Engie SA ($ENGI)

Thank you for holding, and welcome to AMG's First Quarter 2026 Financial Information Presentation. For your information, this call is being recorded. [Operator Instructions]. I will now hand you over to Mr. Delphine Deshayes, Head of Investor Relations. Please go ahead, ma'am.

Thank you, and good morning, everyone. It's my pleasure to welcome you to Engie's Q1 conference call. Shortly, Catherine and Pierre-Francois will present our first quarter performance, following which we will open the lines to Q&A. And with my polite request of limiting your questions to one or two only, please. And with that, over to Catherine.

Thank you, Delphine, and good morning, everyone. Engie has started 2026 as it ended 2025 in fast forward mode. Especially as we have just closed an hour ago the acquisition of U.K. power networks, which is allowing us to transform are scale in the critical and growing power grid sector. We have also entered into negotiations towards a full transfer of our nuclear assets and liabilities to the Belgian government. If this process is successful, the Belgian government will be taking responsibility for its countries, long-term nuclear future, and Engie will have no remaining nuclear operations there. In terms of results, I can report a solid Q1 EBIT, indeed, slightly below the 2025 level that was benefiting from various tailwinds. The group continues to perform well with strong momentum in renewables and [ BEST ] and relentless rollout of our performance plan. Of course, the conflict in the Middle East has taken up much of our focus. Over all, I am pleased and relieved that steps that are staff in the region are safe. And, of course, very grateful for the professionalism of our teams who have done a fantastic job in managing to keep critical energy and water assets operational under difficult circumstances with limited business impact. We are, of course, very closely monitoring what is a highly fluid situation. As things stand when it comes to the energy markets, we are observing disruption mainly to oil, oil products and LNG supply. LNG represents about 6% of gas transport volumes around 1/5 of those volumes are transported through the strength of our moves. This has so far allowed the gas market beyond Asia to demonstrate some degree of resiliency, helped somewhat by new LNG capacity. In terms of power prices, we can see that those countries that have most heavily invested in renewables and nuclear are experiencing the least sensitivity to the current disruption such as France and Spain. This, in our mind, fully justified the case for electrification through the combination of renewables flexibility via storage and molecules and grid strengthening. This is not the same type of energy crisis as 2022, and Engie is a completely different company with a different and more robust business model. We have built a diverse gas sourcing portfolio and we've shorted exposure to open market power prices. Indeed, our only significant European exposure is in France where gas prices have less influence on the power price. So although we're certainly not going to benefit from the high volatility levels of 2022, our earnings are far more resilient based on more solid foundations. And as a result, filed sensitive to geopolitics. I mentioned in our February presentation that energy is at the top of country's agenda. By now, it should, if anything, the even more paramount. Security of energy for national government and affordability for end users of energy at customers. We have recently seen more demand for fixed offers in B2C, while in B2B small- and medium-sized customers, the trend towards longer-term contracts have been established for some time. Ample land resources and connection have become indispensable for supplying the required additional power to renew demand. It's highly a coincidence that tics is such a center of data center development. I strongly believe that having quality physical assets, attractively located matters more than ever in today's energy word. And with our renewable and flexible generation portfolio of around 100 gigawatt of capacity, our EUR 47 billion of rabequivalent in networks, 28% of which is power related, we have a fantastic presence in the physical asset world. This is crucially complemented by our 500 gigawatt hours of energy sales and our unrivaled energy market expertise to partner with our customers in meeting the challenges ahead. Moving on to this next slide, an excellent illustration of energy security being top of government agenda comes with the opening of discussions to transfer our Belgian nuclear assets to the Belgian government. We have signed a letter of intent covering the full scope of our nuclear activities in Belgium, i.e., the 7 reactors as well as all associated assets and liabilities, including decommissioning and dismantling obligations. The latest stipulates that the transaction should not unduly affect our overall financial position, neither adversely nor positively. This margin works are being suspended obviously, from those critical elements that require constant attention. The aim is to conclude head of terms by the start of October this year. This is the start of what will be a complex project and negotiation. In the meantime, our teams remain focused on continuing safe and efficient operations. and on advancing the planned SEO work programs. Turning to this next slide, some headline numbers. EBIT, excluding Nuclear was down 7% organically at EUR 3.4 billion compared to the high Q1 2025. Performance improvement amounted to EUR 120 million, up strongly from last year and well on track with our '26 to '28 targets of EUR 0.81 billion Economic net debt fell mainly to the capital increase of late February, which will fund the part of the U.K. Power Networks acquisitions, ending the quarter at EUR 41 billion equivalent to 2.9x EBITDA, well below our tailing of 4x. With a strong start and despite the turbulent geopolitical context, I can confidently confirm our guidance for the full year with net recurring income group share between EUR 4.6 billion and EUR 5.2 billion. Very pleased to report indeed the completion of our acquisition of UK Power Networks, just an hour ago, having raised through an advanced building at the end of February and a further EUR 2.1 billion to hybrids in mid FO. We have now completed the acquisition 2 months ahead of schedule and less than 10 weeks since we first announced it. U.K. powered networks will be fully consolidated as of May, and we expect it to contribute a range of EUR 600 million to EUR 800 million to 2026 EBIT. I am delighted that [indiscernible] is 6,500 colleagues are now part of our group and we are thoroughly looking forward to a long and fruitful collaboration in the years to come. We've also achieved further expansion in our Latin America power network business organically via the award of 143-kilometer transmission line project in Brazil and by acquisition of 122 kilometers of lines in Peru. Truly, we can say that we have achieved our aim of being a key player in the critical infrastructure activity of power networks, which now accounts for over a culture of our network regulated asset base and 1/3 of our network EBIT over the full year. With all the focus on networks and nuclear, I want to emphasize that momentum remains strong in renewal and best backed by a robust and balanced pipeline of projects, unchanged targets to 2030 and labor light focus on execution. Over the first quarter, we added renewables and best capacity in India, in Chile, in Italy and in France, taking a total to 5.7 gigawatts. We signed a PPA for a 900-megawatt onshore wind farm in Egypt, our largest yet. And in Brazil, our largest solar farm as we saw, which full commercial operation. At the end of Q1, we had 6.6 gigawatts under construction with 93 ongoing projects and continuing a track record of very efficient execution. Turning now on beds. The U.S. and Chile have tended to dominate attention with over 90% of our 4.7 gigawatt capacity at the end of last year, but in early 2026, we are making strides in Europe. In particular, we started construction of our first best unit in France at 110 megawatts, and we are acquiring two stand-alone projects in Southern Spain, to selling 278 megawatts of capacity. With this new project and 700 megawatts already in operation or under construction, we have achieved a milestone of 1 gigawatt of best capacity in Europe. So Engie on fast forward in a rapidly changing energy work. And now I will pass it over to Pierre-Francois.

