Engie SA (ENGI) Earnings Call Transcript & Summary

Good afternoon, everyone. It's a great pleasure to welcome you to Engie's 2024 Full Year Results and Market update presentation. So we have 3 speakers today, Catherine MacGregor, Pierre-Francois Riolacci, and Paulo Jorge Almirante. A quick view of the agenda for this afternoon. In the first part, Catherine and Pierre-Francois will review our results and the main events of 2024 followed by a short Q&A session. In the second part, Catherine will lead us through the market update. She will be joined by Paulo, Senior EVP in charge of Renewables and Flex Power. Then we'll have a short break, and Pierre-Francois will present the capital allocation strategy and our 2025, 2027 financial outlook before some closing remarks from Catherine. Finally, there will be a longer Q&A session. We'll take questions from the floor and online. With that, over to Catherine.

Thank you, Delphine, and welcome, everyone, to what I hope will be an informative event. We hope that in a couple of hour time, you will go out feeling better about Engie's strategy, why we are doing it, how we are going to be implementing it and how we will achieve our ambition to be the best energy transition utility. But to start with some brief reflection on what we have done in 2024. We extended our track record of delivery, a third consecutive year of net income above EUR 5 billion despite a normalizing market environment. In fact, in 2024, it was a year of record net income and so at the upper end of our guidance range. Talking of records, the rollout of our growth strategy accelerated with record commissioning of renewables and battery capacity to add to wins in power transmission projects. And this was accompanied again by a stellar level of execution. And we continue to become greener in line with the commitment to net zero by 2045. And then last week, the EU Commission has given us the final approach to the Belgian nuclear agreement, which, as you know, addresses a long-standing source of risk from a group in the form of nuclear waste storage liability, among other things. So adding some color to these results, EBIT, excluding nuclear at EUR 8.9 billion was down 6% year-on-year. That is to be compared with a very high 2023, with renewables, networks, retail all up, Flex Gen and Energy Solutions virtually stable and GEMS significantly down on this normalizing market volatility. We had increased nuclear EBIT and a stronger financial results. So our net recurring income group share grew by 3% to EUR 5.5 billion. And the cash flow from operations matched 2023 record figures at EUR 13.1 billion, which means that we will be proposing a EUR 1.48 dividend, up from EUR 1.43 the previous year, which will be paid at the end of April. Moving to next slide, greenhouse gas emissions from energy production in 2024 were 48 million tonnes, down from 52 million tonnes the prior year, down by more than a quarter in 3 years, which brings us ahead of our 2030 targets with tailwinds in Europe, for example, for very low CCGT load factors. And in particular, I think it's noteworthy that we have addressed our 2 remaining position of significance in coal with only a residual stake in the Safi plant in Morocco and a road map to full exit in Chile by 2027. The share of renewables in total power generation capacity rose to 43% at the end of 2024 from 41% a year earlier. And the percentage of women in group management continued to steady rise at 32%. As I mentioned, 2024 was a record year for Engie with 4.2 gigawatts of newly commissioned renewable capacity. At the end of the year, we had 46 gigawatts, of which 27 in wind and solar. But growth is only good if we execute well, which is what I really want to emphasize the business, this business, your business, Paulo, has become a real machine of efficiency and constancy. It is the third time that we are opening about 4 gigawatts on average. It's been achieved with outstanding quality of execution, both virtually on time and slightly below budget on average. And at the end of the year, we had 75 projects ongoing with over 6 gigawatts of capacity under construction. In terms of PPAs, where we rank among the global leaders, we signed 4.3 gigawatts in 2024. Again, that was a record, the large majority of which with a duration above 5 years and some stretching actually to more than 20 years. We'll be saying a bit more on this later in the presentation. Turning to this next slide. 2024 was really the year where we attended a position of true scale in batteries following a 2023 breakthrough when we acquired Broad Reach Power in the United States. because we doubled our capacity in operation to 2.6 gigawatts, and now we have a further 2.6 gigawatts under construction. We have actually a presence not just in the U.S., but a global presence encompassing all types of markets from the shorter duration ancillary based in Texas to the longer duration storage in Latin America. We have a few highlights on the slide with strong delivery by BRP of their projects that were under construction when we acquired them. We had the start-up of Coya that is a co-located storage system. And then the construction of 200 megawatts of Vilvoorde project, one of the largest in Europe with 4 hours storage duration, and that is in Belgium. And on nuclear, the Europe Commission -- European Commission gave us last week its approval to the terms of the agreement signed by Engie and the Belgian government. This was the final condition for the completion of the transaction. Closing is now underway. We are expecting it to take place by March 14. Once this is achieved, we'll make the first payment to the Belgian government of about EUR 11.5 billion, and that will correspond to the category B and C waste. From late this year, and nuclear activity will be smaller. It will be stable. It will be based on a partnership with the Belgian government and a quasi-regulated strike price mechanism. In addition, the nuclear deal upgrades the overall efficiency and optionality of our global group asset portfolio. On that very positive note, I'm going to hand over to Pierre-Francois for a financial review of 2024.

Thank you very much, Catherine, and good afternoon all of you. I'm very pleased, of course, to present this strong set of numbers. I'm not going to repeat the numbers that Catherine went just through, and these are exactly the same. So I suggest that we go straight into the numbers and move to the next slide, where I think in one glance, you can capture basically what happened in '24 and see what is behind the decrease of EUR 0.5 billion of EBIT year-on-year. And I think clearly, you can see on the left side, the prices and volatility, which impacts us by about EUR 1.3 billion, which is coming mainly -- the impact is mainly on GEMS. Volumes are up close to EUR 300 million, and that reflects mainly the hydrology that we had in Europe. It has been raining a lot. Commissioning is a positive impact of nearly EUR 500 million. That's a very impressive number, very important for us, mostly renewable assets, which are coming online, EUR 355 million as well as investments made in networks and also Energy Solutions. Performance adds an extra EUR 231 million EBIT to the EBIT variation. So that's in one glance, the key story of '24. Now let's be a bit more granular and enter into the variation per business. And starting with EBIT for renewables. which stands at EUR 2.2 billion. It's now plus 10% year-on-year with almost half of it coming from wind and solar. FX impact on EBIT is minus EUR 58 million, mainly related to the depreciation, of course, of the Brazilian reals, but more than offset by the scope contribution, which is a positive of EUR 108 million with some tuck-in acquisition that we completed actually in South Africa, South America and in Europe. Therefore, organic growth is plus 7%. You will recognize the same positive drivers mentioned during our 9 months presentation. Volumes are up by EUR 315 million, exceptional hydro conditions in France and Portugal. New caps that were commissioned, I mentioned the EUR 355 million, which is another proof point of our strategy in renewables, bringing tangible results. and then performance, which is adding another EUR 71 million. We did face some headwinds with lower prices and also higher hydro tax in France, partly offsetting higher hydro volumes I referring to. We had also in others, some positive one-offs in LatAm and Europe in '23, which turned negative one-off in '24 and also reduced tax equity and DBSO contribution as well. As you can see, we delivered robust organic growth compared to a challenging comparison basis in '23 and the capacities that we are adding is a major contributor to this performance. For Networks, EBIT is up EUR 326 million organically. It's a 15% increase, mainly driven by GRDF new tariff, which includes clawback on previous years. We have also benefited from a colder winter. This year, we achieved significant milestones with the sell-down 2 gas networks, 15% of TAG in Brazil and 50% of Mayakan in Mexico. And also with the auctions won in Brazil and Peru for power networks. I won't comment in detail on each block of the bridge, but it is worth to mention international expansion with plus EUR 63 million in gas networks and plus EUR 45 million in power networks. And this is a result of increased performance of our gas assets in Latin America and in power assets, tariff increase and indexations in Chile and organic growth in Brazil. Power Networks now represent 8% of the EBIT of the GBU. Energy Solutions EBIT stands at EUR 356 million, which is a 3% organic decrease. Positive impact from performance, plus EUR 60 million and also commissioning plus EUR 30 million were offset by lower energy prices in France and in Germany and by lower DBSO margins in North America. I'm not going to talk again about the one-offs of our U.S. contracts, which I already discussed in details during the Q3 results. We are monitoring the situation with all due attention and remediation plans are progressing as planned. Excluding one-offs, EBIT margin stable at 5.3% despite less favorable energy prices in Europe. We will be moving into another level of control and focus with our new setup from '25. EBIT from Flex Gen amounts to EUR 1.5 billion, supported by high pure spreads in Europe. It is another year of record high profits. Key messages are pretty simple. In France, we paid higher intramarginal tax. This tax ended in December '24, but so the very good spreads we had locked in. In Europe, we've seen a further decrease of load factors down to 17.5% from 21.6% a year ago, but that was compensated by high capture spreads locked in '22 and '23 and increased volatility induced by the growing share of intermittent energy in the power mix. Eventually, internationally, Pile benefited from lower sourcing prices. Our battery development in the U.S. is going according to plan, both in capacities and in pricing. Looking at retail, EBIT amounted to EUR 695 million. Organically, EBIT grew by 22%, mainly driven by nonrecurring timing impacts in '24 related to sourcing and tariff shield. You can expect about half of this effect to be reversed next year. Impact from prices are quite limited and includes discounts granted to customers and previous clients in France. Volumes were slightly positive with a colder winter and better hedging protection, partly offset by clients writing. Performance is negative due to loss-making activities in services and related to energy supply that we will divest or wind down in '25 and '26. All in all, an excellent year also boosted by nonrecurring timing effect. Let's transition to our nuclear activity. EBIT stands at EUR 1.4 billion, EUR 843 million increase versus previous year coming from the end of the intramarginal tax in Belgium on June '23. You can see in the bridge that Belgian nuclear tax and marginal tax had a positive impact of EUR 700 million on year-on-year EBIT variance, consistent with our H1 presentation. EBIT also benefited from higher capture prices at plus EUR 340 million with hedged positions contracted in '22 and '23 when energy markets were supportive. Volumes, a negative EUR 152 million results from lower availability in Belgium and the extended 2-month shutdown of Doel 4 in Q4. When it comes to other activities, EBIT decreased by EUR 1 billion. This is solely driven by GEMS, which benefited from exceptional market conditions in '23, while '24 was a year of normalization with lower energy prices and more importantly, lower volatility. We have landed '24 in line with expectation with an EBIT at EUR 2.4 billion for GEMS, underpinned by the nonrecurring reversal of market reserves for EUR 0.5 billion related to the normalization of energy market conditions. Other activities are up EUR 126 million due to improvements in noncore operations, including EV Box. Let's now be a bit more granular on GEMS. We present here the details by activity, geography and commodity that we started to communicate last year. Client risk management and supply is taking a bigger share as expected with market conditions normalizing. It now represents 45% of total EBIT. This part is less subject to market variations. We are pleased with the activity over the last quarters that gives visibility to 2025 earnings and beyond. No significant evolution on commodity split. Repetition is balanced and in line with Engie's portfolio. GEM is growing outside Europe with the U.S. and new franchises, for example, India. GEMS is more and more involved in optimizing our battery portfolio with 50% of our U.S. fleet hedged on '25-'29. Turning now to performance. Our continuous action to improve performance contributed to EUR 231 million in EBIT, beating our target by 15%. Main contributor was operational excellence with many actions ranging from contract renegotiation to asset optimization and HQ reorganization. We continue to see a sustainable momentum on that stream. While turnaround plan is on track for EV Box, we have taken some hits in a limited number of well-identified situation, which are turning the net contribution negative from 1 year to the other. There is room for improvement in some businesses inherited from the past. We are fully committed to fix or exit all loss-making activities. Let's now go down from EBIT to net income. Net financial expenses improved by EUR 100 million. Higher cost of gross debt average rate has been increasing from 4.3% to 4.6% was offset by strong cash generation early in the year and better cash remuneration supported by high short-term interest rates. A flattish interest rate curve is definitely helpful since we are significantly long cash. Income tax increased by about EUR 100 million, consistent with the increase of our profit before tax. And the effective tax rate stands at 27.6%, quite stable versus last year, and it does include prudent provisioning in some jurisdictions. As a result, net recurring income group share is up EUR 200 million at EUR 5.5 billion. And looking at main nonrecurring items, impairments are about EUR 700 million, a collection of midsized items, including EV Box in H1 and other ongoing disposal processes. We also recorded an impairment on our U.S. offshore assets for a bit more than EUR 100 million to account for a 4-year time lag in their development following the executive order issued on January 20. In restructuring costs for about EUR 400 million, you will find mostly EV Box and some restructuring initiatives in several Energy Solutions businesses. Let's look at cash flows. Cash flow from operation is stable year-on-year at a very high level, EUR 13.1 billion. Operating cash flows were strong, also EUR 1.3 billion lower than last year. As mentioned in our latest call, it does include reclassification elements between operating cash flows and change in working cap, in particular, to better track the variations of margin calls. Change in working cap is a positive EUR 0.8 billion on CFFO versus last year with evolution that are very similar to those mentioned in our latest financial presentation. So I'm not going to comment on them. What is maybe important to get is that the working cap level is now normalized, and we have recovered most, if not all, what was injected during the crisis in '22, '23. Let's move to net debt. Net financial debt increased from EUR 29.5 billion to EUR 33.2 billion, mainly due to the funding of nuclear obligations. Significant CapEx and high level of dividends paid in '24 were almost entirely funded by CFFO. Economic net debt is increasing as well, but to a lesser extent. Leverage ratios are quite stable and remain strong with net financial debt to EBITDA at 2.1x and economic net debt to EBITDA at 3.1x, well below our 4x threshold. This is it for '24 and starting our presentation on our medium-term outlook, we are now opening the floor for questions on our full year '24 performance.

