ripple effect of the turbulence that we are all experiencing and execute in our strategic priorities to accelerate electricity production and consumption. In short, we will have to face in our opinion, at least a couple of years of ongoing turbulence and therefore, we need to have a different and more conservative approach to these ratios. So to make a very long story short, this chart gives you a super synthetic view of the plan of this next 3 years. We are concentrating our strengths where they matter most. We will reach a coverage of almost 100% on our fixed price sales with our own production and long-term PPAs, out of which around 90% will be coming from carbon resources. This will be possible, increasing the percentage of renewables on total generation to 65%. It's moving from 55% as of today deploying our state-of-the-art technology of network, we will reach 80% of digitalized customer penetration at the end of the plan. We will reposition our portfolio of businesses and assets with a EUR 20 billion front-loaded disposal plan that focuses on our strong integrated position on 6 only core countries. As a result of these things, we combine a 10%, 13% group net income compound annual growth rate with a conservative and prudent flow from operation to net debt ratio, fitting better uncertain scenarios while maintaining a minimum DPS of EUR 0.43 per share across the period of the next 3 years. From the next slide, I will detail all of the strategic actions that are needed in order to achieve these actions. So how we get there. The strategy we have is clear, we aim at establishing an integrated position across the value chain in core countries that will enable us to serve our customers best in their electrification journey. Toward this aim, we will implement 4 strategic actions over the next 3 years. And the 4 strategic actions are the ones you see in this chart. Number one, we will cover an increasing amount of fixed sales customer contracts with our renewable energy production, sustaining margins and lowering our risk return profile. We will continue to decarbonize our electricity production, boosting its competitiveness and sustainability as well our security of supply. We will continue to decarbonize our electricity -- I'm sorry, that we said. We will keep reinforcing, growing and digitizing our networks to future-proof them for the growing requirements of quality and quantity in electricity demand. And of course, last but not least, we will streamline our portfolio of businesses and geographies. Now let's kick in -- in the next slide, I will show you the equilibrium between electricity sales to customer and generation supply. We plan to sell by 2025, around 80% of electricity volumes under fixed price contracts, an increase vis-a-vis of 2022 of about 15 terawatt hours, roughly 7%. We aim at reaching 100% of fixed price sales covered with our generation long-term PPAs, out of which 90% from decarbonized energy sources considerably derisking and stabilizing the evolution of our margins. In addition, this will allow us to implement a long-term stable and visible commercial strategy is reducing short-term risk associated with exogenous volatility, fostering the energy switch from fossil energy to clean energy by our customers. Let's see how we will enhance this energy switch in the next years. Our commercial strategy is supported by the increase in renewable shares will grant, as I said, affordable and predictable energy cost. Leveraging our long-term commodity contract relationship with existing customers, we plan to accelerate the rollout of value-added services, next-generation infrastructure, in particular, e-mobility charging points, flexibility services as behind the meter storage and demand response that are picking up speed very, very quickly. And we will be able to do this, thanks to our continued effort on renewable investment. We plan to add around 21,000 megawatts to our installed capacity in the next 3 years. This is on track to reach our decarbonization targets aligned with the agreements in tariffs. The strategic priority is to increase capacity in our core countries to serve the commercial strategy, as I said. We developed this capacity supported by a growing market-leading pipeline, now exceeding 400,000 megawatts. This pipeline allows us to protect returns associated with the projects and will create optionality for future value creation. We plan to accelerate the rollout of is important in providing short-term storage and flexibility services is becoming more and more clear to operators that span the full value chain. Last but not least, we continue to execute on the stewardship model targeting potential opportunities in noncore countries for short cycle value creation together with future growth upon optionality. In this front, we will develop 2,000 megawatts. This development of renewables allows us to confirm the 0 emission target we published last year. At the 2020 Capital Market Day, remember, we announced that we would bring forward our net 0 target by 10 years. So from 2050 to 2040, aiming at 0, not really net 0 emissions across our scopes. Now this is indeed the most tangible sign that we can provide of the seriousness and the ambition of our climate-related commitment. Being committed to fighting climate change cannot, however, be limited in setting an ambitious plan towards carbon neutrality. It means also tackling and being transparent around other issues such as consistency in the investment strategy with the targets. So how much money do we really commit to this end? Climate-related policy advocacy just incision and the governance of climate-related issues, TCFD-aligned disclosure. ENEL has been doing this all these years. The clarity of our emission reduction targets has recently been recognized by Climate Action 100+ has [indiscernible] been recognized as the first and only company to fully align these closures with the net zero company benchmark. I'm saying this because there is a lot of greenwashing discussions nowadays, and I think it's important that we clearly detach ourselves from this debate. the group will contribute to the development of a critical part of the renewable industry value chain together with its partners, recent events. I'm referring now to the gas crisis coming from Russia. These events have taught us the importance of energy independence. And in this context, analyst is taking action to initially support the reshaping of the solar supply chain in key areas of the world. We are doing this mainly through a co-investment -- co-investing in our 3Sun factory located in Sicily that is today producing 200 megawatts a year of solar panels. -- ramping it up to 3,000 a year per -- or PV panels. These are the facial panel production based on heterojunction technology, which is today one of the highest conversion efficiencies in the market. This investment benefits from innovation funds. It will see a limited equity contribution from the group. It will be a deconsolidated investment. It will hedge our exposure to Asian supply chain constraints. It will create local employment opportunities about 1,000 jobs. A similar project is under evaluation in the U.S. You might have read that on some newspapers. The scheme applied is the same, co-investment with partners exactly the same technology developed exactly the same factory design. So it's a copy paste exercise to cover a different market. Limited equity commitment huge hedge into the -- what we think is one of the biggest concern on the supply chain disruption over the last 3 years. From Slide 20, we move to networks. The strategy in grids is to concentrate in 5 countries. These countries see us having an integrated position where our unique expertise in digital evolution is best deployed, mainly in large metropolitan areas. That's where digital transformation first has impact Italy and Spain in Europe, the cities of Sao Paulo and Rio, Brazil, Santiago and Chile, Bogota and Colombia. We will deploy investment in the countries where we see a regulatory framework and government policies supportive to the acceleration of the energy transition. And you see in this chart that these blue dots where we have networks really located in the areas of the world where most important climate ambition related regulation has been enforced. So it's a match between 2 different views of the world that makes sense for us. If we move to Chart 21, you see that networks are the key enablers of key -- of clean electrification. And we see what is happening. The trends over the last 3 years are super clear because the number of new connections to Enel grids requested by customers and producers have increased 5x between 2020 to 2022. And we think that will continue to accelerate. This request relates to connecting an increasing amount of renewable distributed capacity, including decentralized energy management systems, virtual power plants, battery connectivity and so forth. Grids, therefore, must create hosting capacity capable to integrate new generation sources. Due to the capital intensity and long-term nature of this investment, regulators and policymakers must become facilitators of this massive transformation to zero as their role is to orient priorities and investments. They need indeed to create a stable and attractive regulatory environment, providing the right framework and incentive mechanisms to unlock the massive investment needed. This is a challenge that we have to face on. We will now look into how much CapEx is intensifying. In the next 3 years, total investment in grids will grow by more than 20% compared to the last 3 years at the homogeneous perimeter. The increase in CapEx and the concentration on a smaller number of countries allows a remarkable 30% growth in the intensity of investment for clients on average. The drivers of this growth are 3. The first is the need to improve quality resiliency to better manage the increase in loan as well as to cope with extraordinary events related to climate, the ongoing digitalization of the assets to achieve higher efficiency reduced network interruptions, the increase in connection, a commodity in the pickup and distributed energy resources and expanding megacity networks. I underline that if you look closely to this chart, you will see also a reduction in the OpEx per customer costs on the right-hand side at the bottom right-hand side, it end there of this chart, where, yes, there is more CapEx for customers, but it results in a lower OpEx for customers at the end through the digital transformation of these networks. Now this focus that we have defined before, requires agility and the constant revisiting of businesses and geographical presence to ensure that the strategy can be implemented effectively and capital deployed where the risk return profile is most favorable. In order to do this, we are going to significantly streamline our structure, resulting in exit from some businesses in some geographies, which are no longer in line with the strategic group. So we will continue to leverage our stewardship model in Tier 2 countries where we don't have an integrated or where we can leverage on partners to accelerate local development. In addition, in line with our aim to exit carbon-intensive activities, we plan to take advantage on the current exceptional market environment to crystalize the value of our gas assets. This program is an integral part of our plan to reshape the company and focuses on the most promising countries looking at the future regulation of our business. The asset sales deriving from this revisitation between '22 and '24 are expected to generate around EUR 21 billion of proceeds, and we plan for most of them to materialize in the year 2023. So this year that we are entering into. The visibility we have today allows us to commit to a short time delivery. Our objective is to maximize shareholder value while reshaping and simplifying the corporate structure. In the presentation, Alberto, you will see a detail indication in what we got to do exactly, which country, which businesses we're going to exit. At the end of this program, we will be a simpler entity. This is the picture. If we complete this plan in 2025, we will be a more agile company, and it take a position in 6 core countries. The resulting geographical footprint is a function of where our know-how in renewables and integrated margin is best coupled with our customer base and where our technology know-how is best fitting for future electrification development. So where our strengths play best. We will manage a total of 75,000 renewable energy capacity. We will serve 50 million customers. We will manage EUR 41 billion RAB-based assets on networks. Our financials will mirror our strategic choices. 80% of our EBITDA will come from major Western countries. Minorities leakage will shrink, credit metrics will improve significantly. We will still be present in Latin America in 3 countries: Brazil, Colombia and Chile. Now as far as investments are concerned, it's very simple, and this is the picture of the next 3 years. According to this plan that we are presenting to you, we plan to invest EUR 37 billion in the next 3 years, 60% allocated to support the integrated commercial strategy, 40% on networks. This investment plan will result in this shift of key parameters of this company. Renewable capacity will amount to 70,000 megawatts. This is about 80% of the group total generation with an emission-free production reaching 83%. Around 90% of fixed price sales will be covered by non-carbon sources. The progression in the digitalization networks will increase the share of digitized grid customers to around 80%. SAIDI, which is an indication of quality of network services, will go down from 230 to 150 minutes as a result of the group concentrated effort in quality improvement. These are the operational key parameters. Now if you look at what value we create for major shareholders -- major stakeholders. And this is a major -- a set of metrics union. You can choose many of them. But the focus on stakeholder capitalism has to do with the fact that this observation that years of short-term and purely financial result focus might become risk in going forward, in particular in the evolution of the systems that we are observing. We have evidence that a more sustainable approach is resulting in a more robust positioning vis-a-vis the opportunities and the challenges of the transition that is accelerating right now. Therefore, we measure value creation not only from the perspective of financial parameters. In fact, the company's growth and increase of its return to invested capital is beneficial to all the stakeholders. Our commercial strategy will allow our customers, thanks to energy consumption electrification to progressively reduce their energy spending while benefiting from an increased quality of service. Thanks to the decarbonization of our generation, the greenhouse gas emission intensity is set to decrease by 44%. Our investment will spur a cumulative increase in gross domestic product of more than EUR 70 billion for the benefit of the communities. We pay particular attention to our employees through upskilling and reskilling programs in consideration of the commitment of the group to a high transition. In stewardship business, we will drive partner investment for more than EUR 15 billion in clean energy. And because this is a very crowded chart, and we could not put up more than this number of parameters, I would add here that we also commit to continue our striving to get to net zero on the safety dimension. We want to operate in a zero accident environment. As many of our operating units already are, but we want to have the group working at zero accident, and we are working towards that goal in this plant too. I will now leave the floor to Alberto de Paoli for the financials of the plan. Alberto, the floor is yours.