Thank you very much, Catherine, and good morning, everyone. Thank you for joining us today. I'm very pleased to present our financial results for the first quarter excluding reached EUR 3.4 billion, down 7% year-on-year organically. Cash generation remained solid with CFF at EUR 3 billion. And economic net debt decreased by EUR 4 billion, including, of course, the impact of the EUR 3 billion capital increase that was completed early March. Our leverage is bottoming, with economic net debt to EBITDA down to 2.9 in compared to 3.1% in December 25. With that, the balance sheet is fully prepared to cope with the acquisition of U.K. Power Networks. Overall, this good start of the year allows us to confirm confidently of 2026 guidance despite all the uncertainties in the current market. Let me now walk you through the evolution of EBIT first and EBIT extent amounts to EUR 3.4 billion. down versus a high comparison base that benefited from high in spark spreads in France and also positive timing effect on B2B activities in Q1 '25 for about EUR 200 million. The key takeaway is the strength of our business execution, which cushioned the impact of external headwinds. In more detail, ForEx and scope had a minus EUR 75 million effect with negative impact from the U.S. dollar and the disposals of several cash generation assets in AMEA. Further external headwinds affected our organic performance, price and volatility. First, accounted for minus EUR 393 million with expected market normalization. Two activities are mostly impacted FlexPower and energy management. I will provide more color on that in the next slide. Volumes had a negative impact of about EUR 200 million, driven mainly by miter climate conditions weighing on our midstream and downstream activities. These effects were partly offset by the effective execution of our operational levels. First, commissioning, contributing EUR 102 million. This reflects disciplined investment execution with new renewable capacity coming on stream, additional regulated assets entering the network regulated asset base and for projects in Brazil. Second, our performance plan delivered EUR 120 million with solid execution across all businesses. Lastly, other items contributed EUR 135 million was a positive one-off on a settlement related to gas contracts in Q1 '26 for a net impact a bit more of EUR 100 million. Nuclear is down EUR 295 million as expected with a further phaseout of units in Belgium and lower power prices in France. All in all, quite a resilient Q1. Let's move on to EBIT evolution by reporting segments and starting with Renewable and FlexPower. EBIT declined year-on-year, reflecting disposals of cash generation assets in A and the negative ForEx impact on U.S. dollar. Cash generation EBIT was impacted in Europe by the expected pricing normalization with lower capture spreads, notably in France and in Peru, with the unplanned outage of a third-party gas pipeline beginning of March. Payables and Best delivered a resilient performance posting a slightly positive organic growth despite the lower capture prices in Europe. These ones have been more than offset first, by the decrease of the hydro tax in France, but more importantly, by the contribution of newly commissioned assets by a solid operational execution and by favorable pricing effects in Latin America. Turning to infrastructure. EBIT increased slightly year-on-year. Networks benefited from tariff increases in Europe implemented after Q1 '25 and from our performance plan largely offset by warmer temperatures in France. Local energy infrastructures delivered strong growth, driven by the continued development of dissecting and cooling networks, and also operational performance despite an unfavorable weather effect. Finally, in Supply & Energy Management, EBIT declined as expected compared to last year's high base. B2C activities have performed well, supported by effective portfolio management and strong operational execution, partly offset by mid weather and slightly lower commercial margins. This performance should be read in the context of the strong seasonality of our B2C activities with close to 70% of full year EBIT typically generated in Q1 a limited contribution in Q2 and Q3 and the remaining balance being delivered in Q4. B2B activities were impacted by less pronounced timing effect than and the gradual normalization of margins on contracts, which were locked during the tenant crisis. Commercial momentum remained solid. Finally, after energy management, electricity market conditions have remained challenging, both in Europe and in the U.S. with limited opportunities to capture value from but the business was supported by strong performance in gas activities on top of the settlement I previously mentioned and gas contracts. Overall, the segmental evolution illustrates solid operational execution across the group alongside the market normalization in Q1. We are now in a good shape to deliver growth over the coming quarters. Turning to cash generation. CFFO reached 3 billion, a EUR 1 