So we'll now have a short 15-minute Q&A session before continuing to the market update presentation. So please, can I ask you to keep your questions just to 2024 results, as there will be plenty of time later on for questions on the market update. And if you don't mind limiting your questions to one or two only. So we'll start by taking questions from the room, and then we'll take some questions from online. Operator, could you please remind our online participants the process for taking a question.

Thank you. This is the conference operator. We will now begin the question-and-answer session. [Operator Instructions].

Thank you. So we will start maybe by the room, Harry?

It's Harry Wyburd from Exane. So I'll keep it just to one because I presume I can ask some other ones later. This is quite a boring one, but I think it's quite important given that finance costs are a big source of some of the upgrades that you made this morning. So you mentioned that the sort of inversion or previous inversion of the yield curve is good for you because you're long cash. but that's actually been disinvverting in the last few months. So short rates have gone down, long rates have stayed high. Is the guidance you just gave on interest, which is pretty important, still valid at current short-term interest rates? Or is it sort of mark-to-market and you're comfortable that you can still deliver on that new finance cost guidance?

Yes. Yes. I think that clearly, when we took the stance -- it was a year ago and then we gave the guidance on '24, but also '25, '26. I'm not going to go to '25, '26, but just to stick on '24, it's clear that a year ago, we -- and based also on the forward, we had the view that the short-term interest rates will come down pretty early in the year and why the long-term interest rates would be higher. So what does it mean for us? It means that -- and you may remember that in '24, we went to the market with a significant amount of bond issue. much more than what we have to do in '25 and more than double actually in '24. So we have been factoring in our forecast that we will issue debt at a pretty significant cost, while at the same time, we will be investing our cash, which is significant at a much lower rate. Now it turned out to be different. First, it turned out that the interest rates -- short-term rates actually stood higher for longer. And at the same time, we have been cashing. You remember, our Q1, Q2 were very strong on cash, and it came due to the sharp decrease of prices at those days. You remember in February, I mean, in the early part of the year, the energy prices went down. So we cashed in a lot on the back of this. And therefore, we ended up with a strong cash position earlier in the year with rates being better in the short term. So it has been helping us in '24 very significantly. Now the view that -- moving to the future, but the view that we are taking is that we expect curve, which would be less backwarded than the one that we had in mind, and therefore, that would help us. Probably the view that we had a year ago was very conservative in terms of curve.

Another question from the room? Zach?

This is a question on retail really. So I think earlier in the year, you mentioned that first half and second half, your retail EBIT would be kind of evenly split. Just I think in your fourth quarter, you basically delivered more than I think what the market was expecting. Could you just give us some color on the source of this outperformance? And is it like a one-off kind of thing? Or any kind of color you can give would be helpful.

So it's a tricky one, and I don't want to dig into too much in details. But what you need to realize is that in retail in most of our markets, -- we have what we call campaigns, which are usually 1 year or 2 years. So you lock basically the price and you sell on that campaign. The point is that people are not buying their energy on the 1st of Jan. They tend to enter into contracts all year through. So we have 12 campaigns actually, which means that we have -- as you can imagine, we have a cross year effect in our sales. In the same way, we are sourcing our product. And we are not, as you can imagine, sourcing back to back to each and every contract. We manage the portfolio. So that means that our sourcing is also depending on the calendar year. And you know that in the energy market, calendar is very important when it comes to hedge. So when we are selling, we are also hedging based on calendar. If you add up that in France, there is a specific, which is a big market for us, which is the [ RN ]. And the RN is also calendar. And so that's -- it means that we have a misfit, a natural misfit over time. It's not an economic miss, but when you represent the financial result in 1 year, you have campaigns which are in cross year, when you have a sourcing, which is more calendar. So you have -- between the years, you have significant effect. And we mentioned that in '23, it was not in the right direction. In '24, we are significantly help, and we expect part of it to reverse actually in '25. So we'll have less of a good impact, of course, in '25. Long story short, there is definitely a one-timer, I think well represented in the graph, and we have been as transparent as we could be about this timing difference that you need, of course, to narrow. So you're better off to look at a 3-year average in retail that gives you a better view of what is the momentum. It's not a one-off as such. It's more a timing.

Ajay Patel from Goldman Sachs. I'm going to ask you to do my job for me a little bit. If you look at '24, could you just list the one-offs that we need to take off when we're doing our bridges into next year? So what were just items that we maybe need to extract to normalize for? And then the second one is, could you maybe give us a little bit more granularity to GEMS in the sense that how much of that business -- I know you highlighted the client activities, but how much of that business was dependent on the absolute power price or gas price at a given point in time as in just -- because I get asked that question a lot, it would be helpful just to maybe if you can unpack it a little bit more than you have, that would be helpful.

Yes. On the one-off, we had positive one-off in H1. We had negative one-off in H2. So if you take the year as a whole, forget about the one-off. I think that's a fair way. So -- and of course, next year because, of course, you will be looking at every quarter, you will find that. And you should see some of this one-off, which were positive in H1 and definitely a negative in H2. And we announced that. And you remember, we mentioned that during Q3 call, we were expecting some negative one-off. Even in Q4, we knew it was coming. So that's, I would say, overall in the year, you should look at it as not significantly impacted by one-off. Now, Ajay, on power and gas prices, I think that -- and we have been advocating that for a while. First, we are not a gas producer. We hedge at inception. That's very important. So we never take an open position because we sell at a fixed price and with different price. We don't do that. We really hedge at inception. Now that being said, first, there is a commercial margin embedded into this business, especially the B2B part, is a commercial margin. there is some sensitivity to absolute level because if you are selling a megawatt at EUR 200 or if you are selling at EUR 50, the commercial margin that you can pass is not exactly the same. But still, it's not very significant. That's not a key point. But there is an exposure, so I want to be complete. So there it is there. Then there is another point, which is that a lot of the value on the energy management part is based on the arbitrage and it can be about the bid-ask. It can be about the discrepancies that you have in the market, the spread that you have in the delivery points for us, the spreads that you have between countries in power. And of course, I would say that the absolute price does also indicate something. But what is even more important is really the value of the spread, really the value of the volatility. I think that by far, the bigger -- much bigger driver than the absolute level of price. And that's why despite lower prices, we are still comfortable with strong earnings coming from GEMS, and we will discuss that, I'm sure, in a moment when we look forward. And we are also comfortable because even if we see a very sharp decline in prices, we have this ability to capture another stream of value, which is on volatility.

So we'll now take some questions online. Operator, could you please start with the first question?

[Operator Instructions]. The next question is from Louis Boujard, ODDO.

Congratulation of good results. Maybe just one question to focus on 2024 on the networks. I was wondering if you could provide a little bit more granularity regarding and not -- performance specifically during this year. In particular, you were expected to have some positive impacts from the new tariffs. But at the same time, this transit effect, which has been negative. Could we have some elements in terms of level that in boxes that offset each other? It could be nice for the forecast as well. And then still in the network, if possible, on Storengy, how do you see this evolving more particularly with regards to the topic regarding the maximum level of Swiss in terms of total volumes that would be eventually lowered going forward for -- in France in particular?

We didn't -- Louis, you have to repeat the second question because we couldn't hear you very well. I was not -- is it a question about whether we can clear up the volumes because of the...

Sorry. The second question was about Storengy, which has been impacted by lower volatility this year. And also if you could provide a bit more elements regarding the sensitivity of this business to the maximum level in France that would eventually be going forward in terms of storage.

Yes, I'm not sure I completely understood. I think it's fair to say that we are looking carefully at the filling campaign for this summer. They started a little bit later than usual, but -- we believe that the market and the spreads are improving, and therefore, we will be in good situation to fill the storage as expected. What I think is important is that we meet the 80% at the beginning of next winter. And at this stage, we think that the signals will allow us to do that eventually, albeit a little bit slower and later than normally. I think the key, as you know, will be then, obviously, LNG continue to be imported in Europe and allowing us to fill both the -- obviously, to continue to fill this summer, but also to pass a good winter and to have a good storage capacity at the end of the winter '25, '26. So situation is improving, and I hope that was the question because we couldn't hear you very well.

And same for Q1, but I think I got the sense of what you were asking on the variation of results for networks. So maybe not entering too much in details, but we can -- of course, we can dig in with the IR team offline. But what is key is that indeed, there is a clawback process in the French regulation for gas because the tariffs are actually set based on projected costs and also projected volumes. And there is a way that you can actually modify incrementally the tariffs [indiscernible] the K factor, but it is capped, and it was capped in the previous regulation, the previous 4-year period at 2%. So what happened is that when you have the volumes dropping a lot, and that's what happened, of course, on the back of the crisis in '22, '23, where there was a lot of demand destructions. What happens that the volumes, the actual volumes were significantly lower than the projected volumes, which created indeed an underperformance in GRDF and our numbers were significantly lower than what they should have been should we have achieved the projected volumes. And that's what is indeed finding a kind of regularization account, which is creating the clawback. So what is it? It's an amount that was not cashed in and not invoiced during the initial period, could not be actually compounded by the K factor that was too small, and that creates a kind of receivable, I would say it's not in the balance sheet, but that's the kind of credit that we have and is actually embedded in the new regulation of the tariff. So for the following period, the tariff is actually increased to make sure that based on the new projected volumes, the operator can catch up with what was not earned during the previous period. And this total amount for GRDF that was missing was EUR 900 million. So this EUR 900 million are now spread over the new 4-year period. And in the tariff increase that we got, part of this tariff is back so that we can actually get back this money over the 4 years period. And that's why indeed, revenues are sharply increasing a year to the other because now we have recovering money that was due from the previous 4 years. I hope it's simple enough. So you can work out the numbers, EUR 900 million on 4 years. So more or less, it gives you ballpark the magnitude of the clawback. -- based, of course, on the volumes that are projected in the new tariff.

And that's why we like to say that we have, in France, a strong regulation.

So we'll end the full year results Q&A here. Thank you for your questions. And I would like to hand over to Catherine for our market updates.