Thank you, Francesco. Good morning to you all. Please don't ask by [indiscernible] because today is -- it's the worst stage on these questions. Okay. So now we go on details on our strategy, starting from our -- some details on our investment plan. As said, we will invest in 2 main items: one to support our integrated commercial strategy, and prepare our agreed to be the enablers of the energy transition. We will invest, as you see, EUR 37 billion over the plan. There is an amount in line with what we spent in the last 3 years, but clearly concentrated in fewer countries and businesses. Almost 100% of our CapEx will be allocated in core countries. So we have no investments out of the 6 core countries out of stewardship model and some equity injections that we will touch after. About 85% of the investments will be devoted to Italy, Spain and U.S. More than 90% of our investments program is aligned with the UN SDGs, directly SDG7, SDG 9 and SDG 11 and targeting the SDG 13 of climate actions. And in addition, 85% is aligned to the new taxonomy criteria. And -- so this is the -- up for the rules that are today are -- have been signed and defined by the Europe Commission. Okay. Now moving to the first EUR 22 billion, so EUR 22 billion in integrated commercial business and EUR 15 million in networks. Talking about the EUR 22 billion invested in the integrated commercial business. This investment will be allocated roughly 80%, 85% on generation and 16% in to -- directly to customers. The EBITDA generated will increase at a compound annual growth rate of 15% starting from this year, then I will give you some details on this growth. And so we will tap the very, the very increase that is related to the integrated commercial business. Now I'm giving you some details on the other items. The regulated business is going down in the plan by EUR 800 million, as we expect an acceleration of the market liberalization in the geographies of our presence. Then we foresee a decline in the gas prices that will result in a reduction of roughly EUR 400 million in our gas business. And we expect trading activities to decrease by about EUR 300 million due to the assumed reduced volatility in the market along the plan. Moving towards a normalized level, taking account on a normal level, we make roughly EUR 400 million, EUR 500 million per year in the trading activities in wholesale. And then we have other non-core -- other countries, non-core, it will increase roughly EUR 100 million, EUR 100 million. This is for the other items. So now we'll take a look on the very, the very part of the increase in the integrated commercial strategy. You will see there that -- as you know, this number, the starting point is depressed. It's not a normal level of marginality that we have -- we had in the last year because of the issues that we have already discussed. Italy was severely impacted by these exogenous factors. And for this year, it resulted in EBITDA lowered EUR 2.2 billion versus the average that we had in the past years. So after taking into account this business for monitization, grow across the plan is triggered by the development of our commercial strategy, the progressive substitution of our thermal production with renewables and the full coverage of our fixed power sales with our production and long-term PPAs. Francesco describe in detail the commercial strategy while leading to a 20% decline in prices offset to our client will contribute with an overall EUR 1.9 billion, thanks to volume increase, as said, and services sold. From a servising perspective, we see 2 elements of performance. The substitution on 30 terawatt hour fossil fuel export production with renewables that will drive more than EUR 1 billion increase in EBITDA and 100% fixed price sales covered by our own generation and long-term PPAs that will add another EUR 600 million. So renewables are therefore a key contributor of the EBITDA performance on our development plan, and we can see it in this chart, as are assume. So in the period, we will invest around EUR 17 billion to continue to grow our renewable asset base. 60% will deployed in Europe. Looking at the capacity, we expect to reach, as said, around 75 gigawatts by 2025, out of which more than 65 gigawatts in core countries. Our new capacity will be a key contributor to the additional 36 terawatt hours of rest production at the end of the plan. Now this is a snapshot of the underlying dynamics for each country. As you see, also 90% of our CapEx will be allocated in 3 main countries where the returns are the highest at around 300 basis point over WACC. These countries are clearly the most promising for our integrated commercial business with supportive regulatory environments. In Italy, we are accelerating our rest development to serve our customers' demand and to substitute our legacy thermal asset with fixed price technology unaffected by commodity volatility. In Spain, we invest in renewables to align the growth in our sales to customers covering any potential open position. In the U.S., we cater to increase clients' demand for PPAs and flexibility offering. And in LatAm, we are anticipating liberalization trends to accelerate, and we aim at covering free customer demand with our rest reduction while keeping promising 200 basis points over WACC return. Okay. Now a short look on networks. You see here that we are going to invest EUR 15 billion in our networks [indiscernible] skewed towards Europe in light of the rebalancing of the geographical position footprint and the need to accelerate the energy transition. EBITDA is expected to reach EUR 7.3 billion. This is on the back of what you see in the chart. So a RAB increase of EUR 200 million, EUR 100 million impact on WACC reviews, whereby the increase in Italy is slightly offset by minor negative adjustment in Latin America efficiencies for around EUR 100 million and then FX impact will impact negatively for roughly EUR 100 million. Our assumptions are not reflecting any upside from the change of current regulatory system to Totex that would increase return on investment associated with quality resiliency and notification of the grid. Worth to remind that the EBITDA we show here in 2022 is net of perimeter and stewardship contribution in 2022 for around EUR 1.4 billion. More than 80% of investments will flow into Europe, where we see stable regulatory frameworks and high support from new packages. Because of the long-term nature of our investments and the capital intensity of the Grid business, we believe regulatory frameworks need to be accommodative to encourage sustainable grid modernization. Revenue Europe, as you see, will grow by around EUR 2 billion, mainly in Italy as a reflection of the high visibility over the time period, while Chile and Colombia will start a new cycle in 2024. Let's now take a look on the status for each country. As you can see from our capital allocation, regulatory frameworks that will grant support to digitization, protection against macro volatility and attractive returns will be allocated with the highest intensity of investments per customer. This is the case in Europe, where regulators and governments understand how important smart infrastructure are to support clean transition. But as CapEx remuneration matters, the different CapEx intensity in Europe depends on a different capital protection, mainly against inflationary pressure resulting into a lower spread over WACC. In LatAm, schemes are not contemplating a specific return associated with digitization of grids. And this is somehow capping investments potential, even though base returns are, on average, more attractive than in Europe. Hence, we are ready materially to increase our spending in grids once regulatory frameworks in Spain and LatAm will offer appropriate conditions. To complete the picture on the industrial development of our strategy, let me now move to the stewardship business model. In only one slide we are putting all together. So first of all, our joint ventures will invest along the plan, what, EUR 15 billion of investments, EUR 2.4 billion directly invested by Enel. Out of this EUR 2.4 billion, EUR 1.1 billion will be as an equity contribution into the joint ventures and EUR 1.3 billion in direct investment in assets to be eventually disposed to joint venture. Resources will be instrumental in adding further renewable production, new infrastructure and services to fuel the electrification path of our customers. You see in the middle of the chart, the operational results that we are seeking for our joint ventures. Over the next 3 years, model will generate approximately EUR 1.5 billion of EBITDA, splitting roughly EUR 900 million of capital gains, EUR 660 million of EBITDA. And we'll keep on accruing value. In 2025, our stewardship business will have the following characteristics. Total net equity contributed since 2025 will be around EUR 1.2 billion. That is because we are going to get some dividends from our joint ventures. And as take equity value to reach around EUR 2.5 billion at the same time. So we are seeking for an IRR of this equity invested at around 20%. Okay. Now we can move on the strategic repositioning with some detail on what Francesco has mentioned before. First of all, this is our repositioning plan in detail. Over the course of 2022, our simplification strategy has accelerated significantly. We completed the exit from Russia. We disposed assets that were not aligned with our strategy, such as the transmission asset in Chile, the gas pipeline in Brazil, and those that were no longer in line with the required risk-return profile of our portfolio such as Goias grid. We have kicked off our gas portfolio value crystallization starting from Chile. And finally, the Gridspertise deal showed the full value creation potential of our stewardship model. 2023 will be the cornerstone of the streamlining strategy of the group. Our geographical footprint will change radically. Activities in Europe will center around Italy and Spain as we will exit Romania. In LatAm, we will exit from Peru and Argentina. Some geographies of present such as Greece and Australia will fall into a stewardship model. Initiated exit from business that we see no more strategic of our future evolution, gas assets in Spain, disposal of Sierra to take further steps to concentrate our focus on big cities such as Rio and Sao Paulo and some minor renewable assets not aligned to our integrated commercial business. We are also planning to increase the visibility of our growing U.S. asset base and of analyst, which we don't see as being properly reflected in patent market valuation -- this strategic repositioning will deliver an optimized structure, significantly impacting our financials and strengthening our balance sheet as we can see in the next chart Overall, the M&A program will generate about -- can you hear me? Okay. So EUR 21 billion post-tax impact post tax at net debt level, starting from around EUR 5.6 billion for this year and peaking 2023 when it will be in excess of EUR 12 billion. The program will be impacting our EBITDA at regime for around EUR 2.8 billion and around EUR 900 million at net income level, growth of the savings associated with lower interest debt that we are accounting for EUR 400 million, EUR 500 million of less financial cost. So the net impact is around EUR 400 million, EUR 500 million. This net dilution impact would be around $0.05 per share, an impact already fully reflected in our plan in the number you will see. We are confident in the successful execution of our simplification plan. We factor into our assumption that disposal we reached an average EBITDA multiple of 8x, a multiple that we consider as conservative in light of current market valuation of comparable and the appetite we see for similar assets from both strategic and financial investors. Let's now have a look on how our strategic choices will be reflected in our capital structure, and I'm now on the financial management side. First of all, this is the outlook of our financial targets for the plan. This repositioning will have an immediate visible impact on net debt that will be considerably reduced in 2023. As a light hereon Slide 15, the cash impact of the asset value crystallization program will be front-loaded with the debt going down EUR 51 billion, EUR 52 billion already next year. As a result, net debt to EBITDA will decrease by 1/5 to 2.4, 2.5x in 2023, remaining flat thereafter. In 12 months, the group leverage ratio will, therefore, go back to its 2020 level. And similarly, the FFO to net debt ratio is set to increase by 11 points, about 3 points higher than 2020. Having seen how debt is going to be reduced, let's take a look at our financial strategy. Our debt maturities are well spread throughout the plan period. The long-term debt expiring in the next 3 years brings a blended cost of 4%. And Out of the total EUR 24 billion that will mature over the next 3 years, about EUR 10 billion will be repaid by our disposal program, since reducing the risk of funding in distressed credit markets. And the remaining EUR 14 billion will be almost entirely covered by our centralized finance, securing a cost of debt in line with the current bearing cost. You can see the outcome for our financial strategy on slide than the next slide. Despite the recent rising progression in interest rates, the cost of our debt will show an overall stability. This thanks to all the managerial actions that have been put in place since 2017 when the cost of our gross debt stood at 4.7% and reference interest rates were 0.5%. While in this plan, with interest rates at 1.8%, our cost of debt is 3.4%, 3.5%. One of these actions was completed last year. When we run EUR 8 billion equivalent liability management program, issuing debt at an average maturity of 10 years, bearing a cost of 0.6%. This average life of our debt will be between 6 and 7 years. The evolution of our cost of debt is also backed by the structure, which we built over time, and you can see on the next slide. Centralization of funding allows lower costs while optimizing efficiency and control. More than 80% of our financing will be funded centrally. Around 3/4 of our debt is or has been swapped into fixed debt. In terms of currencies, almost 85% of that is or has been swapped into euros, leaving residual debt in local currencies being naturally hedged by local generated cash flows. As you can see here, the petition of gross debt by currency is broadly reflective of our composition of the EBITDA. And finally, sustainable strategy, sustainable finance sources now total EUR 48 million. This includes sustainability-linked, green bonds, sustainability-linked loans and credit facilities as well as other forms of subsidized financing. As a consequence of the accelerated refinancing activities carried out by the group in the last 2 years, sustainable financial sources is now 60% of our total debt. And this is a trend that is made possible by our capital allocation with aim of accelerating our own decarbonization over the plan, we foresee to reach 70% of sustainable finance in total in 2025. Now to chart on how this plan is derisked. You can see here 3 items that are going to derisk our plan. First, that business is the commodity exposure that you see on the left side will shrink as evolution and contribution of renewables. So our fixed price sales increased sensibly. We see the different mix composition. Thanks to the change in sourcing mix, 2025 EBITDA will be more resilient to commodities fluctuations. In fact, applying the 2025 generation mix to 2022, the sourcing cost would have been 40% lower and 100 basis points less volatile on the back of decreasing exposure to gas price. The volatility exposure to gas price is going to set to be zero when this 90% will become 100%. In terms of currencies, our exposure to LatAm FX will go down by almost 10 basis percentage points, limiting the negative impact of local currencies devaluation. The share of our contracted and regulated EBITDA in 2025 will be around 80%. In the following slide, we take a look at our financial risk. We -- liquidity for EUR 25 billion. This has been stable even at the time of margin costs increasing requirements position -- positioning optimally to face further exogenous volatility. Total liquidity covers 1.8x long-term debt maturities and minimizing refinancing risk because we are going not to refinance roughly EUR 10 billion of debt. And furthermore, thanks to the managerial action that I described earlier, in the next three years, we will have needs which more than halved compared to the past three years, resulting in a minimum exposure to raise cycle. And I conclude my speech with the target of the new plan. The growth in EBITDA will result in a 2025 target ranging between EUR 22.2 billion and EUR 22.8 billion. This will translate into enabling compound annual growth rate in the period between 10% and 13%. As always, we are rolling forward our policy, adding one year of visibility. We consider the EUR 0.43 DPS that we'll pay in 2024 and 2025 as a sustainable minimum, but not the maximum level. Let me now hand over to Francesco for the closing remarks.