billion decrease versus Q1 '25, reflecting lower EBITDA. Within working cap, inventories raised on cash flow due to lower withdraws on gas storage as a result of miler weather, offset by lower operating working capital requirements linked to lower power prices and also the warm weather. One point which is worth to mention, margin costs had only a limited impact on CFFO this quarter despite significant market movements in March. Indeed, since 2022, we have significantly centered our framework with tighter controls, anticipation mechanism and active management, allowing us to contain volatility-driven effects on our cash flow. Overall, changes in working cap were broadly stable and cash flow generation is in line with expectations. Economic net debt decreased from fourth 4.2 billion at end December '25 to EUR 41.2 billion at the end of March '26. Looking at the bridge, you can easily see the EUR 3 billion impact from CFFO and the same from the capital increase well above the EUR 1.3 billion CapEx. Other movements include ForEx effects on net debt, notably the impact of the Brazilian real. As a result, leverage ratios improved, with net financial debt to EBITDA at 2.5 and economic net debt to EBITDA at 2.9%. This reflects a temporary reduction of thesis will, of course, increase upon the completion of the U.K. Power Networks acquisition. So as of today. Overall, Engie continues to benefit from a solid and well-managed balance sheet, preserving a strong investment grade credit profile, which remains a key pillar of our financial strategy. A few words now on new [indiscernible] networks. We just closed the acquisition this morning, and the financing has also progressed well over the last couple of months with the derisking of a significant part of the funding plan. The EUR 3 billion capital increase was successfully completed on February '27, with 107 million new shares issued at EUR 28 per share. We also completed the hybrid issuance on for EUR 2.1 billion equivalent across 3 tranches, further reinforcing our credit metrics and financial flexibility. You have the details of each tranche indicated on the slide. It is fair to say that the bulk of the execution risk on the capital markets part of the deal is now behind us. As a reminder, the rest of the equity check is covered by committed bridge loans. These loans will be repaid in the next couple of years through debt refinancing and disposal of assets. With regard to the latter, we are initiating all key processes on top of ongoing projects related to normal portfolio management. We prioritize valuation as we have no pressure on timing, not to mention the material flexibility provided by the uncommitted part of our global CapEx plan. We expect U.K. power network to start to contribute from May with EUR 0.9 billion to EUR 1.1 billion of EBITDA and EUR 0.6 billion to EUR 0.8 billion of which are, of course, included in our full year 2016 guidance. These ranges reflect remaining uncertainties, notably around elements such as purchase price allocation and the fact that we are just closing today, which means that some detailed information was not fully available so far. Finally, looking at the broader funding equation for '26, disposals are expected to remain modest in the range of our usual disposal contribution and should be assessed alongside a lower CapEx profile this year than the EUR 12 billion annual average guidance of EUR 22 million excluding, of course, the acquisition itself. This mainly reflects the fact that U.K. peer networks will contribute for only 8 months as well as a slow start in investments in renewable and bath. In the context of time marked by geopolitical, regulatory and market uncertainties, we are confidently confirming our full year 2016 guidance with EBITDA excluding UC in the range of EUR 1.8 billion to EUR 14.8 billion, EBIT excluding NUC between EUR 8.7 million, EUR 9.7 billion, and net recurring income between EUR 4.6 billion and EUR 5.2 billion. And this exposure to the current Middle East situation remains limited, reflecting the group's derisking strategy with market sensitivity now materially lower, albeit we have been able to capture incremental upside with our power outright hedging policies, no material upside nor any downside should be expected from the current situation. Despite the uncertainties of the impact of the crisis on the economy and on our customers and on the fiscal environment the good start of the year across our operation and the early closing of U.K. Power Networks acquisition give us a clear line of sight to another year of strong delivery. We continue to be fully committed to maintaining the strong investment-grade credit rating with the firm a long-term objective of keeping our comic net debt-to-EBITDA at or below 4x. The ratio will temporarily go above 4% in '26 because of U.K. power networks that will only contribute to 8 months of EBITDA. It will immediately reduce below 4 in '27. The dividend policy remains unchanged. With that, I will now hand over to Catherine for the conclusion.