All right. So hello again, everyone. I am now going to kick off our market update section joined by Paulo and Pierre-Francois. But first, let us look back at what we have achieved over the past 4 years because I don't think it is an exaggeration to state that Engie has completely transformed itself over that period. We have invested EUR 25 billion on our strategic priorities. Half of this investment has been funded, thanks to an active disposal program of EUR 12 billion over the period, which has been covering pretty much the four continents where we operate each of our business units. We have added 15 gigawatts of new capacity in renewables, and we have more than doubled our combined wind and solar capacity. We have made a pivotal and decisive move into the battery world. We were nowhere in battery just a couple of years ago. All this expansion with outstanding execution, both in terms of schedule and budget. We have also expanded in power networks to complement our existing strong position in highly cash-generative gas networks. We just discussed them. And we have achieved commercial success capitalizing on our energy management expertise, and you can see that in the results of our [ PA ] position, where we have today a portfolio of 14 gigawatts. We have also worked on our organization. We have simplified it. We have reorganized around four global business units back in 2021. We are really working to bring a more centralized industrial and less decentralized conglomerate-like structure that is making us far more effective as a group with over EUR 900 million of efficiency gains over the last 4 years. And you can see the result of all these efforts into our numbers. I think the graph on the right-hand side speaks for itself. We have actually doubled our annual net income from the EUR 2.5 billion level during the period of 2016 and 2021 to the EUR 5 billion plus average of the last 3 years from '22 to '24. We have rewarded our shareholders with over EUR 10 billion in dividends, and we have achieved a total shareholder return of no less than 64% in the period '21 to '24. At the same time, we have derisked and transformed the makeup of our earnings. because 40% of the earnings back in 2016 came from E&P, LNG, coal and Belgian nuclear merchant, all of which will have been either stopped or sold by 2027. Meanwhile, our balance sheet headroom has improved markedly with a ratio of net debt to EBITDA down from 4.0x to 3.1x between '21 and '24. And I have to add the nuclear deal, which we worked alongside all these achievements that represents indeed a major derisking step for our group. The biggest achievement of all in our mind when we talk between us here at Engie is that we feel that we have turned Engie into one single team, super focused on business, all about business. with obviously incredible skills, expertise, motivation, strong alignment with the company's purpose always and also self-confidence. But I can guarantee you there is not one ounce of complacency among Engie team members. So what now? Obviously, in the highly dynamic context, I think that's an understatement that we are all facing, it is really important to reaffirm a few convictions. Our view Engie is that there are structural engines to the energy transition. These engines they include power demand. They include the need for affordability. They include sovereignty. They include, of course, climate considerations. Electricity demand because it is set to rise faster over the coming years, which is going to be based on economic growth, on decarbonization and the rapid development of sectors such as cloud, AI, crypto, EV, et cetera. Affordability, undisputably another factor for the energy transition all the more in Europe because renewables are now cheaper. It is a fact. And with the right combination of storage, flexible backup, efficiency grid, there is a path towards bringing low-carbon power that is affordable. The third key driver is sovereignty. It is the drive for homegrown, homegrown electrons, homegrown molecules. It removes the dependency of our countries of the country we operate on outside influences when it comes to feedstock supply and also pricing. This means obviously, expansion in renewables, but also making use of whatever local resources you can find, which is why we are so excited about the potential in biomethane in France and in Europe. And of course, the fourth driver, bringing momentum for cleaner energy is definitely climate as a vast majority of countries, governments, corporation and citizens still see the fight against climate change as a critical agenda item. And we have three convictions still, as you know them very well. The first is that there is a wave of electrification but the gas has a crucial complementary role. So I'm not a big poetry or I'm not a big poet, but I would say electrification is on its way, molecules are here to stay. That's what we like to say at Engie, and this is the poet in me. Second of our conviction, flexibility in all its forms is needed to underpin the resiliency of the infrastructure and to adapt to the greater complexity of a more renewables-led power market The third of our conviction is that electrification will require massive power grid strengthening, but this investment will obviously need to be made very wisely given the affordability and the acceptability constraints that this big infrastructure build-out represents. So given this context, what does that mean for Engie? We want Engie to be role modeling the most affordable and secure energy transition, and we have what it takes. In fact, we have this realistic ambition to be simply the best energy transition utility. And what do we mean by that? We mean that we are going to rely on some key differentiators, and we have some. Sometimes people ask us, what is so special about Engie? Well, first, we have the right business and geographical mix. We have a business mix which starts with an incredible portfolio of assets, assets that are fit for purpose, especially given the convictions that I have just laid out. And we have, for this asset, unrivaled energy management capabilities. We also have a geographical balance. That geographical balance gives us optionalities. As you can see, market shifts do occur every so often. The second, the best utility has to include the share of highly regulated and predictable assets, and we have exactly that in the form of our gas networks in France, which are very highly cash generative and contribute to our growth investment. In our mind, being the best utility also means that we have to have a very strict discipline in our capital allocation decisions with a strong focus on performance. We are not going to accept low productivity or bureaucracy. You will notice, in fact, that we are going to double the pace of our performance target for '25 to '27. And third, people and expertise. As CEO of Engie, you can imagine I get all the motivation from my 98,000 colleagues who themselves are so committed to get up and every day make the transition happen. And I would like to take a second to thank every one of them today for their unswerving efforts -- because I'd like to say this is my little bragging moment at Engie, we simply have the best people in the industry. So to support this ambition, we are making changes to our organization. We are evolving the makeup of our global business unit for three reasons. We want to be in the best possible position to capture the opportunities that we see in the market, particularly to advance this ambition that we have to be one of the first to offer 24/7 carbon-free electricity to all of our customers as well as to expand in power networks. The second reason is that we want to further strengthen our industrial dimension and unlock synergies, particularly in the renewable and battery space. And third, which is a well-known bugbear of mind to continue to simplify our organization and our processes. As you can see, we start from a position of strength. If I look at the new renewables and Flex Power, which is led by Paulo here, it combines 102 gigawatt of power generation capacity with scale in renewables in co-located batteries, in stand-alone batteries in pump storage and gas-fired generation. The Networks global business unit comprises EUR 32 billion of in French gas and EUR 5 billion of capital employed in power and gas networks overseas. Local energy infrastructure, new name for Energy Solution is a leader in district heating and cooling with close to 350 urban networks under Engie options. The new Supply and Energy Management global business unit brings together energy management and our two downstream activities, B2B, which was the S in GEMS and B2C, which is our retail business. Those two total to more than 500 terawatt hours of energy supply a year. And finally, we have moved from, remember, the 25 business unit back in 2019 to 4 global business units, and we are further simplifying under three reporting segments from now on, which are shown from left to right. Over recent years, we have aggressively ramped up our competencies in data, digital and AI. Today, obviously, they play a fundamental role from the top to the bottom in our industrial processes. And given the complexity of our market, it's essential for us to keep up the pace. So for instance, we put the vast majority of data in the cloud. We have 80% at the end of 2027, and we want to more than triple the amount of near real-time data collected by that same date. And how to create value from this, there are many, many ways. So I just picked one example, which is within the asset optimization world where forecasting energy supply and is very important. So we're doing it as accurately as possible. It is important because it allows us to optimize production to match client needs and ultimately, to ensure that energy systems are balanced. It requires processing a lot of data from a variety of sources, all kind of sources, including weather data. But in a very, very short time frame, -- so what we do is that we continuously reinforce our forecasting capabilities, obviously, using AI, which means that last year in 2024, our control desk were able to save in the high teens of millions of euros in the pilot projects. So obviously, we're working to scale up this for even more impact. Stay tuned on this. And we are making sure that every business, every support function today at Engie is progressing alongside its data and digital road map to make sure we have business impact, but also that we are contributing to the performance plan that Pierre-Francois is going to elaborate on. I'm going to now turn to our climate strategy as decarbonization remains a key consideration behind all of our decisions. Today, we are announcing a new objective for total Scope 1, 2 and 3 greenhouse gas emissions. We are targeting a range of 120 million to 140 million tonnes in 2030, which implies a 55% decrease from 2017, which is the last year. It's an improved ambition, which is really the result of the good progress that we have made already in reducing our emissions to date. We are also, of course, extending our climate strategy to climate adaptation, which means at the asset level, we have and working on detailed plans for every -- every site, which is subject to climate risk at the portfolio level, more resiliency that can be achieved through a more diversified asset mix, both in terms of technology and geography. These targets will be voted on via consultative say on climate at the AGM at the end of April. And we are very encouraged by the progress that we've made on this ESG criteria because they have been very carefully chosen to be fully in line with our performance requirements. They are meaningful to the business, to our value creation and they ultimately guaranteeing the sustainability of the company on all dimensions, including economically and in a way, future-proofing our group. So what are key 2030 operational targets? Well, we aim for 95 gigawatts of renewables and storage, which is compared to a position of 51 gigawatts today, an average of 7 gigawatts of additional capacity per year. You will see that for this target, we no longer split up renewables and batteries targets as they are benefiting from strong pipelines in both. And we want to keep the optionality depending on what opportunity will bring us the most attractive returns as well as will play a more important role in our asset portfolio. And outside generation, we target a near doubling of power transmission lines in operation, a near quadrupling of biomethane capacity connected to our gas grid in France and a 40% rise in B2B and B2C power sales. So with these growth targets, we are obviously determined to deliver even more value to our shareholders over the coming years. So despite lower energy forward prices compared to what we showed you last year, I'm pleased indeed that we are raising our guidance for net recurring income group share for 2025, and we are improving our outlook for 2026. We provide our first guidance for 2027, and this will rely on a mid-single-digit year-on-year rise. This is result in a mid-single-digit year-on-year rise. And as a result of our investment plan and the Belgian deal, very importantly, from the start of 2026, we become more stable, more utility-like in terms of our earnings mix and trajectory. We are cutting our exposure to open market power prices. And in batteries, we aim for half of the revenues over the first 5 years to be contracted. Potential benefits, of course, from market volatility and high prices, such as what we see in Trade movements in Europe, in Texas from higher attrition of renewables. This, to a large extent, becomes a bit like icing on the cake. On the back of a stable, steadier earnings mix from 2026, we are proposing to increase the dividend from EUR 0.65 to EUR 1.10 while maintaining our 65% to 75% payout range. With that, I'm going to turn over to Paulo Almirante for a deep dive on our renewables and Flex Power Global business unit. Thank you.