Thank you, Alberto. As I said, we anticipate turbulence to remain in the team in the next couple of years at least. To that end, we are going to focus on combining the business models, integrated margin across the value chain, the technology know-how, digital network, digital evolution platforms. So these two strength strong points we have with the areas of the world where capabilities and know-how are more likely to be appreciated and create value. This drives, if you want, in a concept, the repositioning logically from a business standpoint and geographic standpoint that we set out. This leaner structure and the most robust set of ratios that we have seen will be more resilient and be able to withstand basically better or even profit from future possible turbulence as sustainable set of tools that we have set up will be ready to create value as the electrification trend will keep accelerating while economies of the world will decarbonize, seeking value on the long term and not on the short term. As a group, we strive in turbulence. We have a very skilled and very motivated group of colleagues. They can turn challenges into opportunities as they have done over these three years, thanks to their dedication and passion. We know that the combined effect of these strategic actions, the ones that we set out in this plan, will enable all of these colleagues to apply their capabilities at best for the benefits of all our stakeholders. Thanks for the attention, and we are now open to questions.

Okay. Thank you so much. Thank you, Francesco. Thank you, Alberto. So let's just -- I would just want to share a bit of rules with you. Apologies, I'm short-sighted, so you look very far from me today. So I'll start from the first line and then I go backwards. We'll take the questions from the room first, and then I'll open to the question from the Teams. [Operator Instructions] And then I will read the questions that came from the e-mail. We'll start, Alberto, Alberto Gandolfi here in first line.

For the plan, I have three questions and one unsolicited observation, if you don't mind. I'll start with the questions. The first one is, could you elaborate some of the assumptions in your plan? I think in the appendix you're using quite a bunch of forecast for Italian power prices in Spanish, 1 70 to 25 to 50. Can you maybe tell us what achieved price? Do you assume what type of taxes and price caps you're implementing? And regarding the EUR 1.2 billion cumulative contribution from stewardship, can you tell us maybe what, on a yearly basis, that looks like and any capital gains that you have included from the disposal plan of the portfolio? The second question is, I think it's great to have a streamlined business model with fewer countries, fewer activities. I was just slightly puzzled by the role of the United States. At the start of the presentation, you talked about the Inflation Reduction Act, and you talked about crystallizing value in 2024. What's the logic there? Do you think the IRA would not be sustainable? Or is this a necessary evil? And then maybe we'll see, with a strong balance sheet, we'll figure out the role of the U.S. down the line? Last question is, I noticed, maybe I'm wrong but like -- I think you're targeting EUR 4 billion EBITDA for Italian retail in 2025. So just trying to figure out if you can untangle, unfold the assumptions. Is it that you are assuming modest profitability in renewables and you think the integrated margin is to be ascribed to retail? Or what am I missing? What are the drivers to get from where we are to the EUR 4 billion, considering the EUR 2.2 billion headwind you highlighted for 2022? Observation. And if you don't mind having a counter-observation, I'll be very delighted. Your debt is falling, mostly front-loaded by more than EUR 20 billion, mostly front-loaded. Your earnings are growing. You have less emerging markets. And basically, your multiple has compressed by more than 40% since January 2021. So is this enough, do you think, for the multiple expansion? And can you elaborate on maybe returns on a like-for-like basis? Because if I have less invested capital and more earnings, in theory, you have much higher returns embedded in the plan. And I was trying to figure out where is it coming from.

Okay. Let me answer the question number 2. And then, Alberto, maybe can talk to 1 and 3. On the U.S., why is it that we want to crystallize value in 2024 in the light of what is happening on the IRA and all this fantastic plan? Do we have a doubt on the IRA? No, we think IRA will survive whatever Republican or Democrat administration. It's largely a bipartisan affair. So it might be amended back and forth, but I think it will get through, maybe not the 10 years, but definitely for a 5 to 6 years' time horizon, you can say it's largely going to be there. So there is not, let's say, a negative or pessimistic view of the IRA behind this. Definitely, we think that we need to have an event to crystallize value in the U.S. Not because there is really a CapEx or a debt-related concern, but rather because we think the market will need to see something to really appreciate the value we have created in the U.S. This is a strange beast we are assembling there. It's probably the most innovative large animal in the U.S. market. So it's not a regulated -- classic regulated asset. It's a combination of technologies, of renewables. And eventually, we are going to assemble a large business customer base. So it's kind of a new animal. It's difficult for the market probably to understand the value of that. So I think it's more in that sense that we look at that. And in fact, we put it in 2024 because we think that it might also get through an IPO if the climate of the IPOs would change, hopefully, in this 12 months. But it's a question mark, okay? So it might be an IPO. It might be a partnership with the fund. But that's the reason is basically that, to crystallize value. On your observation, this is an observation we also made ourselves to each other. I mean this is a totally understandable question. The hard truth is that, yes, I think there is more -- there is some conservatism in this plan. I think we were open about it. We think we needed to face uncharted territory. We don't have clarity of what is 2023 going to look like. Will there be still war? Will there be no more gas at all from Russia or a little bit more? Will prices keep swinging as they did during 2022? Will governments have to put again other strange things on the table? So we took a very conservative view of those things in the numbers. We might be this time exaggerating, but we don't know. I mean the fact is no one really does. So in a way, I think we might end up in '23 in a much better shape in terms probably not so much of debt because I think we will basically deliver on this plan. You know that we do that typically on the selling. I think we might have better results on the compounded results of last -- of next year, given the outlook that we start with this year. But I think that goes to a number -- to question number 3 maybe more clearly.