Thank you, Pierre-Francois. So indeed, we delivered a robust first quarter, both financially and operationally. We completed -- we announced and now completed the transformative acquisition of UK Power Networks, boosting our infrastructure DBU into a second pillar of growth to accompany the established momentum in renewable and best. We've entered into negotiation with the begin government towards a complete exit from nuclear in the country. And we are moving forward rapidly towards the ideal business mix and operational dynamism to adapt to this highly unpredictable environment and provide our customers and shareholders with reliable, robust and efficient energy and returns over the remainder of 2016 and beyond. Now back to Delphine for the Q&A.

Thank you, Catherine. Operator, can you please open the Q&A session and remind our participants how the process for asking questions, please.

[Operator Instructions]. First question comes from Ajay Patel of Goldman Sachs.

My question is around the nuclear discussions. Is there any more granularity you can give in terms of just what's under discussion. So it's the -- you have the back end the financing and nuclear facilities I kind of understand that. But just something on the asset side, are there any particular assets that are in scope over and beyond the nuclear assets that you have? Just trying to get a sense of what the earnings implication of such a transfer or I know it's very early stages, but even just getting a sense of what's in the discussion would help just with some calculations.

Okay. And maybe, Ajay, I think it may be worth also giving a little bit of the context to this negotiation. Because really, the whole world is putting energy security in the forefront of the agenda. And we've always thought that Engie that nuclear is much more of a sovereign matter than a private company. And I think with this circumstances, the government of Belgium and Engie are pretty much aligned on this, let's say, assessment. And while we've been at Engie very constructively focused on the implementation of the agreement that was signed last year, the so-called [ Fenics ] agreement. As you know, we've been focused on the work, the LTO, the restart last year, now you're back to work, by the way, our 2 clients have been delivering 100% in availability, which is quite amazing. Now they are going and they are undergoing further work. So we've been very focused on that. The new government has been actually very constructive as well, allowing the closing of the agreement that they had not been negotiating because there was a change in government in the middle. But a very focused supportive by asking us though is there a chance that we could extend the 2 plants further beyond 10 years. Also asking us questions about could there be further expansion beyond the 2 plants that you guys are working on these discussions were in the background, where frankly, the new -- the current government is establishing itself as wanting to put the nuclear future on Belgium into the future. And I would say for us, looking at existing plants, expansion was often not making economic rationality, which is why we were a little bit in a difficult spot when it came to expanding the older nuclear plants which is giving you a little bit of the context of the transfer. And that request came from the Belgium government. And I have to say it was a little bit of a surprise because we didn't think that the government would engage in such a complex project. But the discussions, frankly, have been moving at pace. We have been able to sign this LOI. The scope clearly is the 7 nuclear reactors. So as you know, 5 of them have started dismantling some of them have just been stopped. And [indiscernible], of course, 2 are being worked on in the context of the LTO. This is the scope. By the way, very important to note as well that the CPN has obviously acknowledged that the industrial situation or the industrial scenarios that are different from what they were before since they were looking at a dismantling provision with this Phoenix agreement in mind. And so they are now suspending their work and looking at the new industrial scenario. So the revision of provision that we were waiting is going to be delayed until the scenarios that are restabilized. That's the context very -- that's the context I wanted to share with you on the situation in U.K. The scope is indeed the 7 reactors. And as you say, it's early on the LOI has established a few key principles. That I've reminded in my script, which obviously will be more detailed in the coming weeks, coming months with established a project team and the aim is to sign a heads of agreement by October 1. So moving on swiftly on what is going to be a rich negotiation with the Belgium government.

Maybe a couple of words on the earnings impact since you asked the question, I think that you got the message that the idea of [indiscernible] it should have a neutral finance impact. What does that mean in our view is that the transfer should be done close to the net book value of the assets as of end of '25, that's what we would see as neutral, which would entail an earnings for the one-off earnings would be insignificant. So you should not expect a significant capital gain or significant capital loss. Going forward, there would be -- would be losing the contribution of the LTO and everything which is related to that. But that contribution was actually minimum in the guidance that we shared because you may remember that it is a flexible LTO, which means that the work is done over 3 or 4 years. with significant downtime 6 months downtime per year, which means that the contribution in the first 3 years was actually very low. So it's immaterial in the guidance and will not change anything in our numbers going forward.