Good afternoon, everyone. After talking about the dividend policy, I think my presentation is not going to raise any interest. Anyway, the new global business unit, flexible renewable and Flex Power, as mentioned by Catherine, is bringing together all our upstream power assets, a significant installed capacity or around 100 gigawatts, which 50% is green power and 50% is gas generation. These assets are well distributed geographically, which brings diversity of business models and diversity of regulatory framework. 1/3 in Europe, 1/3 in EMEA and 1/3 in the Americas. In these regions, we focus in each of them in three key countries. In Europe, France, Spain and the U.K., in EMEA, India, South Africa and Australia and in the Americas, Brazil, Chile and the U.S. This new GBU represents around 40% of the group EBIT in 2024 and aggregates 9,000 employees, maximizing synergies from BD to operations. For example, optimizing BD teams, optimizing land leases or benefiting from economies of scale when using common suppliers. One important element is that by combining renewables with batteries, we can offer our clients 24/7 green power. When we add gas generation, we can ensure security of supply with low CO2 impact. Let's have a look at our pipeline. At the end of '24, we have reached 115 gigawatts of renewable and batteries pipeline. As you know, there is no growth without pipeline. And there is no value creation without a quality pipeline. At Engie, we have a solid and competitive pipeline developed by BD teams, well established in our key countries and that with the coordination of a central team, which pilots, devs, monitors, time to market and prioritizes projects based on value creation, they can create this level of pipeline and prepare ourselves for new projects as we go along. When you look at the graphs, you can see that about 60% of the pipeline is secured or is in advanced development. 40% is wind and 40% is solar with batteries accounting now around 20 gigawatts of that pipeline. This is a significant growth from almost nothing just a couple of years ago. In terms of geographical footprint, this pipeline is well diversified, which gives us flexibility to choose the projects where demand and markets are more attractive. For example, if the slowdown in growth in the U.S., we have enough pipeline to redirect investments to other regions. The target for '25 is 50 gigawatts of renewables as announced in 2021, and we are on track to achieve that. When we combine all technologies, we should achieve 57 gigawatts. And if we apply a cover ratio of 2.4x to our pipeline, we can add 38 gigawatts over the next 5 years, bringing our installed capacity of renewables and storage to 95 gigawatts by 2030. This becomes our new target, all renewable and storage capacities combined. Well, it's important now that we are entering into a new phase to look at our track record in the last 4 years. As you can see in the slide, between 2020 and 2023, we invested EUR 12 billion of CapEx in renewables and batteries, and this is mainly through organic development. This resulted in a significant increase of capacity of 14 gigawatts and a strong contribution to earnings with EBIT of EUR 1 billion in 2024. That demonstrates that our growth is about profitable megawatts. In the center of the slide, you can see project IRRs for a representative sample of investments. Most projects achieve an IRR of 7% to 11%, and the average has increased by 50 basis points in '24. This is a result of applying strict investment criteria, a nice level of execution performance and the business model with a contracted profile of around 70%. We have almost forgotten the challenges that we have faced in recent years with supply chain disruptions CapEx inflation, political turmoil. Despite all that, we were able to deliver growth and value creation. And we will continue to face challenges going forward, negative prices, curtailment and once again, political turmoil. But our teams are well prepared, experienced. They are based on robust processes and growing with digital tools that can support this level of deployment. As Catherine mentioned, execution on time and on budget. So we have the confidence to deliver on these targets by 2030. And one thing we are sure, renewables will continue to grow. This is the only technology that can be deployed at scale and with a competitive price. However, renewables are intermittent and intermittency brings volatility to the markets. What you see in this slide are a few examples, ERCOT in the U.S., France and Belgium, which clearly show a structural increase on the volatility of daily prices. This is caused by excess of solar generation during the day, bringing prices down or to negative levels and also the variability of wind, which can create significant price spikes during the day. The only response to this kind of problems are flexible assets, mainly batteries or gas generation. Another factor of intermittency is that it is changing the way gas assets are remunerated. And this is illustrated on the right side of the slide for our European fleet. You can see load factors are reducing by half. However, whilst the capture spark spread is not flat, is increasing massively, more than double, which is the contrary to the load factor that you see on that slide. Another important element, of course, that you see on the bars is that EBIT is reducing. However, it stays well above the precrisis level. So the new driver for remunerating gas assets is mainly volatility. On the lower side of the slide, we want to show that flexible assets provide value to all stakeholders across the value chain. They can support the grid and benefit from CRM capacity remuneration. They can participate in the intraday markets, benefiting from balancing services or they can capture a premium from customers to enable baseload green power. So let's have a more detailed look at our gas fleet. The international fleet, around 36 gigawatts in LatAm and EMEA is mainly contracted under long-term PPAs with a remaining life of 8 to 10 years. In LatAm, we do have some market exposure, which we hedge with our downstream portfolio. You are aware, in recent months, we announced the sale of assets in markets like Singapore, Kuwait or Bahrain. These divestments allow us to align with the CO2 trajectory of the group and with the geographical strategy. This fleet contributed with around 60% of the gas generation EBIT in 2024. On the lower side of the slide, we have the European fleet, around 15 gigawatts with a business model which is more exposed to the market. On one side, the need for security of supply allow us to capture good margins on the hedging, and on the other side, rebalancing allow us to capture price spikes with the open positions. So globally, we have a performing fleet that contributes with strong earnings and offer good visibility. Going forward, we can expect an EBIT contribution of EUR 0.6 billion to EUR 1 billion per year. Let's look at batteries now. There are two major needs in the sector today, balancing the intermittence of renewables to stabilize the system and strong demand for 24/7 green power. In other words, to move from as generated to as consumed PPAs. The only industrial solution that can be deployed at scale are batteries to resolve these two issues. Engie was, in fact, the first mover on this market. And as mentioned by Catherine, with the acquisition of Broad Power in 2023, we are now able to have 5 gigawatts of assets in operation or under construction. We expect a significant growth of this market and of Engie with an increase of negative hours across all the markets where we have a presence and a significant decrease in the cost of batteries by more than 30% since 2023. In addition, we can benefit from colocation, not only in terms of costs, but mainly in terms of time to market with faster access to permits with faster access to the grid. However, there is an important element to reveal. Capturing the revenues of batteries is not simple. It requires sophisticated systems and strong skills, which we have with our energy management teams, and we believe it is a competitive advantage for this specific market. Typically, we target to secure 50% to 70% of the battery revenues. And for '27, we have already secured more than 50% of the batteries that are in operation. So here, our plan is to invest EUR 5 billion of gross CapEx and achieve around EUR 0.4 billion of EBIT contribution by 2027. So to conclude, we are starting a new phase with a new objective to achieve 95 gigawatts of installed capacity by 2030. We are well prepared to execute the plan and deliver growth with value creation as we have been doing since 2021. With that, I hand over back to Catherine.

Thank you, Paulo. I will cover now very briefly the other three GBUs, and then we will have a break, a short break. So I'm going to start with the supply and energy management GBU, which is going to be instrumental to our 24/7 decarbonized power ambition. This GBU has an unrivaled energy and risk management know-how, coupled with a very strong commercial franchise. The B2B, which is on the left-hand side, we obviously supply gas and power to around 200 energy-intensive multisite clients and other 200,000 nonresidential users. With contracts of average 2 years duration, this business gives us strong visibility with about 80% of the margin that is locked in at of the year. We also run within B2B, the largest global risk management franchise amongst the utilities. We support 800 large customers. And obviously, these services tend to become more valuable, especially after what has happened with the energy crisis in Europe. Through Engie 1 B2C, we serve more than 20 million contracts. We are recognized as a low-carbon supplier with 76% of our electricity volumes sold through green offers. And for both of these businesses, we have this ambition to increase our power sales by 40% up to 300 terawatt hours by 2030. And finally, energy management, which is GEMS, ex GEMS without the S. Energy Management leverages and extracts value from our portfolio of assets, whether it's generation assets, whether it's storage assets, but also the sourcing contract we have in our portfolio, we consider them as assets. And it also manages procurement for our B2B and B2C businesses, optimizing our position accordingly, the heart of the integrated model of Engie. And as mentioned earlier, we are amongst the largest corporate PPA provider. I repeat, we have a capacity of 14 gigawatts in our portfolio. In 2024, almost half of the 4.3 gigawatt that we signed were with data centers. So no surprise, growth is expected. We target actually by 2030, annual PPA volumes to be over 100 terawatt hours, which would be a tenfold rise versus 2020. Obviously, the energy transition makes it more challenging for large users to get the power they want as they decarbonize. Increasingly, they are asking us to provide power when they want it, not just when we produce it, very similarly to Paulo was saying. And we've tried to illustrate with this pyramid how a PPA becomes more sophisticated as we start from a base of local renewables production that can be provided via a so-called as pro contract. So at the base of the pyramid, you have the as-produced simple PPAs. And then you move up the pyramid, you top up with the whole toolbox of storage of flexible solutions of also green market access. Each additional element add complexity and therefore, adds value to the overall product. And we are determined to provide full carbon-free power to our customers. This is why we have a target of 20%. This is an ambition that we have set for Edouard and his team and the whole energy actually because we are all contributing to this target that we want to be at 20% of our PPA volumes being 24/7 carbon-free by 2030. Moving on now to our network business, which is going to be key in contributing to our asset balance and energy mix and the role of utility that I described earlier, networks providing this predictability, this long-term cash flow that we have mentioned earlier. Our regulated gas assets and they have a regulatory asset base of EUR 32 billion. They have at least 3 years remaining in the current regulatory period. Revenues are largely immune to inflation and volumes variation as they are clawback mechanism, and actually we discussed that in the first section. And they are substantial generators of cash flow because as you can see, we expect for those assets, a free cash flow generation of EUR 8 billion for the period '25 to '27. It's also important to note that they are going to be playing a very important role in the decarbonization of the molecule. We are expecting to invest over EUR 1 billion in that same period of time in raising the share of green gas. By 2030, we are actually aiming to quadruple the French biomethane production capacity that will be connected to our gas grid. And for our own biomethane production, we are targeting 10 terawatt hours that will be in France and also in a few countries in Europe when we have a presence. This rollout demonstrates that decarbonization of existing infrastructure is real. It's achievable. It's happening, especially with biomethane, which is very mature today. In green hydrogen, we do maintain our ambition to be producing about 4 gigawatts by 2035. We recognize though that the market is taking a bit more time to emerge. We're still optimistic about its potential and its very important role in the success of the energy transition. Turning to the next slide, still in the networks arena. We want to continue to raise the share of power in relation to gas in our Networks business unit. This is not something new. We've said that before. Between 2021 and 2024, the power share of network EBIT more than tripled to over 8%, and we are aiming to have that near doubling to 15% for 2027. At the end of 2024, we already operated 5,400 kilometers offline. We target this to double over 10,000 kilometers, mainly in Latin America, where there is both a need for massive strengthening of its networks. And also, we have established competency and a very good track record that we rely on. Last, it's no secret that we bid unsuccessfully for the U.K. electricity distributor, ENWL in 2024 during the summer. We are going to continue to monitor the developments in distribution in Europe. We will consider a potential acquisition only if such an opportunity is value creative, aligned with our capital allocation policy, offering us operational control and supported by a robust market regulation. We are determined. We will be focused on quality, but we are patient, we are patient, and we are mindful of value. Moving to local energy infrastructure. This is a new name for Energy Solutions Global business unit. Its financial results will be reported within the Infrastructure segment, but it remains a GBU. The market drivers for this activity continue to be very good with strong growth expected in heating and cooling solutions, especially where at Engie, we happen to have a very strong position. We are today among European leaders in district heating. And in district cooling, we have a sizable platform in the Gulf region with our shareholding at 40% of Tabreed. And our objective is to provide more than 20 terawatt hours of green distributed heat cooling power by 2030. But we cannot be everywhere, and this is particularly true in these global business units. So in parallel of focusing on growth in the domain I've just mentioned, we are taking bold decisions to focus on our 5 core markets in Europe, where underlying margins and revenues have been trending upwards. And we are placing our businesses in the Americas and in smaller European countries under strategic review. And I repeat for the sake of clarity, I am only talking here about the local energy infrastructure business ex Energy Solution. And we want to reenter, we focus geographically this business because we are also -- and as we are doing that, we are taking the opportunity to carry out an optimization of span and layer. In this case, we are removing a regional layer consolidation level. We're merging support function, and I wanted to highlight this as a very good example from the team, representing a good concrete application of our performance and simplification program. All right. I think we've all earned a break. Thank you for the attention. I think we have to come back at 3:30 sharp. Thank you very much for the attention. [Break]

Ladies and gentlemen, please take your seats. The presentation is now starting. Thank you.