So first, I'm taking question number one. First of all, in annexes, you have our price assumption for Italy and [ Espania ] and also for commodities, gas and other. Clearly, the assumption are so that we are going to see -- we saw the peak in 2022 for prices and others, and we are assuming that a slowing go down on electricity prices and gas prices, clearly is a plan that will set the average price for the plan by far higher than what we can assume before. This is for prices in gas, clearly, so the gas assumptions we are going to get and take an average of EUR 110 per megawatt hour on TTF for the middle part of the plan, going down to around EUR 60, EUR 70 in the end of plan in 2025. Clearly is setting a target and a level of TTF that is not so sure in the way we saw before. And so putting some differences in our gas business in Italy and Spain in all the countries in which we had. So that we relied on huge LNG contracts from U.S. that with prices in the previous year were not in the money now, so they are in. On the other side, for regulatory assumption, it's an uncharted zone. I would say two things. Now this plan is assuming all the impacts related to known measures already adopted. So everything that is now, the windfall taxes pain is that -- so what is going to be approved and all the clawbacks that are in place is in the plan, but the plan foresees also part of unknown impact that is over -- so the loan decrease. So there are enough to think other assumptions to cover further impacts. As you know, if -- so the new regulatory of Europe will be aligned to the European framework, so it is something that is enough what we see, but it's possible that something would go different. But we've got in the plan some other part of regulatory impact not already approved of this cost. When it comes to stewardship business model, well, so as I said, the whole impact is roughly -- so capital gains is roughly EUR 900 million in the three years. Clearly, you will see that, say, 60% of this will be in the first year because we are going to create and define all the set of stewardship in the next year, completing the picture. And then so you have others -- the other part of the capital gain split in the next two years. EBITDA of Italy. Well, Italy is, as I said before, so we need to have -- to look at Italy, so starting from 2022, as sort of strange part of our business because the backlog we got this year is huge. So having rebased the results of Italy, I'm talking about the retail, the overall Italy, has a normal EBITDA that is ranging between EUR 6 billion and EUR 7 billion. This is what the historical results we had in Italy. So the increase is not mainly related to grids because the grids are growing roughly EUR 300 million, EUR 400 million. So the very increase is in integrated margin. Where the increase is based on the fact that we are increasing a lot our commercial strategy in terms of volumes because we are increasing our volumes. On the other side, we have, versus the previous years, a bad result of gas, from what I said before. And on the other side, we have and we keep on reducing prices in the next years, but surprises will stay at a level that is a little bit higher than the previous plan. On the sourcing strategy, as I said, we were going to substitute versus 2022 the huge amount of thermal generation with it -- with renewable generation that will be based on, say, normal hydraulicity, when I say normally, it's not in line with historical trend that we are getting and putting a discount because of climate change on the overall action of hydro, new plants, new renewable plants. In the strategy, we are just initiating to buy some long-term PPAs from renewable plants that we used to be developed in Italy to fulfill our needs for our commercial needs. These are the main assumptions based on this growth, but the very part of the growth will be based on the big increase in volumes we are experiencing this year keeping for the next years and a level of price that is higher than what we assumed in the past. When it comes to returns, I would say that now only 1 point of returns because I think it's useful to give you this view clearly. We are accustomed to say what is the returns of renewables and so that with the terms of grids and others. When it comes to -- the way in which we look at the returns of investments in an integrated commercial strategy, clearly, we look at this return as the way in which an investment in renewables can induce a different return of the integrated position. And because we don't want to be long customers every increase in renewables will induce an increase in our commercial strategy. That's why we get the entire level of increase of margins. Taking this increase for the investments that is made by renewables, we are getting the spread that we said before. That's why spread that we are expressing now is higher than their custom way to look at them at [ 100 ] basis points, 150, because the entire value chain is induced by the investment we do. That's the way in which we look at these things.

Okay. Next, Antonella Bianchessi, first line.

Antonella Bianchessi from Citi. I have three questions. The first one is on your macro scenario assumption. Today, everything is plausible, but obviously, your assumption is a little bit more, let's say, bullish or bearish, it depends on the point of view, compared to peers. So what if gas and power prices will come down relative to your assumption? Not really the implication on the earnings, but the implication on your strategy. Would you cut the dividend? Would you do more disposal? Would you -- what is going to be the plan B in case power prices are not there? The second question is on the debt. If we look at the target for the debt in 2025, we are looking -- I understood something like EUR 55 billion -- between EUR 50 million and EUR 55 billion, which is actually only EUR 10 billion below the target you had for '24 in the previous plan, but you are obviously disposing EUR 21 billion of assets. So I wonder if you can reconcile the missing, let's say, EUR 10 billion, EUR 15 billion between one plan and the other. And third, this plan is definitely very, very busy for 2023. 2023 is going to be a huge year for the management. Your mandate is coming to an end. Does this mean that you are available for next term, considering the focus on 2023 delivery?

Okay, Antonella, let me answer the third question and then -- you can take the other two. All right. I made no mystery that, of course, I like this work. I enjoy it. I think it's a great job. And obviously, it is not my choice. It's the shareholders that need to choose. And yes, the plan is a busy one, but I think the group of people we have in Enel can deliver. This is not a plan I do myself, obviously. This is something the company does. And I think that it is going to be able to execute on this plan regardless. So the question is, do you want to do this? Yes. What assurances do I have that I will do it? None, as always. You have to depend on what shareholders decide, but the company can do it anyway.

What if gas prices go down and prices? Let me say that way. So first of all, this plan is already 60%, 70% already hedged. So if prices go down on gas, nothing, so very limited impact will happen. Remember that we have put in clawbacks on everything. So if gas prices go down, clawback will be lower, so this is another way to hedge results. As you can see, so we are initiating the valuation of our gas assets. And so reducing the impact of reducing gas prices. That's for gas. For prices out of the clawback, as I already said, because you remember this until now June next year, we are capped on the price that we do on our customer base, not on the wholesale side. Because in Italy and Spain, the cap is on the price offered to customers. Then after June, we don't know without the [indiscernible] are also ending there. But the way in which we work in our commercial strategy is that the market prices are not directly affecting our commercial position. The only way to affect our commercial position is the churn rate. And the churn rate we are experiencing today is 5% instead of the normal 14%, 15% we are having in the normal years. What we are assuming in the plan now is that, starting from 2023, churn rate will stay and will be back to normal. So that's the way in which we think we will work that way. If prices will stay high, customers will stay with us because the prices we are offering on fixed customers are lower than the market price. That's why our churn rate is very, very low because no one is exiting because prices offered in the market are higher than the prices we are giving to our customer base. This is the way in which we work on our commercial strategy, working on churn, not on prices or market prices. That's why I think that -- and we have plenty of measures to front a peak on churn rates because we work -- we can work on prices. So if prices will go down, we will manage it because we have a lot of things that we can manage to bring results the way, so we are saying, in the range that we are giving in these targets. When it comes to our debt, nothing is different versus the previous three years because we have the same level of investments that they are concentrated in, a few number of countries. Second is our dividend policy is the same. And we have assumption that the FFO generation will come back to normal starting from, I say not next year because next year it will be more than normal because we are going to cash in the whole amount of regulatory measures not already cashing in 2022. But after this period, we are taking a normal conversion that is roughly 65%. Out of this, and clearly, so we are going to increase a little bit the stock of debt from 2023 onwards because the level of covering our dividend payment with the level of investments that we are taking now, there is roughly EUR 13 billion per year, will be reached in 2026. Around that date, we will reach the free cash flow parity, and the debt will be -- will stay stable at that level. So stability with this level of investment in this growth rate will be in the range of 57%, 58%.

My question was [indiscernible]

Well, compared to the previous plan, it's -- so nothing -- as I said, nothing has changed before the previous plan. Clearly, so the EUR 21 billion of disposal is, as I said, roughly EUR 11 billion of debt consolidation that was in the target and EUR 10 billion on equity side. So before -- versus the previous plan, these are the difference, nothing more than this. So we don't have other kind of differences, not on FFO because, more or less, it's the same with the previous plan, not in the dividend payment. And so the other point is only this, the reduction of debt. Clearly, now we may have some different assumptions related to -- you remember that in the previous plan we had also some FX impacted our -- an accounting effect because our debt is only -- is 100% hedged towards FX. So maybe the different assumption of dollars and other currencies may put some changes, but not changes that are related to the real trend of our debt. So the only change that we are doing in this plan is related on the disposal that we are doing.

Next, Javier Suarez over there.

Javier Suarez, Mediobanca. It's three simple questions on the change between the previous business plan, new business plan, that has to do with capital allocation. So it seems that interest rates are higher in the world, and the company maintains cost of financing stable. And I think that one of the charges you have, you are on that 25% of the total debt is at variable borrowing rate. So how it is possible that cost of financing stays stable? Second question is the company has announced a EUR 20 billion of disposal and maintains target for 2023 and 2024. So the company is decreasing CapEx, selling asset and is maintaining the growth. So can you help us to understand how that is possible? So I understand that maybe in 2023 and 2024 there is an element of capital gains going into the P&L through the asset disposal plan. But what about 2025? So if you are selling assets and decreasing CapEx, why that is not affecting your growth model? And the final question is on the statement you make on corporate simplification and more exposure to the U.S. So the question is, for a company that wants to accelerate expansion in the U.S., don't you think that you need an offshore strategy? Because when I see to America, most of the growth is related to offshore wind. So does the company intend to change its view on offshore wind? And the very final one is which are the opportunities that you see from the restructuring of the European energy market? So there is a lot of debate, and I guess that, that may change the way in which a company like Enel is operating. So which is the risk/reward profile for a utility like Enel in this redesigned scenario?