And maybe worth also to complement that Belgium would remain a very important country for we have around 6 gig of generation in the country. [indiscernible]. We have home storage assets with [indiscernible]. We have some renewables. We obviously have [indiscernible]. We just put in line. And last year, we have similar assets. So obviously, these are not in the scope of the discussion. We are really, really talking about nuclear activities.

The next question is from Arthur Sitbon of Morgan Stanley.

The first one is actually a follow-up on the Belgian nuclear letter of intent. I imagine if you reach a final agreement, I imagine this will lead to the removal of restrictions on the nonnuclear European assets of [indiscernible]. Well, I was wondering, first, if you could confirm that. And if that's correct, if that could ultimately lead to a lower tax rate for Engie Group, the same way that it did when the restrictions were removed on the non-European assets of of [indiscernible] or maybe all the work on tax efficiency has already been done. So any color on that would be helpful. And the second question is about your guidance assumption, it seems a few assumptions of guidance at EBIT level, have changed a little bit and have a little bit improved since the full year results. But you haven't changed your guidance at EBIT level. So I was wondering if you didn't change it, but are you maybe a little bit more comfortable than before with it? And I see it didn't change at net income level because of net financial result being slightly worse than expected. I was wondering if you could explain the moving parts here.

Yes. At -- so it is clear that when we set all assets and liabilities, it does mean that it would be the end of the security package. So no more guarantees from Engie, and that's both the conditions for us to enter in such a year and a condition that is understood by the other party. And maybe you want to comment on tax rate.

Yes, we don't expect a further change in assumption on tax rate that would not trigger any further efficiency. And on the guidance, yes, we are confident with our guidance. We mentioned that. I think that still you have uncertainties around -- and our guidance is coping for these uncertainties, especially any change in regulation, tax or fiscal environment in various countries that we are working on. We need to be careful, and that's why we stick to our guidance.

The next question is from Harry Wyburd of BNP Pariba.

[indiscernible] here. So could you just clarify what the value of the provisions and backing assets that would be in scope because I know there's a very good disclosure in your annual report, but I just wanted to be fully clear in billions, how much liabilities and assets would be transferred as part of this deal? And then presumably, it would be the same as the last I mean that those liabilities would just turn into sort of a debt liability. If you could just help us a bit with the numbers on that. And then more widely on nuclear, you still got the French drawing rights. So you sort of pretty much out of our meta from the French doing like, does the join rights have any role in your portfolio, I guess, contribute a bit of power price out of power price exposure. So is there a sort of -- is that -- is it rational to hold on for those? Will you completely at [indiscernible], I guess have cited nuclear and renewables as a kind of sort of magic mix. I guess, the produced flat power prices in Spain and France. Would you rule out ever looking at [indiscernible], I mean I get what you say the sovereign point. But if you look at bench they've done uniquely under wrap model, which at least from my perspective is a pretty attractive way of doing it. So would you ever look at net at all? Or is this sort of energy saying that we're going to focus on renewables and that.

Look, in terms of maybe -- starting with your last question, we do think that the risk associated with nuclear and of course, we have a first-hand experience of that is indeed more suited to a national actor than a private company. That goes true for us as far as we are concerned for a while. Maybe in the future when nuclear technology will allow to have a much more manageable rate or projects which people have better control and execution it could change. But in the short to midterm, I don't see us doing nuclear again, certainly not in an investment point of view. And that we really have a fantastic opportunity sets with renewable with battery and also now with our second leg of powered network. So we think we have enough great opportunities to go after and that nuclear is not for Engie at least in a short to midterm. And I don't see that changing anytime soon. I think we also have to think about economic rationality. Again, what we're trying to do as MD utility to develop projects that makes sense from an economic standpoint. And we do think that renewables, especially with the development in batteries, the cost of batteries and that technology curve is still moving. And so we think we can do a lot with the right mix of assets both renewables, batteries and some of our, obviously, gas thermal plants that we have a good enough portfolio to provide both baseload or as consume profile, which is what our customers need while remaining low carbon.