Thank you, and thank you for being back. I can go. Okay. Excellent. Thank you, and thank you for being back. I hope that you had an opportunity to stretch your legs and grab a cup of coffee. And now we move into the funny part because that's a number, so we all like it. And that's a difficult start. And I have to apologize because we changed a bit reporting segment. And I know usually you don't like that very much so. never a very good moment, of course. But I hope that you had a chance yesterday, at least to put your head around our '23 pro forma so that you're not fully surprised. And now it's in line indeed with our new management reporting. So here are the key changes that you need to have in mind. So renewables and Flex Power upstream activities will combine renewables power storage facilities that include batteries, but also pump storage. And we had pump storage both actually in renewables and Flex Gen. So now they are all in that same pack and also gas generation. We are also basically combining renewables and Flex Gen together to maximize integration synergies. Batteries contribution will be reported together with renewables as increasingly the business is actually mingled. But to make sure that you can keep track our progress on batteries, we will keep sharing their specific contribution including what is transferred and reported in energy management. So you will have the batteries numbers directly. Infrastructure, no major change here versus previous organization. For reporting purpose, we are including that segment -- in that segment, local energy infrastructure which correspond to former Energy Solutions, excluding assets under strategic review. And therefore, this local energy infrastructure business will be completely focused on DHC, industrial utilities and energy performance. Infrastructure as a whole also includes our developments in biomethane, hydrogen and e-molecules. Supply and energy management, our downstream activities basically is a combination of GEMS and retail. New organization, new segment reporting, but same principles of value creation. So no surprise on that page. No surprise first that our medium-term trajectory goes by a low point in '25, excluding Nuc and then in '26 goes to a further low point, including the stop of the 3 nuclear units in '25. No surprise, neither that from then, we expect continued growth of earnings in '27 and onwards. And this growth is underpinned by three main drivers. The first one is that we keep creating value from our investments. Over the next 3 years, we plan to deploy in the range of EUR 21 billion to EUR 24 billion of growth CapEx. Investments will be focused on renewables, power networks and batteries in our core markets where we can leverage from our integrated model. We keep targeting a healthy spread of 200 bps above WACC on average. The second driver is performance. We delivered EUR 231 million in '24. And as Catherine was mentioning, we plan to accelerate to reach above EUR 1 billion on incremental EBIT by '27. Our new organization is a key enabler as it will promote operational synergies and also simplification. But you will see that we will also work on cure and competitiveness as a whole to pull new handles of performance. Third, we will improve Engie's risk profile through our investments in contracted and regulated assets through the derisking of our nuclear activities and through portfolio management as we keep pruning our asset base. By '27, we expect close to 2/3 of EBIT to be either regulated or long-term contracted. Executing on these three elements will grow sustainable earnings and cash flows. As a result, we are updating our dividend policy with the same payout, 65%, 75% of net recurring income, but increasing the floor to [ 1.10 ] for '25, '27. And in parallel, we will maintain a strong investment-grade rating. Let's start first with growth driver investments. So we plan total gross CapEx, EUR 21 billion, EUR 24 billion for the next 3 years, which is somewhat comparable to our last 3-year plan, which was EUR '22-'25, EUR 1 billion less. Our capital policy has been and will be consistent over the years, but we are fine-tuning total amount as proven and also allocation based on market opportunities and based on returns. 75% of our growth CapEx will be focused on renewables, power networks and batteries, as you can see on the graph, more green electrons, but smarter. Of course, there will be no deviation from our capital discipline. It's at the core of our organization and at the core of our investment decision and now well embedded for all people. In addition, one, our investments will be fully aligned with our CO2 reduction trajectory and with our industrial and geographic strategy. Two, most of it will be organic. And three, we will be selective. We clearly do not see growth at the expense of returns. As a result, we expect this investment plan to contribute at least EUR 1.5 billion of incremental EBIT by '27. Having discussed our capital allocation in detail, let's now turn to the evolution of our capital employed. As you expect -- sorry, as you can see, we do expect capital employed to grow by around 20% between '24 and '27, in line with the deployment of our growth CapEx. Supply and Energy Management is stable and relatively insignificant in terms of capital employed. Our midterm target ROCE is unchanged at 7% to 9% despite the significant increase in capital employed. And you know it's not easy to keep the ROCE as it is when you invest a lot. Engie owns a strong portfolio of mature and profitable activities in gas infrastructures and a unique franchise in downstream with healthy profits and limited capital requirements. It helps tremendously. With our integrated model, we can actually deliver growth while not diluting shareholder return and not wearing out the balance sheet. But -- and we proved it recently, we keep a significant upside when market conditions offer further opportunities to leverage our asset base. Let's now be a bit more granular on Flex and evidence how our investments are actually creating value. So we have many opportunities to invest, as Catherine and Paolo pointed out. Firstly, in renewables, where we still plan to deploy about half of the growth CapEx. And you heard Paulo to respond to power demand, renewable generation is second to none. And as it is intermittent, it pulls growth from power storage for batteries and for power transmission and distribution. But the investments we plan only makes sense if they are carried out with perfect execution. And you heard the comments of Catherine on construction performance, both in time and on budget. We are delivering on that. But they only make sense if they come also with the right returns. And you may recognize the graph on the right of the slide, we had the same a couple of years ago. And I know some of you will point very precisely where they are on the graph, and I'm sure the IR team will entertain a good discussion on that. But you can see the returns from the various projects, the average of which well above WACC, WACC, which is higher than 2 years ago since the risk-free rates have gone up, of course. And of course, as you can expect, batteries, part of the revenues being merchant and hedged yields better returns than the other projects, much higher IRRs. A recent track record in deploying capital speaks by itself, and we intend to keep the same discipline in project delivery and compliance with our hurdle rates. I like that one because when I went from my induction 2 or 3 years ago, there was a widespread skepticism with the investors about the capability of E to deploy capital and create value. So I cannot resist to present 4 of our achievements in batteries, power networks, solar and B2B. These 4 activities had no material contribution to EBIT in '21. And you can see that in '24, they generated together EUR 1.7 billion, not so bad. And we expect this contribution to rise further to a range of EUR 2.2 billion to EUR 2.8 billion in '27, mostly thanks to batteries, solar and power networks. The decrease in B2B is mainly due, of course, to the phaseout of contracts locked in at high margin and the normalization of profits, but a sustainable level and then increasing level again. What's more, the risk profile of these activities is attractive and will actually strengthen the group immunity to market fluctuation. Power Networks is regulated. Solar is long-term contracted. We plan to have 50% of batteries revenue hedged over 5 years. And B2B is a commercial activity and as such, relatively immune to variation in energy prices. You had the question for '24. Of course, it does not come without a lot of efforts and also some investments. We have EUR 11 billion of capital employed in these 4 businesses in '24, and we expect to double in '27. As you can see, we are developing future proof value, and we are doing it fast. Also critical to drive earnings up is performance, and we plan to deliver more than EUR 1 billion of incremental EBIT by '27, a significant increase versus the last 3 years. We have identified three drivers to deliver this ambitious plan and two you are already familiar with operational excellence and recovery of loss-making entities, as I mentioned, with '24 results. I'm not going to dwell on that. You know them. The third driver is to work on our culture and competitiveness with four buckets of action. One is to be lean and agile. To do so, the new organization will be an opportunity to reduce management layers and to increase span of controls. And no better example, as it was mentioned by Catherine, that the new organization of local energy infrastructure. The second handle is efficiency with optimization and mutualization of our structure and support functions and the development of digital solutions to improve process performance. We are using and we have been using these good years to invest in our processes, invest in our systems to make sure we can deliver now more efficiency. Third end is to be even more focused and selective in business development in a world to improve our hit rate. And the fourth one is to do more with less, meaning that plan to cut nonessential expenses and promote a culture of cost management. And rest assured that there is some room to do that in Engie. Now a very key dimension of our earnings growth is the spectacular improvement of our business profile, as you would expect from the best energy transition utility. Let's look first at the business mix. On the left '27, the share of regulated networks activities supported by gas network back to normal profitability and growth in Power Infra should increase significantly, while the weight of supply and energy management should decrease. The relative importance of renewables flex power should stay quite stable. But of course, we expect renewables and batteries to grow and gas generation to reduce. Looking now at the risk profile. In 2024, 42% of the EBIT was regulated or long-term contracted. By '27, we expect this number to rise to 63%. As you can see, it's a massive derisking. Furthermore, overall, our merchant exposure to outright power prices in Europe will reduce drastically from 20% in '24 to less than 5% in '27, notably thanks to the Belgian deal. Our market exposure is actually shifting from prices to volatility, and it's not a bad thing as volatility should stay higher for longer due to the high level intermittent energies, but also as volatility can be negative. Of course, if market volatility is above our expectations, we will capture more value from our merchant assets, which will be positive for EBIT, even if it means that there might be a dilution of the percentage, but of a bigger number. The important point here is that roughly 2/3 of our '27 EBIT guidance will be regulated or long-term contracted, which give us a better protection against energy market headwinds and greater visibility in achieving our ambition. And let me insist on one point. '27 EBIT is roughly the same that in '24. So it's not that we have decreased the merchant EBIT, and that's it. No, no. There is a real same kind of EBIT, but with much better split. And this is consistent, of course, with guidance of EBIT for '27. At this point, I probably need to give you more color on what is not regulated, not long-term contracted, so specifically on EBIT for supply and energy management activities, focusing on former GEMS business. First, on energy management. Energy Management, which was previously known as asset management and optimization within GEMS. Its earning powers benefit from volatility rather than energy prices per se. You can see that EBIT rose during the energy crisis and its aftermath as technical reserves normalize. We expect that under the new normal, EBIT should settle in a range of EUR 500 million to EUR 900 million, but it could go above if there is significantly higher volatility. Moving on to B2B that is commercial in nature and more predictable. We are expecting EBIT in the range of EUR 900 million to EUR 1.1 billion, split roughly 2/3 supply and 1/3 risk management on the same customers, risk management on the customer which are in B2B and aiming for underlying EBIT growth of about 5% to 2030 once we stabilize. Still, in '25 and maybe in '26, we expect some nice tailwinds from contracts of the past to take us above the midterm range. Remember that the bulk of this unit is supply of energy, for which 80% of the margin is locked when we start the year. For the non levers, and there may be a few nonbelievers in this room or in the call, if you add up the ranges of Energy Management and B2B, you get to EUR 1.42 billion. And that does compare very well with the EUR 1.5 billion for GEMS that we have shared with you in the past. By the way, the same number, this EUR 1.5 billion for 2025 is expected to be around EUR 2 billion. As you can see, we did not allow a good crisis to go to waste, and we are expecting results significantly above the precrisis level on a sustainable basis. Let's turn now to see how all of this translates into our EBIT, global EBIT. We expect '27 EBIT, excluding Nuc to stand between EUR 9 billion and EUR 10 billion, an average sustained increase per year of 10% compared to 2021, which is the best basis for comparison in terms of energy market conditions. Prices and volatility will have a negative impact in the range of EUR 1 billion to EUR 1.3 billion, mostly impacting our energy management activities and our CCGTs in Europe as we have limited hedging, of course, on '27 today. On the other side, networks will see a positive impact from indexation and tariff increases, including clawback on previous years. We expect hydro volumes to be negative in the range of EUR 300 million to EUR 500 million as volumes were significantly above average in '24 and disposals should also account for about minus EUR 700 million as we keep pruning our asset portfolio. Investments will be the main driver of the growth, mostly coming from renewables, batteries and power networks. Performance will also be a key driver of EBIT growth and all our segments are expected to contribute under our new plan. Beyond '27, we expect sustainable yearly earnings growth fueled by both growth investment and continued improvement. Moving on to the main EBIT drivers by activity. In Renewables and Flex Power, we expect despite a demanding comp base from hydro volumes and capture prices, a steady EBIT growth from renewables and BESS, thanks to new capacity, including batteries and continued performance improvement from a growing asset base. And of course, when your asset base grows, it gives more capabilities, more assets to actually optimize. We expect a decreasing contribution from our CCGTs due to market normalization in Europe, residual coal exits and assets arbitrage overseas, but with upside potential depending on volatility in Europe. In Infrastructure, we expect EBIT to be in the range of EUR 0.9 billion to EUR 4.3 billion, a significant progress compared with ' 24 when our EBIT amounted to EUR 3 billion. It reflects gas assets back to their normal profitability, augmented by the clawback from previous years in France and growth in Power Networks, also a sound recovery of our local energy infrastructure business. Supply and Energy Management should land in between EUR 1.9 billion to EUR 2.5 billion versus EUR 3.1 billion in '24. And this decline reflects the normalization of energy markets in Europe, the phaseout of contracts locked in at high margins for B2B and the EUR 0.5 billion nonrecurring market reserves that is reversed in '24 for energy management activities. All in all, we expect EBIT, excluding Nuc to be in the range of EUR 9 billion to EUR 10 billion by '27, above '24 and comparable to a record high in '23. Let's look at the cash balance over '25, '27. Here again, that's a graph that you are familiar with. No major change compared to 2 years ago. Cash inflows should reach EUR 38 billion, EUR 42 billion, mostly coming from operating cash flows and to a lesser extent from disposals related to the of the portfolio. Excluding nuclear phaseout, cash outflows will stand between EUR 42 billion and EUR 46 billion. Maintenance CapEx should be near EUR 8 billion and growth CapEx are expected to be in the range of EUR 21 billion, EUR 24 billion. Dividends to shareholders and minorities, but also a few other items should land between EUR 13 billion and EUR 15 billion. Cash outflows are, therefore, a bit higher than cash inflows, so the net is going to rise for a few billions over the next years, but credit ratios will stay within our target, as you can see on the right part of the slide. Let's finish with our guidance. Details on our assumption can be found in the additional materials. I have already commented EBIT. So net recurring income group share is expected in the range of EUR 4.4 billion to EUR 5 billion in '25. You recognize in the guidance our expectation to reach a low point of EBIT, excluding Nuc in '25 and the low point of recurring net income in '26 and then '27 is expected to come back to '25 level, including higher cost of debt. That being said, it will be significantly above precrisis level with net recurring income group share up 60% versus '21, showing how the group reshaping can actually generate value for shareholders. We are updating the dividend policy with increased floor to 1.1 unchanged payout ratio, 65% to 75% net recurring income. We stick to a strong investment-grade credit rating and economic net debt to EBITDA below 4x. With that, I hand over to Catherine to conclude the presentation.