Thanks. Let me answer these last two questions. And Alberto, first two. On the restructuring of the energy markets, our view has always been and remains quite stronger this year, even that there is a need in Europe to add a market to the markets we have. So we, at Europe, largely relies on a marginal system short-term market concept, which functions and is a very efficient way of dispatching power plants across the Eurozone. There is a shortcoming that emerged quite strongly through these couple of years in the market that Europe lacks visibility on longer term than two years. So if you want to know the prices of energy of electricity in 3, 4 years, you basically have a lot of curves provided by experts and consultants, but the market doesn't exist. And we think that, going forward, this is: a, dangerous; b, damage to the European industry; and three, stupid because it really lacks the value creation that renewables bring to the table. So we have always been advocates of putting down a parallel market on a longer term where buy and sell on a 5, 10, 15, 20 years, as happens everywhere in the world, can also be taking place in Europe. The debate is very super simple right now. There is a set of countries and companies sitting in these countries that want this. Basically, the French and Southern European universe of Europe wants this. And the northern part of Europe doesn't understand and doesn't want this. So there is a dialectic, I can say, pretty strongly around this theme, which I think will result in a decision by Acer and, therefore, at the regulatory level in the various member states in the next few months. So we think there will be a parallel market on long term, which will not have an impact on the short-term market. We'll just give more depth, and I think it's a very positive evolution going forward and badly needed. On corporate simplification, and I mean basically the offshore issue, I don't think that the U.S. is only offshore. Actually, the amount of pipeline we have on the onshore in the U.S. is incredible. It's very, very strong. I respect offshore business. I think it is a viable way to create value and generate electricity. The problem we have with this technology is that it freezes capital for a long time. So people that are engaging in this business invariably have to withstand 3, 4 years of money at work that does not produce EBITDA, which I think is not really useful in this present turbulence time. And I think, by the way, this is much more for a specialized set of plays. And I think that is also reinforced by the fact that most of the players eventually farm out or they consolidate these assets due to the capital constraints and the particular peculiarities of this. So I think it's a viable tool to generate electricity, nothing wrong with that, but doesn't fit the integrated strategy we want to pursue in most countries, okay? So it's not a judgment on the technology. It's just that it doesn't really fit that much, okay, with what we want to do.

Okay. So an answer to Antonella. Sorry, Antonella, because I stressed the fact that nothing has changed versus what it was in the previous period when your question, what differences are in 2025 versus the previous plan in 2024. We clearly are reducing our investment plan versus the previous plan, roughly EUR 5 billion less. And then we are adding M&A that were not present in the same year of roughly EUR 2 billion. And our starting point is lower than the previous plan because we are doing M&A also in 2022 that is putting down the debt. So these three things together is the EUR 10 billion difference you asked. Sorry, but I missed the answer because I was focusing on the difference versus the previous period and not for the plan. Cost of debt stable. Well, it's a financial strategy to make this cost of debt stable. What we will follow? First, our cost of debt is roughly 3.5% this year. As I said in the presentation, the refinancing strategy is putting a debt lower level of stock because we will not refinance EUR 10 billion. And with a lower level of stock, the refinancing is the same cost. So we are refinancing at the same level of cost the debt that is going to be refinanced, first. Second is that -- so the consolidation of the debt of the target that we are selling, these targets are bearing a higher cost of debt because we are talking about LatAm countries and others. And third, with the proceeds mainly done in LatAm, we will reduce the debt of the receivable countries that we have in LatAm, so we will use proceeds to reduce debt in Brazil, in Colombia and in Chile. And as you see in the presentation, these countries are bearing an average cost of debt of 8%. So these three things together is bringing and keeping the level of our cost of debt almost stable. How we can maintain the growth? So I -- there is the chart in the presentation that I think is the chart -- let me check the number. It's -- what is it?

[indiscernible]

No, no, the #33. #33 is the main factor because you say we have, on one side, the increase in grids and other stuff, that is, so relevant, but not relevant as this way to grow. So this is the global situation. So globally speaking, we are talking this growth is based on these two main items. One, the commercial strategy. We are talking here about fixed price volumes. So we are talking about the value of our gas that is higher than in the past and in 2022 and services and then all the strategy of rest development, and now the rest development will impact in reducing our sourcing cost. Taking account that going and reaching 100% of coverage of our commercial position through our own production is what is giving us the first step of increase. It is what we say here, roughly EUR 600 million. Then the substitution, fossil to renewable, is giving us the residual 1.1. Here, this growth is based on, as I said, 7% increase in fixed cost, clearly, at prices that are prices set in these three years, because these three years is giving us the chance to set a certain level of prices being competitive with all the markets in which we are and then this push that is not so already meaningful but relevant to have the push in volumes and that based on services that we are now selling globally. These are the main items that we are clearly under with. We have the 21 gigawatts of renewable development. That is the base growth that we are following and will bring up these numbers.

Roberto Letizia?

As Antonella said, next year is a very busy year in terms of disposal especially and in terms of recovery of regulatory items. I wonder if you can give us some visibility on those processes. So how far are you in discussion with governments to get the cash from the regulatory proceeds. Have you discussed already with the banking system for having some factoring? Are you in advance stage with a potential buyer of the disposed assets. So can you give us visibility on how fast can you get this into the numbers? Wondering also if on disposals, which is already a huge number, but I'm asking if, for example, assets like the 3Sun gigafactory in Italy or eventually a new one in U.S. or part of your huge pipeline in renewables may be also a reserve for possible disposal going forward? Staying on visibility. Here, again, I would like to recover partially Alberto's question on pricing. So specifically, for example, what did you assume for Italy as price cap in first -- from the second half of 2023, maybe because we still have the current one for the first half of next year? But generally, what did you assume for the implementation of the EU price cap in Italy next year? And I wonder also if you made any kind of assumption of what could be the impact from the minimum 33% taxation on extra profit that the new government is going to introduce. This is very difficult. I understand, but maybe they can apply it at SPA level rather than consolidated level, and this may take an impact, for example, if they are looking only wind generation. So I would appreciate if you can clarify this. And the last question is on Italy. I see a lot of investment now in Italy. It's the majority of the renewable CapEx in Italy, 32% of the total. What kind of visibility do you have specifically for Italy? Because at global level is easier because authorization procedure gives us more visibility, but Italy is always a question mark. So what kind of visibility again do you have for this relevant number in renewables in Italy?

Okay. So I will answer to the disposals first, okay? There is, as you can imagine, when we set out this plan in detail, obviously, we are not thinking about starting. We have already started some of these initiatives. So clearly, when you look at the major parts. We have started the gas exit starting from Chile, and there is a discussion which we hope will materialize probably before the end of '22, which will trigger also the second part in Spain. We have initiated discussions on the major parts. So Romania, Peru, Argentina. Of course, I cannot disclose much about this, but the processes are in different degrees of advancement. The same for the stewardship partnerships that we are trying to set up in Australia and Greece. There are processes already underway. The question on 3Sun, on the factory in Italy, it is -- yes, there is also a likelihood that we will bring about a partner, a financial partner with us, hopefully within the year, but probably at the beginning of 2023, that will happen. And obviously, the same scheme, if we decide to replicate this initiative also in the U.S., will be followed also there. So it's a deconsolidated asset, by and large. You might look at it as a stewardship investment probably in a cycle of 3, 4 years going forward, okay? Then there was a question on the short-term capital investment on renewables in Italy. Now on the short-term capital investment in Italy and renewables, we have a complete clarity because either you have the permits now or you don't have an investment. And we have a complete view of that. Whether then '24 and '25 -- we're talking about '23, that means, okay? Whether then '24 and '25 can eventually be a lot larger, will largely depend on what kind of measures this government will finally implement to streamline and implement the suggestions at European level were already made, the no zone areas, zone areas, and therefore, time caps to the transient of regulatory permits of no more than one year. If that happens, then we will see a pickup -- a huge pickup on investment. I give you a number. The pipeline of renewables that we have in Italy today is about 30,000 megawatts, which is quite large, clearly in different stages, but we think we could probably pick up in a big way through the end of '24 and '25 if in the next months we will see the implementation of some of the measures that at European level have been suggested to member states, but we don't have yet a clarity on that. So the '23 number is clear. It's whatever has been authorized in '22 is going to be built through '23, and it's in the figures here. Then maybe if you want, we can find out what the precise number in '23 is. But -- then there was a question on the assumption of what we did on the plan should -- have we prolonged the existing price cap regime that has expired? And what is the price cap we're assuming?

Okay. So the -- remember that the price cap in place both in Italy and Spain, with different expressions, but at the end, are capping the price that we made to the final customers, not the wholesale side. In Italy, so taking from the decrease, what is this price? So the -- what we agreed upon is EUR 110 per megawatt hour sold to the final customer because it's 67, 65 at the wholesale side, but then so the decree -- defer -- requirement of decree has expressed that for the company integrated, you have to take into account other stuff. So at the end, it's roughly EUR 110. And Spain is a little bit lower. We are talking about EUR 106, EUR 105. These are the numbers that are in place today. So this is what we have already taken into sort of the clear impact that we would have. Then discussion around the fact that in Europe the level is not the final customer. This is on the wholesale. And so the European framework may be different. We don't know now what is the final end of this discussion. Then we are -- so what we assume is that this decrease will end at the end of June, also because if we are discussing of the European framework, we think that everything has to be aligned with the European framework. And in this case, what we have to understand, if also an extra profit taxation will be applied also to power utilities on the oil and gas sector, has seems to be the case looking at the European framework. So difficult to understand what is the future outcome. As I said before, so we have accrued some other level of covering potential increase that we think that applying the European framework will it not to be the case. Because, in this case, clearly putting the level of price set by the European framework, we are setting price for our customer base well below, so the price level of the European framework.

Emanuele Oggioni.

Emanuele Oggioni of Kepler Cheuvreux. I have two questions. The first one is on your delivery for the 21 gigawatt, so 7 gigawatts a year in the next three years, after indeed also, due to external factors, et cetera, you slightly missed in the last two years in terms of delivery, the 6 gigawatt and 5 gigawatt in 2021. So I wonder what is the -- what is the visibility or why has been improved this target on a yearly basis. For sure, your pipeline, mature pipeline for the next three years, most on covers, I think, by 5 -- 3, 4, 5x this amount of gigawatt, but why you have increased this target? And the second question is on retail business, and in particular I focusing on Italy. Because the market supply business, I would like to understand your view on the structural profitability of this business unit in the future after the current energy crisis and the reshaping by all the players in the field, basically towards variable price contracts. So everyone basically will offer almost similar offer. So no more fixed-price contracts, only variable-priced contracts. So I think they all could be, in my opinion, the competition will be higher for all the players, including Enel. So what is your opinion on this?