Yes. And Harry, maybe to give you some data points. So if you take the numbers at the end of '25, when it comes to Belgium only, the provisions are about EUR 8.6 billion at the liability side. And on the face of that, we have assets in [indiscernible] which is our subsidiary in charge of managing the asset of EUR 5.6 billion. And then there is a few hundred million of cash also, which is available. So that would be -- that gives you an idea of, say, about EUR 3 billion of funding of provision. Of course, in the rationale of the transaction, Engie is liable to fund the provision that goes without saying and we would transfer the assets with the liabilities that are recorded. And of course, we are not getting away from that. Now you know that today in the law, you have a provision that allows to fund that up to 2030, we'll have to discuss that will be part of the discussion. When is it that we fund this that we will be, of course, accountable to fund it. On the drawing on the factoring right, I think that you need also to give a bit of time to the discussion. As Catherine mentioned, the government is willing to take over the nuclear activities and their ask is to come with a stand-alone business that can work -- so there are some scope discussions that we need to finalize with them. And I think that it is true for several assets that we need to look at. I would not comment further on that. But anything which is transferred will come, of course, with the value.

That's what I understand that is the drawing rate could possibly be part of the package in which case you'll residual European power exposure would just basically be right?

That's your judgment.

Next question is from Wanda Serwinowska of UBS.

Two questions for me. The first one is on the U.K. Power Networks deal, which was closed today and congratulations for closing 2 months ahead of the target. Can you -- can you disclose the net debt that you're acquiring? Because I think the deal was under the lockbox transaction. So can you just disclose the total debt or net debt figure that is going into your balance sheet? And the second question is about the trading environment. In the press release, you talked about more challenging conditions in the electricity market. You also said that the impact from Miosis remitted on activities. Can you just explain what makes this volatility different from '22, '23, why Engie is not printing hundreds of millions of euros on trading that will be appreciated.

On the U.K. Power Networks net debt, you should account for about EUR 119 billion that is the equity check plus the debt in the target. I think that's a fair item. On trading, the situation, as you know, is very different from the one in '22. In '22, we had a gas crisis in Europe with about 40% of gas coming to Europe, at least. And at the same time, we had a major downtime in MDF production in nuclear. So we had both gas stimulation and a power shortage that explain why we've seen a massive volatility and also spikes in prices, which were very high for the gas-only level well above 100. And even they came, you remember maybe 2 above 300 in pets. We have today a crisis, which is a neocrisis worldwide, and the gas impact is much lower. I mean, we have shared already that at the end of the day, it's only 3% of the gas in the world, which is at stake due to the limited share of LNG today. So you don't have at all the same market conditions. That's very important to understand. That's the first point. The second point is that our profile today is very different I mean we have been derisking. We have been decreasing our merchant exposure. This is the part of our story. And of course, it means also that we lose some upside because our merchant position on outright power, for example, is much lower than it was a few years ago, if you take on the bar side with the nuclear phaseout. But if you look at trading only, the price is different, not the same volatility at all, pretty stable in power, it's only gas and on gas or much lower. And it's also fair to say and we mentioned that in the past, that in 2022, we have massive optionalities embedded in our long-term contracts. We have less of that, in particular -- we do not have the Gazprom contract active anymore. So we have also less upside to get from these optionalities. And you have also noted finally, and the market is not fragmented and the geographical spread are not at all the same that what we had seen. So that's why we say no material upside expected, certainly the downside, given the current profile of the company and also the current profile of the crisis.

Would you be also able to disclose the RAP of U.K. power networks as of the closing date?

As of the closing debt, I don't know. I mean we have only estimate, I would say, anywhere between 9 million and 10 million of goods.

The next question is from James Brand of Deutsche Bank.

A couple of questions from me. The first one is also on the Belgium [indiscernible], and you've obviously covered a lot of ground and been asked a lot of questions on that already. But I was just interested, there was obviously this report earlier this year that your provisions could be increased by, I think it was GBP 3 billion. And I was just wondering kind of what the status was on that. I know that was only a kind of initial estimate or [indiscernible] consultation of some kind. But is that review due to conclude soon? Or has that also been put on hold as part of this new negotiation process? That's the first question. And then secondly, I don't know whether I missed I missed your commenting on it, but I thought it was interesting. You haven't commented at all in data centers in the presentation, which is obviously kind of high focus for the market at the moment. What are you -- what are you seeing there? Are you still seeing that there's very high levels of interest? Or are things kind of slowing down a bit?