For me, three key messages really to sum up. First, the success factor for the energy transition are fairly clear, electrification, flexibility and pragmatic build-out of infrastructure. The second point is that Engie strategy happens to be fully aligned with this transition and is totally fit for purpose indeed. with green electrons supported by the molecule targeting fully 24/7 decarbonized PPAs offers at scale expansion in power networks. And finally, we have three underlying strengths that when taken together, truly set us apart, a highly cash-generative portfolio, an incredible portfolio of assets, skills and reputation in energy management. So with this, by 2027, we will be a transformed group with a successful reallocation of capital, drastic simplification, embedded performance culture and an earnings through that will be firmly behind us. We will have a massively derisk structure with almost 2/3 of EBIT regulated or contracted and our nuclear business becoming quasi-regulated. So by 2027, we will have constructed a rock-solid platform, a springboard from which we will be in the best position to look forward for a bright and growing future for ourselves, for our customers, for our shareholders with steady, sustainable, more predictable and reliable expansion fueled by investment, execution and performance. In conclusion, I hope we can convey to you that we have conveyed to you our confidence in our goal of being the best energy transition utility. Thank you very much. And I think I'm going to pass it on to Delphine. Thank you.

Thank you, Catherine. So we'll open the floor for your questions. And I remind you that we'll also be taking questions online just before taking questions from the room. Operator, could you please remind our online participants the process for asking questions, please?

[Operator Instructions]

Thank you so much. Meike Becker from HSBC. Maybe kicking off with a broader question. I really like the Slide 39, the waterfall makes it very easy for us analysts. If we could go into two parts of that, the performance bucket of it, roughly EUR 1 billion of EBITDA growth between '24 and '27. What gives you confidence that, that will actually hit your numbers? That will not be competed away, that if it's in the networks, it will not eventually have to be shared with the customers? That will be my first question. The second question is, in your CapEx slide, you said 80% of your investments is organic. assuming there's 20% inorganic, does that also hit your EBITDA guidance? So in your EBIT or in your EBIT growth expectations, is there also an inorganic part to the growth?

Okay. Thank you for your questions. So maybe let me give it a start on the performance bucket. The first thing about this performance bucket is that we have confidence in its delivery based on the track record. We have managed to deliver, I think I've mentioned EUR 900 million over the 4 years period. But we also feel that to a certain extent, we have scratch the surface. We have a lot more to do on performance. As you know, the transformation of the group into a more industrial run set of global business unit gives us many opportunities that we've laid out in a few different categories, but I would probably single out continued opportunity in supply chain. We are still to draw all the benefit of leveraging the size of the company of our global business unit. So supply chain is a big thing. We've talked about what we want to do on cultural organization, span and layer. We've given an example in Energy Solutions, local energy infra, as we call it now, with the collapsing on the structure. So we have a set of actions very well defined where we are going to be simplifying global business unit and derive performance from it. So we really have elements all over the businesses. So indeed, we will do a little bit on networks, and we'll have that to play. Some of it might be caught by the regulator. But to a larger extent, I do think that we have a responsibility as gas consumption is likely to come down to deliver performance on the network as well because we want to keep the use of our infrastructure affordable for society and customers. So I think that's completely fine. We're going to ask the networks organization to deliver performance as well. But frankly, the EUR 1 billion that we've identified is something that we will take advantage of. And maybe I will add also the list of underperformance units. We continue to have some. So we address them, the most visible and you guys know very well, EV Box, we've talked to you about a lot. We don't have as big ones anymore, but we do have a few small objects that we continue to work turn over and fix, and this will contribute very much to the EUR 1 billion.

Maybe to complete and just to give a number to illustrate what Catherine said. To give you an idea, our procurement efficiencies in '24 were north of EUR 400 million. But you're right, part of it, you don't keep for you and part of it will go either in tariffs or it will be going through performance to customers. So to the number that we discussed is the net. The gross assumption is higher than that. But of course, we have -- given our asset base, given our growth, we are refueling every year new opportunities to manage our assets and to find efficiencies. So yes, it's a net number, and we are confident that we can deliver on that. And then to your point about M&A, yes, indeed, we have about 20% of our total CapEx, which is in M&A. Part of it is well identified. Part of it is less identified. But we take, of course, that this M&A will deliver EBIT as well. So it is embedded in our numbers.

And you know the performance plan at Engie, we call it competitive plan. The driver for us indeed to make us more competitive to be able to win project, to continue to deliver the project and to protect the returns. So there is a strong internal motivation to go after these performance gains because this is a condition for growth. And people have now integrated that because otherwise, we just can't find the projects to meet the criteria that we want. So it's very important to everyone.

Okay. Arthur.

It's mainly a question on your various assumptions for your plan. The first one is on the assumption for Networks. The EBIT is quite high in 2027. I was wondering if you could quantify the part of that, that is nonrecurring and will normalize in '28, I imagine due to the catch-up. And as well if you assume any inorganic growth in there? And the last part of the question is if the trajectory for your '27 EBIT in Networks sticks to the volume trajectory of the regulator or if you take something a bit more conservative? And the second question still on assumptions is on the tax rate. It's quite lower, I think, for the next 3 years than what we've seen in '24. I was just wondering the reason for that. And as well, you talk about contingencies for potential tax changes. If you could quantify that, that would be great.

Thank you. You can look at the engine, but don't look too close to the engine neither. So, '27, Networks be indeed is high. To answer directly your question, yes, there is a bit of inorganic contribution in there. I mean, just very much related to the previous question, we have some M&A assumption. You would be disappointed if there was nothing in Power Networks, not massive, but there is something in there. So that's part of it. And the big part is coming indeed from the gas assets where there is no acquisition. And there, indeed, there is a clawback. And there is a point about, okay, but are we at risk to see a significant amount of this going away? I think the answer is in your third question is what kind of volumes assumption are you taking? So the answer is that we are not necessarily taking the same volumes expectation that the one supporting underpinning the tariff because indeed in the tariff, there is an expectation of volumes, which might be with some ambition and doesn't mean that our projection with the same. So what does it mean? Either the volumes are back to what was anticipated in the tariff assumptions. That would mean higher EBIT actually because there are more volume. And then there will be that this time, there might be no clawback in '28 and maybe even a negative clawback really, really very high. But the other assumption is that the volumes are in line with what we believe and then it means that we are okay. But then it means that maybe -- next time, we're going to have to discuss, okay, there is a shortage, how do we do. So I think that you should not base your view that there will be a fall in '28 because there is a kind of an extra amount, which will disappear. There will be a big discussion, that's for sure in the next 4 years, and we cannot say what's going to happen, but I don't think there is an embedded risk with that one. And then on the tax rate, to make -- if you look at the guidance that we have today, it's very close, what we are suggesting is very close to the average tax rate in our operating jurisdictions. So there is nothing really weird in there. The point is that we had in the previous setup some tax inefficiencies, and we can fix some of these tax inefficiencies on the back of the new deal. part of it was linked to the holdings, which were amended actually by -- directed by some regulation. Now that we are taking this away because we are going to close by 14th of March, then of course, it allows us to kill some of these inefficiencies over time and help us to be more normal, I would say, in terms of tax rate, which was pretty high.

Okay. One question.

Wanda Serwinowska from UBS. Two questions from me. The first one is on the U.S. If I look at the pipeline, you have basically 1/3 in the U.S. Can you please -- I mean, give us a breakdown, how much is onshore solar, how much safe? Because what I'm trying to understand what if the renewables growth stops tomorrow, how big is it for Engie I know that over time, as you mentioned, you can move the capital, but the question is how quickly you can move it and what is the risk? And the second is on the Belgian nuclear. The new government said that they are willing to extend further by another 10 years, the two units or they even think about new nuclear. What is Engie's view on that one?

All right. So I'll start and then Paulo can complement a little bit on the flexibility he has on his pipeline in the U.S. So he's mentioned already a few words. But maybe we're starting with the Belgian and so our key priorities, obviously, is to close the deal, which will be done by March 14. So we are on the last technical steps that we are conducting with the Belgian government. Our position on nuclear at Engie is totally unchanged. We do not want to be involved in nuclear development. We have enough to do with renewables and flex and all the stuff that we've talked about. But we are obviously absolutely ready to accompany the Belgian government in the closeout of the aging plants, first of all, because they had decided to exit and because also of the age and the conditions of this plant. So that plan has not changed. We will be closing the deal, which, as you know, covers 10 -- covers two, sorry, of our nuclear plants. The other one -- the other thee ones are going to be shut down this year in 2025. In fact, the first one was shut down on -- the first one of the three was shut down -- was stopped on February 14. But of course, there is a new government, and it has been quite vocal and supportive of nuclear. They've also talked about SMR development, which could be interesting for other developers, again, not for us at Engie -- and we will have discussions. We will listen to what they want to do. Today, we don't have a plan, certainly not to bring a third tranches to the deal for the 10 years extension. Frankly, it's too early to say. The key for us, priority is security is excellence in operation. It is executing this LTO. Let's not forget that LTOs, it's not a small thing. It looks like we just continue and restart, we have a lot of work to do to make sure that these two tranches are fit for purpose to operate for 10 years. We are very focused on that. But of course, we will discuss with the government in a constructive manner as we've done with the Belgian government now for the past 4 years. So that's the key priorities. And then maybe on the situation in the U.S., I will pass it on to Paolo to talk about the agility he has on his pipeline and the makeup of his pipeline. But just to remind you that, obviously, there is an offshore wind topic in the U.S. and the decision was taken are already taking into account the fact that we feel that there's probably going to be delay in development. Remember, we have three projects. We have one which is quite advanced. It's a great project. So if we pose it, it's okay. Let's see what happens in 4 years. I think what's really important to understand in the U.S. is that if the economy goes well and if AI continues to be such a strategic topic for the United States and for the new administration, power demand is going to be exploding. And frankly, renewables is an indispensable part of the solution to meet energy demand, just simply because even if you say I want nothing but gas, you will not be able to physically because of time-to-market considerations, permitting. But even if you say, okay, I forget about permit, supply chain. Supply chain bottlenecks are such that it's going to be very difficult to meet all of this demand growth with gas power generation, which is why there is room no matter how people dislike renewables, if people were to decide that they don't like renewables, renewables are going to be needed. And I believe that the U.S. doctrine that is seems to be emerging all of the above, the so-called, which needs to be obviously defined in more level of details by the new energy dominance Council will give us more color. But I think the spirit is indeed to provide all the to power Americas, and this will have to include renewables and batteries. That's our view. On the other hand, of course, we have flexibility. And maybe, Paulo, you can comment a little bit on exactly how you can do that.