Yes. On the renewables, both '22 and '21 years were affected by peculiar situation in the U.S., which was the human-related -- human rights-related issue on PV panels coming from China with polysilicon produced in Xinjiang, okay? The delay in the imports of PV panels from China is responsible for the delays in '21 and the delays in '22. And this, by the way, is one of the reasons that brought us finally to decide to invest in a PV factory to get out of this potential ongoing saga that could be one-time human rights and other times something else. So it has to do with that somehow. Out of this 21,000 megawatts that we plan to install during this next three years, 10,000 are already under construction. So they include also the about 2,000 megawatts of cumulated shifts in the U.S. that I just mentioned. So we have to completely confident that this can be accomplished. It's -- I think it's just normal for us to deliver at this level. And although we missed our targets, let's not forget, we are still have the fastest-growing renewable company around. So considering that we also don't have offshore, this is just onshore PV and wind, it's a huge number. But we don't see that as a concern anymore, given the fact that we have now kind of hedged, if you want these additional delays during '23, they will be resolved. That President Biden has passed a resolution that this freezing of import of panels have been released until 2024. So we should be covered during this time frame. And then the factory, we kick in our production through '23 and the '24 year, raising productivity at steady state 3,000 megawatt a year level. On the structural profitability of retail business, it's completely right what you said. Today, and I think probably we are going to see this during '23 by and large, most players have to go to variable pricing policies because the risk is basically impossible to sustain. So it's not a choice, it's the only choice for players that don't have production that they can only buy and sell. And can you buy and sell taking the risk of the swings and volatility for '23? I think not. So it's not a surprise that this is going to happen, and it is going to probably be there for the next 12 months, I think, more or less. We are not in that business much. We think it is a business that has basically very little value and basically very little differentiating flavor, and it's not the way to serve customers. I think the customers need to be given more value in terms of protecting them from this completely unwarranted and crazy volatility that gas is throwing into the system. So you would see us going through a fixed price policy, having hedged our position because it's basically a hedged position in renewables and/or having hedged it because we hedged the gas we import into the Italian and Spanish nation. So the fact is we think long term or medium term or short-term, fixed price will be the differentiating factor from us. In fact, the whole strategy is about more coverage of fixed price contract and less variable price contracts as a strategy going forward. So you have to see there will be a market that will start -- will slowly start to differentiate a large number of customers at fixed price, and a large number of customers at variable price will emerge as a function of this. We are not going to be the only one doing that. Everybody that has some kind of fixed price production will try to do more or less the same. And therefore, there will be a competition between customers rather than between producers who can grab the fixed price energy will win.

Next, Wanda.

Wanda Serwinowska, Credit Suisse. Two questions from me. The first one is on disposals. Can you comment on the potential buyers, so what type of investors are basically willing to buy your assets in LatAm? And do you see any impact on the price that the investors are willing to pay given the interest rates going up? And if I'm not mistaken, you said that 8x EBIT to EBITDA, it's a conservative assumption. So do you see some upside to your EUR 21 billion proceeds? And the second question is on the long-term power market design. EU is working on it. Can you share your expectations? I mean anything -- your thoughts on the long-term power market design in Europe, when do you expect any clarity?

On the second question -- the first one on the price impact of the interest rates on LatAm, I think Alberto can answer that. On the second question, we think that this debate has been going on now for 6 months at least because this is when Acer received on the EU, the mandate to really work at that. There was a first draft that's circulated with, I would say, pretty heavy discussions between these 2 fields. I know that Commissioner Kadri Simson is working on that. We have a lot of interactions with the Commission. We think that this might be coming in the spring, so during springtime, which for Europe is a short time. We would like to have it before. But I think by the springtime, we will know the result of that. So that's the item that will come up. That means that then probably you would see these markets really pick up during '23, '24, '25.

Well, as far as the disposal plan, clearly, you understand that we have already initiated all the contacts for all targets that we have in plan for clearly, it's a wide range of assets. So you have no crystallization of potential buyers. And we have plenty of infrastructure fund, oil companies and grid companies that are seeking for our grid assets. So it's a huge group of potential buyer. What I may say is that -- well, so the level of multiple we are taking is well covered by the first round of interest that we got. And that -- yes, so on LatAm, you may have some sort of concern about the level of interest rates, but not for some assets that may be deemed strategic for, so the counterparts that are looking at them.

Alberto Gandolfi has a follow-up question.

Just very quickly, following up. On prices Alberto, did I get it right, you're essentially assuming -- forget for one second the -- I would ignore the retail. But you're saying the wholesale, you're assuming throughout the plan for Italy, Spain, EUR 65 to EUR 67. I was wondering if that is correct. So basically, that's the price including the cap on inframarginal technologies. It's quite impossible.

You're talking about the claw back.

Correct, correct.

The claw back -- so the claw back in place that will end June 2023 in Italy, is taking into account the level of the wholesale price is set at EUR 65. It's strange because it's EUR 65, but if you pass EUR 65, taxation is due on EUR 58. So -- but we will not pass it, so it's EUR 65. Then there is the way in which now we have agreed upon with regulators, what means the final decree, not this decree, but the decree of August, to try to understand what the decree is meaning that when the decree says that the price would be applied to the third party if you have some intercompany contracts within the group. Because it cannot be -- it would not be EUR 67 at the end of the customers because we have all the costs of retail companies. So after having done some work with the regulator, putting in place, putting in, in the calculation of the retail cost of the personnel or the other stuff, the normal marginality you can get, so on and so forth, we will get that EUR 110 is the base for the price to customers not to be impacted by any sort of claw back.

And that includes supply cost and supply margins?

Includes everything.

So just the wholesale, what we see on the forward market in [indiscernible] and in Italy, that's EUR 65, EUR 67, and then have the usual cost and margins. And the entire plan, you do that?

No. We are assuming claw back -- the level of claw back is assumed until June 2023. It's on the decree in place, okay? This is the level of claw back, and we are taking and putting the taxation resulting in the price we are assuming in the plan in the tax issues in the numbers of 2023. So we are going to pay if claw back will stay the level it is, you're going to pay with an amount of claw back.

And '24, '25, you no longer have the claw back because...

We have not put exactly an assumption on this, but we've got an overall amount that is going to be covered every kind of new regulation that may arise that is not today in the decree as a protection of what may happen after.

So is there a way to quantify what the EUR 65, EUR 67 in '23 becomes in '24 and '25? So what type of wholesale price, if you assume...

For us?

Yes, for you, have you assumed for Italy, Spain? Just turning, it's quite a key assumption...

For Italy and Spain?

Yes.

Well, Italy and Spain assumptions, it's in annexes in Page 7 -- 5.

Yes.

These are all the assumption on price in Italy versus Spain, TTF and others.

The problem, unfortunately, will be that because of this indirect system that they have established Italy and Spain, where they cap the energy coming from renewables for until a certain date, and then claw back the money through taxation. So you have a price that you observe on the market, which might be even above that. And then to the effect of what money goes to the players, you have to take this indirect route and take off the excess.

So what is actually that...

So in short, the question is, what is the price that you observe on the market? And that's something. Well, if is, how much money do you really get?

Yes. That's the question.

The question is probably, we assumed that one way or another, we don't know which one because we don't have a clarity on that, the system that we have in place today continues.

So that's EUR 65...

EUR 67, EUR 65.

So that [indiscernible] throughout the plan. It doesn't matter how.

How? We don't know. But this is the negative assumption we have today in the system.

No, no, it's very important.

In the system, which doesn't mean that the overall price that you observed will be that.

Sure, sure, sure. But you're not going to be allowed to make more than that, that's what you're assuming.

The point is only to -- so for us -- so if you take -- because we don't know really how the European framework will be applied also on the decrees that are present today that are approved in Italy, Spain. If there decree, if the European framework would be applied at that level, the level Europe has expressed, no impact in our numbers so will be in every year. So we are by far below what is the European framework.

I think [indiscernible] has a question on the same subject, I guess.

Exactly, exactly. Yes. So just to clarify. Basically, if we take away the disposal, your estimate, let's call it 2024 have been upgraded by 15%. Can you tell us in two words, which are the driver of this? Why estimates in this plan are higher than the one in the previous plan?

Estimates of what?

EBITDA.

EBITDA. Okay. Well there are many assumptions. That's what we have already expressed in the Page 33 of the presentation. The increase is based on: one, higher volumes, higher prices, substitution of thermal capacity with renewable capacity and higher margin coming from gas because of different prices, higher prices from gas. These are -- then you have some efficiency because we will streamline the group and the other kind of things. These are the main items that will drive the growth. On top of this, we have -- we took in the plan what we have today in the decrees, at the end of the decrees, so now it's June 2023. And then we have taken not applied to Italy or Spain, but an overall level in Europe, another some that is not defined today that may arise if other measures will be applied in Europe out of them. As I said, if the regulatory framework will be applied 100%, also the numbers that we have in the plan are not to be applied to us, then every country may take different decisions. That's why we took what we have today. And also, we have took another level of amount to cover future headwinds.

Okay. If there are no more questions from the room, I'll start to call the analysts connected via web. I'll ask the analysts to unmute themselves as we cannot do it from here. So the first one is Javier Garrido.

My first question would be on Italy and the proportion of sales that are covered with your own generation of fixed prices or with a gas hedge. If I look at the 9-month results and even if I assume the normalized output from hydro, I can see 28, 29 terawatts hour of production in Italy at hedge prices and 59 terawatts hour of sales to clients in the free market. How are you planning to close that gap? I heard that you said additional renewable capacity and additional PPAs. But is there a market big enough for you to cover that very big gap in the next 2 years, 3 years? I'm just curious about how can you change the profile of your business so rapidly, given what has happened this year and the big increase in [indiscernible] Italy? That was the first question. And then the second question is the decree approved [indiscernible], I can understand that [indiscernible] it's for you to have all the details, [indiscernible] is more [indiscernible], Italy is looking at [indiscernible] measures that [indiscernible] with the tax, but some point in Q3, do you think this is a sustainable decision? Do you think that marks the current intervention [indiscernible]

Can you repeat the second question because you were breaking up?

Javier, the second one was impossible to be heard.

Can you try the second question again?

Sorry, I will try to be clearer and shorter. There has been a decree in Italy overnight. And if I understand correctly, the decree is looking for intervention prices but not an opportunity, not even for the full year -- did you think this question is sustainable? Or do you think that the cabinet will look -- will need to do something else like equipment?