All right. So in terms of the provisions and indeed, there has been a report at the end of last year, stating that overnight cost for this margin should increase by GBP 3 billion from the [indiscernible] point of view. This is not provision. This is overnight cost. So if that has been translated into provisions, it would be less, but still it was a significant increase. And indeed, what is happening now with this new deal on the table under negotiation is that the CPA has suspended its work reflecting the fact that there was a new industrial scenario on the table and they would resume their estimation or their report or their study. Once the new industrial scenario is stabilized. So that's obviously, part of the conditions for us to be able to enter in this negotiation is to recognize the fact that there is going to be potentially a new industrial reality, especially as we are spending the demanding operations in an orderly manner, and we don't just drop everything in mind, but we are managing the fact that the government is asking us to pause the dismanting operation to give the time for the process of transfer to progress and potentially to be completed in the weeks, months to come. So that's the situation, James, on the provision. On data centers, data centers, we continue to see, frankly, a very buoyant environment. I mean, you've heard the hyperscaler last week publishing their numbers of CapEx. It's just actually record high again announcements. That is translating into a significant power demand and power land specifically. We see that in our projects. As you know, we've established very structural approach to that with an objective of 3 to 4 gigawatt of cost-siding specifically where we would be providing power land, supply agreement, energy management, services and PTA and combination of all these. So we see that moving ahead. Obviously, there are a little bit of noise. There is a little bit of noise around acceptability of data center Also, connection is a big topic and load permits, et cetera. So that's obviously some of the constraints that these guys are facing. But we are moving ahead with the pipeline as I have discussed with you back in February. We have a number of opportunities. Some of them, they take time because of what I've just mentioned, there is some hurdles around connections, acceptability, permitting, et cetera. But the appetite is very, very strong. And we see both appetites in the U.S. but also in Europe, and we're using our physical assets that I mentioned and highlighted in both places, indeed to try and accelerate some of these developments. So U.S. and Europe are being concerned. We also have some opportunities potentially in Latin America. Different scale, we have a small, medium scale 300 megawatts up to 1 gigawatt type of campus size opportunities. And obviously, in the U.S., it's much more focused for us on renewables assets, while in Europe, we are benefiting also from a legacy asset base using the thermal specifically on turmoil footprint?

Can I just ask a quick follow-up on the provision point then that's a super-interesting answer. If the plan of the government -- Belgian government is to try and bring some of the units back. Is that an opportunity then potentially to get the level of provisions reduced? And is that potentially the big price from this deal? Or maybe a special to comment on that.

No. But I think that, of course, there will be the assumption of the Belgian government that they will change the profile. And if they do that, it probably because they believe they can do something different. For sure, we are not going to benefit or we should not be penalized on that. Today, we have a plan and the idea that we would transfer the provision, I think, in line with the existing plant. So -- and that's the same idea. So I think we should not speculate on the potential changes of the plan and then therefore, potential changes of provision because that would be with a different ownership.

I think maybe just on the Belgium topic. I think what is very important is what is -- what's the need for Engie. And what if we manage to get this process through the finish line, what that would mean is that we would be fully derisked from the Belgium nuclear operation. And that's important. Why is it important? Because you see that governments can change their mind on a matter that has a lot of impact on a private operator. whether it comes to dis managing scenario, whether it comes to what reactor, you want to expand, you can extend, et cetera. So obviously, even though we personally were very, very pleased with Phenix and really having divested the net operations significantly with the JV, with the CFD with a waste management liability that has been transferred last year we still have some remaining exposure to political change of mind in terms of energy policy. And so from that standpoint, we see this deal if we manage to put it to the finish line. We see this deal as friendly very positive for.

And the point here is that we are not trying to be smart or get a good bargain. We are keeping a big business in Belgium that we want to protect, Super important. We keep a good relationship. We just want to be fair. And I think the transfer will be fair, and we like the approach. I said no advantage, no disadvantage. I think this is the right thing to do. Clearly, not again the bargain for NG or being smart, but just being fair in the transfer.

With a very constructive counterpart in a counterparty that acknowledge the fact that for us, changes of trajectory is indeed a big disruption. And therefore, constructive and alignment, I think, on the respective interest to bring this project to finish line.

Next question is from Alex Roncier of Bank of America.

Thanks for the question. The first one, please, would be on gas network. I think on your CapEx plan across the strategic plan, you had a budget of around 3 billion for CapEx in gas network in 2028 compared to around 2 billion. So I was wondering a couple of things. One, if that setup was from 2026 onwards or if there was a gradual phasing Two, why or where are you spending more in gas network; and three, what kind of remuneration or returns should we expect on that extra EUR 1 billion of CapEx in gas network. The second question, please, on just I'm coming back and a little bit of a follow-up on Energy Management and trading and the form of Gen. I think you have a soft guidance for 26 of around EUR 1.5 billion with in B2B. So wanted first to confirm those numbers, that implies EUR 600 million for energy management, which means the business should be broadly flat year-over-year. And on my follow-up is on your comments about the conditions today being very different than in 2022. But if I come back to 2025, I think you highlighted poor conditions for the business given geopolitical volatility. And I would argue that this has been actually higher this year than it has been in early 2025. So for this in mind, is that EUR 600 million actually not being slightly at risk perhaps from higher provision. And last, just a very quick 1 and a clarification on numbers. Could you perhaps quantify the impact from the one-offs in Peru? And it would seem [indiscernible] nuclear would have been flat or even growing on an organic basis if we exclude that one-off and perhaps the timing in B2B as well.