Yes. So if you look at the slide, we have about [ 90 gigawatt ] to be delivered between '26 and 2030 on our pipeline at this stage. Around 30 gigawatts are in the U.S. And if you assume that typically we can achieve 1/3 of the pipeline, so you're talking about 10 gigawatts. If there is a significant reduction of growth in the U.S., we can assume out of that 10 gigawatts, we could deliver half of it, let's say, 5. So you could easily see that 5 gigawatts, we can spread across all the other regions that we have with the pipeline and that will continue to grow. Of course, this pipeline is at this stage today. It will continue to grow over the next years. And on safe harbor, we normally have around 1 to 1.5 gigawatts of safe harbor projects because it is the visibility we have in terms of construction for the following 2 years.

So we'll now take some questions online, and then we come back to the room. Operator, can we start with the first question, please?

The first question is from Bartek Kubicki, Bernstein.

Very good. If I may actually three questions or three issues I would like to discuss. First of all, if we think about your Flex Gen gas capacities in Europe, how will they behave under two scenarios. One scenario will be a significant increase in power demand in Europe. Many companies are already talking about this about gigawatts of connection requests, which would drive power demand significantly up. And second scenario is if the batteries market is quite saturated and consequently, the spreads may decrease. So how do you think the gas assets will behave? And maybe you can also think about your gas infrastructure assets in a situation of increased power in Europe. Second of all, on your dividends, if we look at your net income guidance and we flex a little bit your payout ratio towards the upper end, we may actually have a situation when there is no dividend decrease in the next 3 years. And now what is your feeling about future dividends? Are you okay with having an EPS cut? Or are you actually more willing to keep the dividend at least flat or growing for the next 3 years, giving the flexibility you have in the dividend payout -- dividend payout ratio range? And thirdly, please apologies for three questions. Electric grids, what if you actually get a grip on an electric grid, which is rather large in size than small in size? Do you think this could change your capital allocation policy, meaning you may, for instance, decrease your renew targets or you may sell some gas assets? How do you think about this when you actually get a bit more power grids via M&As than you are assuming in that?

All right. So quite a program. So I'll discuss some of that. Maybe, Paulo, you want to talk a little bit about your fleet and how would it -- yes, how does it behave under power demand increase?

It depends very much on at what time of the day, power demand increases. If power demand increases during the day, we have an excess of solar generation, and so we would not expect a significant increase of load factors for our gas generation. On the other side, if there is a significant increase of power demand at peak, then our gas generation will capture very high prices and depending on the spread, depending on the gas price can go into a good level of margins. But what we see at least today is, as I mentioned before in the presentation, is that this fleet is now fundamental for resolving the volatility problem and the intermittency caused by renewables. This is what we see today. And we are able -- whilst the load factor is coming down, we are able to capture the price spikes that tend to happen with the variability either of demand, but more of wind. And that's the driver for this business. So we don't expect load factor to go significantly higher, but we expect that margins that we can capture related to volatility will continue at good levels.

Okay.

And there is another one on battery market saturated.

Yes.

I mean the batteries are coming to resolve problems across the value chain. We can see them as a potential solution for constraints in the network and transmission companies are looking at how they could incentivize companies like us to bring batteries where they have constraints in certain nodes. And that's, I think, a solution that could reduce the needs for CapEx into networks, but also to avoid the time lag between the need and the effective upgrade of the transmission. So batteries can deliver that service. Batteries are balancing the day today together with the gas generation. And in Europe, in particular, there is no significant capacity yet for what is going to be needed. And finally, for companies like us that are ready to make 24/7 green offers, of course, we can only do that with covering in terms of hedging our position when there is not enough green power available in the system to guarantee a as consumed PPA. So there is a significant use for batteries, which are more attractive for the market as prices are coming down massively. You see a massive reduction of the price of batteries, and that is from a couple of years. And the expectation is that this is going to continue to happen like it happened with solar PV panels, for example. So additional volumes, what can be expected, efficiency of manufacturing and the ability for reducing the prices to companies like us that need them to develop answers to flexibility, answers to intermittency associated with flexibility.

And just to complement maybe on Paulo, I think Europe is a little bit late on battery development and is finally integrating in its market design. And I think it's coming very strong from the K industrial deal that they have understood the need to get into the flexible topics and therefore, have enough CRM schemes for every country to develop batteries. Batteries are very important for all the reasons you said, the retirement of baseload, et cetera, but also avoiding overbuilding of the grid. Often, you have bottlenecks in the grid and batteries can help actually relieve those bottlenecks, so avoiding to have to invest -- overinvest in the grid. So we continue to be super bullish on batteries for all of these reasons. And we think finally, Europe is taking the right measures on the policy point of view to make sure that we can go ahead and develop what needs to be developed. So I think we are very happy with that. Maybe I'll just take the dividend one because we obviously are acutely aware of the importance of this topic. You hear us often on dividend that we like to be quite consistent. We think to be consistent dividend policy is. So we've retained this consistency. We have, as you know, a payout scheme based on the net recurring income, which almost by line means that there could be some variability. So particularly when you look at our net recurring income in 2026, you have a little bit of drop. So we cannot guarantee that because we want to stay in the payout ratio that we can give you a progressive growing trajectory of dividend that cannot be guaranteed, even though we do have a bit of flex that we can play with should we decide to do so, but the cannot be at this stage yet a commitment. I think if you take a bit of a longer view from 2026 based on our current understanding of our earnings trajectory, we should be able indeed to deliver this progressive growing trajectory within the dividend policy that we have. And then I will highlight the fact that we obviously have increased the floor significantly to also send a signal of confidence about the visibility, the predictability of earnings results of Engie, New Engie, 63% of our EBIT in 2027 coming from regulated and contracted, et cetera, et cetera. So that's a bit of the more color on our dividend policy. Maybe you want to take capital allocation on electric grid question.

Big electric grid. It depends, but -- so -- we discussed earlier our plan, and I was pretty clear that in our numbers, we have made some room for some incremental acquisition in Power in France. So we have a bit of room there. Now it's not necessarily big, but it is somewhat significant. We -- and I don't want to go into, but if you just take what was the plan for ENW, I mean, clearly, we had the plan with ENW to go for this acquisition and execute, of course, on our capital policy. What does that mean? That means that if we go there, we're going to have to make maybe a few choices of investment. So it means that we're going to have to decide to do a bit less capital expenditures in other parts of the business. We may also decide to monetize other assets. I mean we mentioned that we are reviewing our portfolio, and you have an indication in our cash equation that we plan to dispose about EUR 4 billion of assets in the next 3 years. but we have also some flex, and we have some handles that could pull because at the end of the day, it's capital allocation. So you can decide if you find the good returns to make some calls of that kind. So we have this possibility to play within the bandwidth. And then there are also some structuring, which is possible. I mean, clear on an asset like that, you can find some very strong financial partners. And on ENW, we were not on our own. So you have partners who can also bring the balance sheet to help you. And that definitely is something that we are, you know in Engie, very strong at, and we have a lot of experience doing this from Middle East to the U.S. and everywhere. So we would do it. There are also some financial instruments that can help hybrids. I mean that's also a solution that can help if it is on the high side of B. So there are ways that we can mobilize the balance sheet. You've seen that we have deleveraged significantly, and we have some room for somewhat big electric grid acquisition. without changing the capital allocation policy, which means without moving away from our strong investment grade and without, of course, jeopardizing our dividend policy.

In our business line.

So we'll take another question online, and then we'll come back to the room. Just can we take a second question, please? The next question is from Juan Rodriguez, Kepler.

The next question is from Juan Rodriguez, Kepler.

I have two on my side, if I may. The first one, as you signal is on Page 34, you signaled questions might come, so I'm going to try actually. I'm curious on the renewable projects on the left side of the curve that have IRRs above 5%, but below your current WACC. Can you give us more color or some clarity on these projects? Are there some specificities on it either on power price assumptions, lower regional WACC? We would like to better understand on it. And what is your plan with those assets? And the second one is on -- coming back on these networks M&A. You signal distribution assets that are your key. What about transmission networks? There are some assets needing some capital on some of your key regions on that side?

Okay. So I'll talk a little bit about the network. So in terms of M&A, indeed, we narrowed down the inorganic growth opportunities to the distribution assets in strong regulated place. So we're looking more at Europe type of objects. On the transmission side, we're very happy with what we can do organically. And in general, maybe taking a step back, we like to remind ourselves that we feel that we create more value at Engie, especially as we have strengthened our industrial and operational capabilities. And that's exactly what we're doing on the transmission side in Latin America. I won't remind you the numbers that were quoted in the presentation several times. But really on the transmission side, we really feel like we can do more on the organic, and that's what we are doing, and that's where our target is. On the IRR questions, I guess, do we know what this slide, that's the IRR. You want to comment, Paulo, maybe a little bit what are your outliers?

Yes. Most of the projects where we have low IRRs are related with the kind of contracted structure we have with CfDs or feed-in tariffs, typically in France, where we bid very close to our cost of capital. And of course, the overall portfolio where we have more risky projects balances the total average that we can see on the chart. But what is important is that most of our projects are between 7% and 11% IRR and the average has increased in 2024. So I think -- and in fact, you've seen the EBIT contribution and Pierre-Francois every quarter discloses the contribution of assets that are commissioned specifically on renewables. And I think we can confirm that our growth is about profitable megawatts.

Maybe it's an opportunity to bring you some basics of our capital allocation and also the way we look at FIDs when it comes. So first, the WACC that you see is group WACC. So of course, you have projects which are above and then you have projects which are lower, as Paolo pointed out. So each and every project, we look at the risk profile of the project, and we will determine the cost of equity for that project that will convert into a hurdle rate. And we'll take in account, of course, especially the contracted part or not also the maturity of the technology, any risk which is related, and that will influence the beta of the project. And that's the way we will be ranking our project to make sure we can invest our money in the best possible way to recognize maybe some principles that you are very familiar with. We do the same. So for us, it's a business of capital. We need to be very sharp in the way we allocate. So it may end up with a project coming with a very low cost of equity because fully derisked and it could be below indeed the IRR could be below the group WACC, but it doesn't mean that the project value restrictive because the group WACC is reflecting the average IRR. And that's, of course, we bench the total returns against the WACC, so the average portfolio. And then, of course, we are confident that we can deliver 200 bps above WACC on the portfolio of projects.

Ajay, and then James.

I guess I want to sort of ask a little bit, is this sort of Chapter 1 of the chapter story or Chapter 1 of the 3 chapter story in the sense that you've described a 24/7 power where renewables is complemented by gas generation, batteries and a bit of a reprofiling towards power networks over the course of the plan and a prioritization or maybe more CapEx going to 10 countries. And I just wonder how far does it go? As in is the end result to get 50% electricity networks, 50% gas? Is it to exit out of all the countries where you don't have renewables, gas and -- well, not a renewables, gas and batteries present together, so it's basically all complementing each other. So you exit other ones that are just gas-only, for example. And then is the end result maybe being in 10 countries rather than your current scope such that there's a bigger simplification here than maybe current plan implies. So just any sort of thoughts, is this a direction of travel and there's far more -- the end game is far more significant? Or is it -- this is the plan, this is as far as we want to take?