Okay. Let me answer this question, and then Alberto will give you the percent -- the fixed price and variable price mix and how we go about that. The situation in Italy, Spain, in general in Europe is not at all stable in many ways because the root cause of all this instability is not fixed. I mean, there is no clarity about what the gas prices are going to be doing after the wintertime, and there is no clarity about how what to do with it. And without an agreed mechanism on a price cap, all this remains turbulent. And that is the reason why we are predicting turbulence going forward because there is no clarity about exactly this. The decree that was just issued today, doesn't seem to affect right now the numbers we have put forward to us because I was reading it in real time. It affects some support to another 600,000 families that add to the 1.5 million that have an income judged not enough to sustain the prices of energy, and that is coming as a function of being financed by the -- by a fund allocated to that by the state. Then there could be an interpretation -- then there is this 33% increase in windfall tax, which for us was low, and it will remain low as the basic windfall is simply not there. And -- but this is not the end. I mean I agree with you. This is not absolutely the end. And I don't think there will be a potential end until we have a clarity on the volatility of gas prices, this is overall. I mean it's not just Italy, it's also Spain, France, everywhere. And that is why we think we need to be conservative on some of this assumption going forward, probably during all '23. And hopefully, that will be enough to really have a different view of what to do with the TTF index. On the percentage of production vis-à-vis sales in Italy, Alberto, you have something.

Well, Italy is the country which clearly starting from 2022 is a little bit difficult to have the comparison between 2022 and the other years because in 2022 for all the things happened, we had a big increase in the coal production that will not be present because of the numbers that we have in 2025. So the coverage is difficult to say, so to give an answer. But taking account that so more or less the coverage of the fixed sales in Italy stay below 100%. So it's the only country in which we will stay around 80%. So the very difference between the 2 items in terms of sourcing is that in 2025, we are assuming a coverage of roughly 65% coming from renewables towards what we had in 2022, that is roughly 40%. That's because of the duality impact in 2022. That is an exogenous factor. And on the other side, because of the development of renewables that we are seeking in this period. What we are doing in Italy, on the other side is to reduce the variable costs, mainly for the business sector to concentrate further our commercial effort on the big fixed price, mainly in segment that are consumers and some office and medium companies. So we will -- the plans foresee a reduction in the position that we have in variable contracts in the large business.

Okay. We go next to Manuel Palomo.

I've got 3 questions, if I may? First one is on the divestment plan. You shared with us very clear view on the dilution impact on the EBITDA that you expect in that Slide 42. I wonder whether if you could also share with us the gains that we took in each year as a result of those divestments that I assume you will include as part of the ordinary results? Second question is on -- well, sorry to go back to the prices. But I was looking at previous year's presentation. And the previous year presentation, you were telling us that you were assuming sort of a flat EUR 75 megawatt hour revenue price all along the 2021, 2030 period. I wonder whether you could share with us what is the comparable figure in this plan? And thirdly, I also saw that you plan to make a big effort in investments in [ West ] for gigawatt throughout the plan. I wonder whether it is for gigawatts are condition to anything? Or whether you believe that they are already in the right market conditions for these investments to take place?

Let me answer to this last question, and Alberto will give you the other 2. In particular, on the second, there is an assumption table on the annexes that show you the assumptions we have. But on the battery side, there are now an increasing number of regulatory frameworks that specifically remunerate battery services for flexibility to offer to the grids. Every year, every month, there is more regulators that finally come and realize what the services these batteries can offer. Roughly, these investments are going to Italy. Don't forget, we won a capacity tender last year for about 1,200 megawatts, if I don't go wrong, which is part of these 4. So a large chunk is in the country. It's a regulated asset base at this point because it's based on a capacity payment. So it's a very little merchant exposure. The rest is mostly U.S. and Chile. Basically, we're putting these batteries wherever there is a sense in the in the convenience of coupling them with network remuneration services. And I think you will see this number grow. I bet with you that probably next plan and the plan after that, it will bring about larger number of batteries in the investment cycle because simply they makes sense for the increasing demand that flexibility is asking to networks. From a permitting standpoint, they are very easy. There is very contentious about what is the required out of the battery. They are not invasive. They're not invasive. They don't provide any particular contradiction. And so they are also quite fast in the implementation cycle. But largely in the plan, this 4 billion are Italy, U.S. and Latin America. Spain is a little bit behind because the regulatory system is still not fully appreciating this, but there is a lot of opportunities to put back batteries in the nodes of the networks there. We will accelerate it probably in the next few years.

Well, on -- if I got correctly, the question on prices, I think that you refer to the overall price offered to customers for the whole integrated strategy of the group, EUR 75 per megawatt hour. If you refer to that number, so the new integrated strategy focused on the 6 countries that are -- we are focusing on is working with a higher level of price. So the EUR 75 is ranging around EUR 100. And the unitary integrated margin that was in the range of EUR 30 in the previous presentation, now we are working with the higher level of unitary margin in integrated margin that is ranging around EUR 37, EUR 38. This for the year of the plan. Going down in 2025 and then reaching the level that we set before when prices will be established. What we think is this the level of prices will remain higher than previous assumptions also for other years because of the backdrop of this crisis that will also drive inflation and will drive a higher level of prices. This is something that we are seeing in all the tenders that have been now issued after or along the crisis because now also in Latin America, that is by far from sort of the center of the crisis, prices signals for the long term set by PPAs, tenders of distributors and others is going to be set at a higher level. And we are talking about 20%, 30% higher than the last 10 that we had before the crisis spiked. And -- for -- if I got correctly also the first question, related to the impact of the disposal plan, you have at Page 42 that is the impact per year of what we foresee on the disposal plan. If the answer -- if the question is how much -- how is the level of capital gains spread around these 3 years? As I said before, so the capital gains related with our stewardship model implementation that falls also in the proceeds of the disposal plan. As I said, the overall amount, 2023, 2025 is EUR 900 million. This EUR 900 million is more skewed towards the timing, which we do the transaction. So it's more skewed towards 2023, where we are assuming roughly EUR 500 million, EUR 600 million, and we are assuming EUR 150 million per year in 2024, 2025.

Yes, I think Manuel was referring at the capital gain from the disposal plan, ex stewardship.

What -- so ex stewardship, the capital gain is not something that is related to our ordinary results. The only capital gain that are assumed in the ordinary results is for the disposal. They are based on our stewardship business products or when we establish a new joint venture or we sell stake from a joint venture. So capital gain related to where I say, Argentina disposal or Peru disposal is not -- are not counted in the ordinary result of the plan.

Okay. Next, we open the line of Robert Pulleyn.

If I can ask just a few more questions because there's a lot in here. First of all, an apology to return to previous ground, but there still seems some uncertainty from investors on this. So for the avoidance of any lingering doubt, can you confirm that the 2025 financial guidance is based on the effective realized wholesale power price of the EUR 60 to EUR 70 per megawatt hour consistent with what you just said for 2023 and not the spot price, as you show on Slide 60? This is the first question. The second one, if we can talk about U.S. strategy, which I thought was very interesting. Previously, you indicated it's a desire to acquire more exposure in the U.S. And now you talk about crystallizing value from the existing position. Are these things still consistent? Or is the acquisition maybe now on the back burner? And the third one, regarding the balance sheet. I believe I heard that you aim to recover the regulatory cash flow outstanding in 2023, which would be fantastic. Could you provide maybe some reinsurances or confidence to the market as to why you have the confidence that this will be an inflow over the next 12, 14 months?

Let me give you the second answer -- the answer to the second question, and Alberto will cover the first and the third. We have looked a lot around the U.S. on acquisition, and we have always discovered basically, many companies with regulated asset bases that fit more or less the size of the dimension we were looking at. And then so that we could indeed perhaps think of creating value by adding technology and improving the asset base, technological background and therefore, it's performance at the right levels. But then understood that the way in which the U.S. is looking at, and when I say the U.S., it's basically most of the regulatory frameworks that exist there. There is not one that applies everywhere. But in common, these regulatory frameworks have that there is a quality of service generally accepted to be good in the U.S. that is substantially different than the one we think a modern networks and low voltage and medium voltage system should have. And we understood that an acquisition based on obviously a premium to be paid for this acquisition and various commitments that players have to do in order to be accepted, would not really enable value creation the way we expect would basically result in static position with very little forward-looking value creation. In hindsight, we can say that we were perfectly lucky that we did that, that we observed and therefore, did not involve ourselves into an acquisition in the U.S. in that sense. Because today, with the inflationary pressure and increasing energy costs also in the U.S., regulators are even less inclined to allow for additional investments to be put in the tariffs. Therefore, we would probably have had even a back -- pushed back. So there is definitely a back burner, if ever an acquisition is to be considered in the U.S. in this context. The other way around is, therefore, emerged in the fact that we do have realized that we have a completely new animal in the U.S. that does not really exist in the system, but it's more fit for what technology is bringing without getting into the regulatory nightmare that seems to be evolving there. And that is explaining the change. So yes, you're right, there is not an acquisition planned in the U.S. in this next 3 years because of the logic I have just explained.

Well, so coming again -- first of all, the answer on the balance sheet recovery. First of all, signs of recovery are already present in 2022 because out of the September conference call, something and countries and governments have made some good step ahead namely in Italy, with all the pay [ equation ]. So the balancing between the costs we pay for regulated power and the price we sell the regulated power has been set and will be set completely within the end of this year, recovering almost EUR 2.5 billion of impact already this year for a change in how the regulator is going to pay this item. Romania, as said almost everything for this year and also for the next years because now we demand at reselling of power at certain price to retailers and distributors, the impact -- the financial impact of 2022 has been set for 2022 with the recognition of this gap as an investment in the rubber and for the next year, not having this impact because the regulated price will be offered to the grids to the distributors. Spain, now the cap on gas system is going now after the first months of problems because of the new mechanisms now is going well also in terms of payments to retailers and others. So things are going better than what we saw in September. What we are assuming in a plan is that not all 100% of the working capital induced by regulatory impacts will be recovered within the plan. This is not the case we think that will happen, but it's a sort of another level of security that we are putting on our financial numbers. So if you look at our financial numbers, take in account that around is not assumed to be cash in, while there is no means because it will not happen, it's only a safety level of money that we put in the plan. When it comes to prices, now I understand it is -- so the question is, I'll try to explain what we do. So we don't sell. So we don't see what is the wholesale price for our integrated commercial strategy. We produce our energy and we sell our energy to our customers. That's why we cover 100% the sales with the production. In the middle, there is the wholesale market. We use the wholesale market only to do 2 things. One is to cover in advance the energy we will sell. But at the end, the very point that you have to see is the prices we will offer to customers. When I say that the prices that we will offer to customers in every country, Italy and Spain, our prices to our customers will be set ever lower than the wholesale price that you may see on the screen because it's the way in which we act on our commercial strategy. So it is not -- can be so lower because I remember you that having significant market power, we are obliged to offer price to customers that are not so far versus the market price because the others have to be to allow to replicate the offer we do, okay? So this is the way in which we set prices. below the market price, the wholesale price, but in a range not so far from it. On the other side, and it's on the claw back side, we have set all the claw backs with these prices that will be derived from these prices until June. So until June, instead of this EUR 67, that for us is EUR 110 because for us, it's not calculated on the wholesale side, but because of the decrees in place, is calculated on the final price that we do to customer base that is at EUR 110, we have defined and put the cost. So the taxation that we will get because of the prices that we are setting to customer base and this limit. After June 2023, is not a clear sign because today, there are no other decrease in discussion. And for the other period, we have set apart a certain amount of taxation, not directly impacting our price policies that in case of, so new decrees will be taken. Having said that, I remember, if after June or if at the beginning of this year, all the decrease will be changed in the line, in the face of the European framework. With the European framework, no impact would be in our numbers if the European fair market will be adopted. If to be adopted from June, the impact of the first 6 months is already in our numbers. If -- so it will be adopted from June, no other impacts are in the plan, but we have set apart a certain amount of potential taxation that may be an upside on our numbers. I hope it clarify the price point.