Yes. Maybe I'll give it a start and then my colleagues can complement. But maybe the way we think at deployment of capital at ENGIE is that we look indeed our key geographies. I will remind you that 90% of our CapEx goes to 10 countries. So we do have 10 key countries. And then we look at, obviously, the portfolio of assets that we have. We look at the state of our integrated business model. We look also at the policy of that country, its appetite for energy transition, the regulation, the type of priorities that they put when they think about their energy policy. And then we really look at the intersection of that. And then we tailor make our strategy locally at the country level. Sometimes it can be a bit more regional when it comes, for example, to Europe. We also look very much at the region because it's one energy Europe -- there is a European energy market. And we really make sure that we develop and invest to complement this integrated business model that we have in complement with what we think the opportunities are because of this policy that are being set by the government. So -- which means that we obviously adjust locally very much so, especially that we never start from a blank page. We have a history. We have indeed some gas assets, for example, in Romania, we have gas distribution. We have gas distribution in Mexico. So we always look at, okay, how are we going to build the Mexico energy transition future, how we can contribute to the energy transition future of Mexico, for example, using our assets, using some of the Flex Gen that we have there. Investment, is the policy supportive of this investment? If not, we can make a decision, and I'm not announcing anything on Mexico, this is illustrative only. But then indeed, we can decide if we think that there is no intersection between what the country is trying to do, our asset base and where we think and how we think we can create value, then we can take decisions such as exiting a country. And the example of that is, for example, in the Middle East, in the countries that we've announced, yes, I mean, we have gas assets. They are great. I mean, those ones are contracted. They have PPAs. But at some point, these PPAs are going to expire. And we do not see an energy transition story strong enough that we are going to be investing capital towards renewable, battery, et cetera. So in this case, it's actually better to take a decision to exit that country early enough before actually we are at the end of the value of the assets. And then to say we're going to reallocate and turn to a neighboring country such as, for example, the Emirates, UAE, which where we have assets, we have a long history in the UAE, but there is also an appetite to develop renewables, battery energy storage solutions. So here, that's really interesting for us because we use our history, our presence, our brand to invest and start to develop and deploy the ENGIE model, obviously adapted to the country, right? So that's really how we think about it. And you can think of every of our geography like that. If I take the U.K., for example, [indiscernible] is in the room, that's a very interesting set of opportunities, strong regulation, Clean Power 2030. We have assets, but we are a bit short generation, Paulo, no pressure. That's why he said U.K. is a priority asset. We have incredible flexible assets. Our first hydro is just amazing. We're developing also battery. And we have a very strong B2B franchise. So we are very strong on downstream, a bit light on the generation. And so we are looking at how we can balance that by indeed deploying capital to increase our generation because we do like the balance between upstream and downstream. And by that, I mean generation and customer. So we are looking at balancing it. But again, always when and where it makes sense and when the country is developing the right policy. So that's really how we think about and we make a decision on a continuous basis because as we can see also, sometimes governments and directions changes. And so we have to remain -- despite having this big machine, we have to remain a bit flexible and agile and sometimes to course correct as we go.

James Brand from Deutsche Bank. And also just going back, Catherine, to your comments at the beginning, well done on the transformation over the last few years, it's been pretty impressive. So 2 questions for me. One for Pierre-Francois. Obviously, as you know, people do worry about the gas price and speculate on the war in Ukraine and Russia ends and the gas price comes down and volatility comes down, what could it mean? You talked about the energy management business guidance of EUR 0.5 billion to EUR 0.9 billion potentially having upside if volatility was higher. How should we think about that guidance in the context of that main concern -- or that concern that people have around volatility dropping, price dropping in the case of the end of the war. Should we be thinking low end of the range? Or is it something that would make the range -- million-dollar question -- downside to the range. That's the first question. And then the second question is more of a kind of long-term big picture one is that it's around gas networks in France. How do you see the long-term outlook for gas networks in France? Obviously, it's a very important area for you. I don't think you talked about hydrogen at all today, which you were never that big in talking about hydrogen even when it was like everyone's obsession. Energas talks about building dedicated hydrogen pipelines and is coming through France up to Germany. So what are your thoughts longer term? And then for gas distribution, obviously, hydrogen is a bit less relevant, but could biomethane be a substitute for natural gas? Or is there some kind of other long-term vision? Just some thoughts on that would be.

So I'll start with that second part. I'll try to be short, but it's quite -- it's so interesting. I could go on for a long time. I'll try and be concise. Maybe just a quick one. So on the gas mix of France, well, maybe first of all, there is no energy transition without remaining molecules in the system. Today, when you look at final energy consumption in Europe, but it's about the same in France, electricity is 18% to 20%. The more you can grow electrification, we think is about bringing us to about 50% of electricity in the final energy demand. So there will remain a certain amount of molecules in the final energy use. There is no other way, and that is proven and it's just for physical reasons, it's because of industrial processes. There are many reasons for that, but you cannot electrify all usages. So even in the most ambitious scenario of electrification, molecules will be needed. Of course, it will be less. So there will be less volume, but there will be remaining volumes needed in a significant quantity, which means that our networks will be needed for this molecule for a long time. That's the big picture view. Then, of course, [ white ] molecule. And you're right to say that today, we are excited about biomethane, and I mentioned it, we are excited in France for a long time now, but I think Europe now is really taking the measure of the potential, the opportunity, also the risk of being overly dependent on imports. So biomethane is homegrown molecule, and it's the same molecule as the fossil -- that's the fossil gas, right? So this is a no-brainer exploiting the full potential of biomethane. And in France, we expect the numbers I showed you, that's about 20% by 2030 of the gas in our networks being biomethane. So -- and that's -- we can tell you which project will contribute to this 20%. So that's real. H2 is also a huge potential. And we are some -- we were in love with H2 and then there is a bit of cynicism kicking in. But to be honest, again, there are a lot of processes that won't be able to decarbonize without H2. And you can see Europe particularly doing 2 things. First, being a bit more pragmatic about the definition of green H2. So that's coming in all the regulation stuff, you will see it's going to be technology agnostic. So this should help the emergence of the molecule, which is frankly a good news. And then indeed, Europe is taking a fairly high-level planning approach to infrastructure saying we're going to need to have H2 pipe and H2 infrastructure, and we have many countries. U.K. is one of them. France is also doing it. Germany starting to launch projects for -- dedicated for H2. So we have, for example, at ENGIE, that's Natural and GRTgaz -- ex-GRTgaz, e-pipe, which is being converted. It's about 100 kilometers long in the northeast of France for hydrogen. So this is really happening today. The question, of course, is when and where will there be sufficient H2 molecules. And Europe just gave us about EUR 45 million of subsidies across a number of projects covering quite a few of our infrastructure, but transport infrastructure, we have storage infrastructure, and we have also the terminal that could be adapted maybe not to hydrogen, but to e-ammonia. So every one of our infra in France actually has the potential to be reused to a certain extent to other molecules as well, which is really exciting, not mentioning the CO2. That's not super green, but capturing CO2 from industrial process is going to be very important. And here, again, our ability to provide gas infra converted to CO2 will be very important to help supporting that decarbonation. So yes, we continue to be really excited about our gas infra. And that was also the scenario that [indiscernible] published 2 years ago to show that we needed the gas infra for all of the reasons, including assurance of providing energy even to 2050 and beyond. That was a long answer. But maybe gas price, guys, do you want to take that one?

Maybe an even longer answer. So we can keep it very short. Yes, it's -- of course, it's an important topic now. We are not a gas producer. So we have no primary exposure to gas price. I think we discussed that with the '24 numbers. We have incrementally an exposure on commercial margin. That's part of it. Our model is not based on gas at EUR 200 per megawatt, even not at EUR 60 or EUR 50. I mean our model is sustainable with the price of gas, which is decent. And today, the price was pretty high only a few weeks ago, north of EUR 50. And that's not the way it is building. Now if we have a settlement, there will be a lot of things to happen. And so first, it may take a few months before you see gas coming in. Today, in the price, you have already embedded the assumption that there might be some coming in. To what extent? We don't exactly know, but it is already there. It would mean, by the way, that some small issues are also put behind like there are a few disputes with Gazprom that need to be addressed because otherwise there will be other issues because, of course, a lot of creditors are hanging around and waiting for their money. So something may happen. So there will be a discussion maybe around no stream about commercial discussion between the different suppliers. So that has to be addressed. The Gazprom contracts, they are not -- I think, Catherine, you alluded that they are not gone. They are suspended, but they are there. So they would resume. And by the way, these are not bad contracts necessarily. There could be also very good contracts with a lot of optionalities embedded in there, which are not there anymore. But if there was contracts that were reinitiated, they would come back. So I think it's not easy to make a final call about the total impact of -- first on gas prices and then on our own energy management business. There is a second round effect is that gas is a price setter for electricity in Europe to a certain extent, but it is and at least in some markets in Europe. So there is here a second round effect because we are also -- this time, we are a power producer. I made the point that we have decreased very significantly, and we will be decreasing further outright power price exposure. So that's definitely pointing into the right direction. But what will be left will be very much in France. And in France, you know that gas is not setting the tone of everything, and there are also Nuc, which is a very big ticket. And hydro, that can actually impact the prices significantly. So long story short, we don't see that as a major driver of earnings. For us, I mean, the level of price of gas of course, has some impact, but I would not see that as a major one to move the numbers in the long run. There may be, of course, a few on the short term. In the long run, what is that does matter at the end of the day, if gas prices go down, there should be a better economy in Europe. And that is not bad for ENGIE because clearly, that will be also means probably more gas volumes and gas volumes are not bad. They actually impact also the question of long-term gas infra because if volumes are back, I mean, that also helps, of course, to support the affordability. And it doesn't mean that the decarbonation journey is gone neither. So at the end of the day, rather good news in the long run.

So unfortunately, we're running short of time. So this is the end of one very last question from Harry.

It's Harry Wyburd from Exane. I will keep it just to one and try and keep it short. One of the most striking things in the presentation was the B2B slides. So you're maintaining about EUR 1 billion of EBIT. What I can gather from your comments is that you've got some profitable contracts rolling off, but you're adding 300 terawatt hours of additional volumes that you think you're going to sell. Reading through the EU's affordable energy plan, one of the things they identified was supply, and they want to make it more competitive. So I wonder how do you -- how plausible do you think it really is to replace those profitable contracts with B2B growth? And is that something you can do under political or regulatory scrutiny? And how would you achieve that when a new entrant or one of your competitors isn't?

So maybe let me take this, Harry, because I'm super excited about our B2B business. And in fact, I'm very pleased that we're going to give it a bit more visibility because there are real customers behind this B2B, real drivers behind this business. And it is, I think, well illustrated with the PPA market that we are seeing. There are 2 things that are very important. We are going to grow our power sales, and we are going to grow our power sales from gray to green. So we are going to increase the green power share of our overall sales. And the green power sales happen to be higher margin than the gray power sales. The other aspect is the huge appetite for many of our customers for -- to secure long-term low-carbon power supply. So PPA market continues to be very strong. And we can -- we could talk for hours on what we see on the PPA market, but there continues to be a very strong demand. And I understand the angle that you're taking for your question. You're asking, is Europe going to continue that or is going to allow that? There is today a market for PPA. This is not about regulated. This is not -- this is about meeting customers' need. And in fact, Europe, through its CID is going to be favoring the development of PPA market, which is, by the way, something that we as well as the other utilities have been pushing massively. We have said and said over and over again that we need to deploy and facilitate cross-country PPAs in order for customers to meet affordable decarbonized PPAs suppliers. And for that, you need, frankly, regulation changes. And what we understand from EU is that they are actually putting in place those changes in regulation, for example, accessing cross-country transmission right, things that were quite complicated to do, so limiting the PPA market. So no, we continue to be quite bullish on the PPA market. And today, we do find customers that are very happy not to buy 100% of the energy through PPAs. They are much more organized. I think maybe taking a step back is that the market to buy energy is completely different today than what it was precrisis. And when we show you what we've done on the B2B sales front, it's because we are more organized ourselves, but because the market has changed completely. And people are very organized and the structuring their energy supply with I want to have a layer of predictable green electrons PPAs. And then I will work on spot, then I will work on short term, and I will add spot, I will add short-term contract. And I will have that way, a protection against future power variation. And this obviously calls on quality providers such as us and helps us delivering and protecting margins. So yes, you will have -- and we've said that the margins when obviously power price normalize, the unit margin might drop, but the quality and the quantity of contracts that we are facing make us quite comfortable with the numbers that we've showed you. And we'll give you more color in the future on what our customers want from us. Thank you.

This is the end of the Q&A session. Thank you all again for joining our market update. Of course, if you have any follow-up questions, do not hesitate to call the IR team, and we invite you to a cocktail right now. So thank you very much.