Next, the James Brand.

So I won't go back on the EUR 65 again. But -- so the question I have is that in the time, you're targeting a very strong increase in resale profits, particularly in Italy, and I think you mentioned earlier that you've gained a lot of customers and therefore, volumes were up. But I was wondering whether you could just give a bit more detail on the drivers for that strong increase? Are you assuming that you managed to hold margins in the face of much higher bills? And also, I'd be interested in the timeline there. So does that start to come through from 2023? Or is it back-end loaded? And thirdly, how you're thinking about bad debt in the retail business. I guess you're not too concerned about bad debt, given you're forecasting a very significant increase in profits. But maybe you could flesh out a bit more what your considerations are in that area? And then secondly, you had on the slide on your disposals that you are looking to crystallize one in renewables I was wondering whether you could give a bit more detail on what you mean by that? Is that just the odd farm down? Or should we be thinking about something more significant?

Let me give you a little bit of an impression on this and on the bad debt, and then Alberto, again, will go through the pricing mystery. But now on the disposal of renewables, basically, these are those renewables that do not connect to a large customer bases. So they are basically, you can look at them with renewables that have PPAs attached to them, which have been basically stipulated and therefore, are derisked and therefore, cannot be used to serve large customer bases as we try to do every time we can. And therefore, it's a way of monetizing value. There's not a lot of megawatts. It is just, as you noticed, an opportunistic way of crystallizing value. And you will probably see this going to disappear because it's either going to be stewardship from the beginning or integrated commercial strategy at the beginning. And so this midsized field will disappear after this cleanup. On the bad debt, in the retail business, the bad debt is a function of what invoices you send out. So if you look at what invoicing volume, utilities have put up in 2022. You can say that the invoicing basically doubled in its monetary value because we simply had the inflation of prices driven by gas. So automatically, you have optically to see bad debt going up because the percentage of bad debt physically grows as the inflation -- as the tariffs and the prices of the energy go up. But if your question is, are people really not paying? The bad debt is just a way of classifying a certain percentage of your invoicing based on the past. What happened to the pattern of paying it hasn't changed much, at least for us. So far, we have not experienced patterns of payment behavior worsening their normal past track record, that has to do very much also with the fact that a large chunk of our customers have not experienced price variation and therefore, keep paying. So I don't see that as a threat in the '23 and probably '24 going forward. But physically, optically, you will see the percentage of bad debt on the utility sector going up because invoicing goes up. It's just the way that the system is reporting. Pricing.

Pricing.

Yes.

So I don't know if you answer on the bad debt.

Yes.

Okay. So pricing, how we can have this increase in Italy? As I said before, so I remember for clarification. Italy is set to go from 6 to 11, okay? This is the numbers that we had. 6 is, so the level we are assuming this year. The normalization of profit in Italy is bringing this level -- the retail level in Italy is done. So we will close this year around EUR 300 million, okay? The average normal results of Italy for the last years 10 -- sort of 10, no but 5 years, was roughly ranging between EUR 2.5 billion and EUR 3 billion. This is the normal level. So reestablishing a normal level of profitability and putting the growth in grids in the range of EUR 300 million. We have roughly a normalization of this number that is in the range of 8, 8.5. So the very growth is related to 3 pieces of growth. One is the commercial strategy. Commercial strategy is giving EUR 2 billion more. One is related to prices. Prices is set at a higher level. One is related to volumes. Volumes is at a higher level versus 2022. And finally, one, say -- mainly, one is related to the substitution from renewables to thermal capacity on one side and reducing the gap we had in 2022. So the gap of covering all the fixed costs. So sourcing, EUR 1 billion. Volumes, roughly EUR 700 million. Prices, roughly EUR 1 billion. Why prices is setting higher than 2022? Because we didn't rise the price in 2022. So the repricing effect that we have made at the last part of this year are having effects on 2023, 2024, 2025. This is why not -- if you look at the wholesale price in 2022, it means, okay, so we got EUR 300 per megawatt hour and the wholesale price, how you can increase prices? But our prices were not set at this level in 2022. We fence our customer base, offering an average price that was in the line of EUR 140, EUR 150 megawatt hour, this was the price we offered our customer base. In the last part of the year, we have a repricing effect that have raised the fixed level of price, then we will set this price for contracts on 2, 3 years, clearly working on the churn rate. In the case of prices will go down, and we will have to reprice our customer base because an increase in churn. Churn is ranging today 5% versus 15% of the historical average. We have assumed starting from the next year are a store of the normal level. So churn rate is set in our plan still at 14%, 15% -- 15% of churn like a normal year. So this is the way in which we will work that way. All the claw back for these price and for what we thought -- we said before, are included in the plan for the visible span of time in which the decrees will be in place. And as I said before, another part, not clearly defined and put in a specific decrease has been set in the plan to cover further decrease of further claw back or the prolong or the claw back. Covering 100% of the claw back until 2025? The answer is no because we are assuming that starting from 2024, situation will get normalizing. And for this, so all -- we assume that all the decrease and the regulatory activities will go down, so starting and driving for in new normality.

Okay. It looks like we don't have further question on the web. I'll be the voice of José Ruiz from Barclays. So the first question of José is, how much CapEx are you removing from exiting markets like Argentina, Peru and Romania, from your total? The second one is, are you dropping your 70% payout dividend policy? And then I think the only one left is, how much are you reducing your minority interest in your plan?

Yes. No, we are not returning to a dividend payment of 70% or x percent. We're just maintaining the EUR 0.43 flat. Only adding that for '24 and '25, this is to be considered a minimum. So it could become higher. Okay. And how much higher it depends on what happens in '23. Really, this is really the year in which turbulence might be slowing down, and therefore, we can have a better policy. But for sure, EUR 0.43 are there. So it's a base. And how much CapEx we removed in exiting those countries, I don't know the figure...

How much CapEx we will [indiscernible] -- in the previous 3 years, so 2020, 2022, we did roughly EUR 5 billion in the disposal.

No. The question was, I think...

It was a question that was like...

I think the question was, by removing these countries, if I got it right, how much CapEx we are not deploying in the next 3 years, right?

Yes. So how much CapEx are you saving removing the...

So in Peru, in Argentina and in Romania, how much CapEx did we plan in the previous plan that we are not planning any more right now?

EUR 5 billion.

EUR 5 billion. Okay. All in Argentina, no?

No, no. And also Romania, not only in LatAm, EUR 5 billion with Romania. Without Romania, we are talking about EUR 3.5 billion.

Yes. And then there was a third question. How much...

How much are you reducing your minority interest?

How much are we reducing the minority interest?

Well, the page -- so in Page 24, so the group net income to total net income increased for 3 percentage point. So this is the increase of net income because of reducing our minorities. 3 points, 3 points group net income to total net income.

I think we have a follow-up question here in the room. Javier?

So apart from the asset disposal, there is an argument that the company should reduce corporate simplification. So the question is, have you considered any measure to reduce that corporate complexity in Latin America referring mainly to Enel Americas that is maybe suboptimal in those terms, what the company could do to improve that?

I think clearly, there is a very strong case even stronger now that you have only 2 countries and not 4 after the simplification. So what sense that does it have even less than before, okay? So I think you have a very good point. This is something we might look at during '23 with our shareholders. It is not one way or another, which of the ways we have to solve. This is not in this plan. There is an upside, I think, overall. It will come with some buyback or some kind of CapEx to be deployed. But for the time being, it's not addressed in this '23 year, okay? So it will come up because it's clearly totally obvious that you cannot have a holding company with 2 companies only, one in Brazil and one in Colombia, it doesn't make any sense.

And then on the sense of urgency some of the countries in which you are now targeting a disposal, you could argue that the situation, the political situation and maybe the investor appetite is lower. So what level of comfort do you have that this EUR 20 billion of asset disposal plan is going to be completed in 2023? So the thing that I'm trying to capture is that this is something that is going to be imminent is realized at 70% is...

I think, yes. I think we have advanced in these processes already. So it's not something we have to initiate, and we have pretty strong evidence that there is important appetite for these assets, which was a little bit of a surprise, but then we saw that the risk profile of Latin America is comparable comparing it to, for example, the Eurozone is not as bad as you think. But they don't have a war. They don't have a gas crisis, and they don't have governments that do clawbacks and issue taxation. So it's relatively a mild environment in terms of regulatory and geopolitical concern at this point in time.

Excuse me for being a little bit direct in the question, but [indiscernible] out of 100, the level of execution of that asset disposal plan as we speak?

It's above 60%.

I think there is another follow-up. Roberto?

Really, really, very fast. Does the EUR 21 billion disposal includes those disposal of stewardship or the stewardship will go on top of that?

No, it inclusive everything.

I think we don't have any further questions from the room here. We don't have any questions from the web. So I think we can thank everybody for the participation of today's event, and we can close the event here. Thank you very much.

Thank you.

Thanks.