That's a lot of questions. You're doing extremely well to taking a lot of questions on -- so I will try to be short on the various topics. So first, on gas network, well spotted indeed, and we have a bit more CapEx expected on the trajectory, '26, '28. And this is linked to our gas transportation operation, mainly in France. So that means that would go into indeed, the regulatory asset base and binding the remuneration that you are used to see in that kind of business. It's not 100% share yet, but it is indeed a direction of travel, and part of it will come through that's for sure. So we are working on it. So you may expect indeed a bit more than expected earlier. The EUR 1.5 billion on GM, I think at some point, we have to stop talking about GM, but I don't want to move away from that. Yes. I guess I guess it's fair to say that the energy management plus B2B in 2026. Should be a bit higher than that, indeed, given the strong performance of B2B, which is up for a good year. I mean, we are probably talking of a year which is probably above last year and need to be. And same should happen within Energy Management, be mindful that there are some pros like indeed a bit more volatility on gas that we can capture but there are also some negatives. I mentioned that the electricity market was not variant in the first quarter. Let's see how it unfolds in the following quarter. But yes, we are indeed, I think the 0.6% would be a low that's for share for EM. And then flex power. Now the Peru one-off is a negative it's about EUR 30 million that we had in Q1, it's not changing the overall direction.

The next question is from Luis Boujard of ODDO BHS.

Thank you for the presentation. Just maybe two questions on my side regarding firstly, the deal that you reached on the unwind and with the U.S. Department of exterior can may consider that indeed at this point in time, there is a number of risk embedded into these assets and into the offshore wind in the U.S. And on top of I would appreciate if you can comment eventually on the risk that you witnessed on the onshore in the U.S. and the onshore wind, if you think that still rising at the moment and how it could be tackled eventually in the future in our portfolio. And maybe a second question regarding the network division. You've won some interesting concession, do you think that you are still in the front of you some opportunities to keep growing into the region and regarding the potential option into the network in Latin America and Italy [indiscernible].

Yes. So in terms of maybe renewable development in the U.S., we have obviously readjusted a view of the pace at which we would be putting some of these projects in service or developing them and putting them in service. particularly between technologies and we know wins and renew on that wind was going to be more complicated, including obviously, offshore wind, it was very clear. Onshore wind was a little bit more -- we were a bit more hopeful and there has been a little bit of discussions and publicities around the risk in wind permitting. But so far, we have seen some projects and countering difficulties and others have actually received some positive notes. So it's not all stop. We're continuing our development we had integrated and included quite a bit of the preference of the administration or the -- just the more easy path for the solar and battery projects and our pipeline and our plans have been pretty much adjusted to reflect that. So that's on the onshore. So no further change of view basically based on those statements that were made I think last year. In terms of offshore, remember, we had 3 projects and the deal that we struck with the DOI concerns 2 of these 3 projects. We have not yet with a cost wind, which is the one in Massachusetts where we don't have a partner. That project has not been in scope of this agreement. So this is a project that we have actually out of this that was the more advanced where we have both lease and some development expenses that have been spent against that project and new partners. So that's the situation on Ocean Wind. In terms of -- and you will give the remaining exposure Pierre-Francois on Ocean Wind in the U.S. And in terms of networks, I mean, continuous optimistic on the views of our ability to develop organically in Latin America and network principally in Latin America, Brazil, Chile, Peru and the main focus when it comes to network opportunities, transmission and many organic.

Thank you. And indeed, Catherine. So the residual exposure, which is linked to [indiscernible], the deal will be completed, should be for Engie share around 150 million. So it will be indeed quite limited, but again, to be followed up. And I just want to come back on my previous question on James and [ Sam ] just in the sake of clarity. Because on the -- if you add up Engie Management and on B2B, which is today the way we look at James we would expect the full year to be more or less in line with last year. Remember that there was a big one-off in B2B last year in Q1. And of course, if you take that one-off out, then we are in a better place than we were last year. So I think that I just wanted to mention that.

Operator, we have time for very one last and only short question, please.

The final question is from Arnaud Palliez of CICC.

It's about the disposal program, the EUR 4 billion disposal program. I would like to have an update on the progress that are being made on these disposals. And out there also take into account into -- in your guidance for 2026..

Thank you very much. So on the disposal program, we are in 2026, we should be delivering a wind in my mic, sorry about that. but we should be delivering a year, which is more in line with the usual run rate that we have because the more significant part of disposal has been on this figure -- at the time, we had a security and the execution of the acquisition. So for 2026, you should be in the usual range using to 1,500. Last year it was 1,400. There are areas which have been lower. It depends also on the cutter date and some closings. So we want to be a bit careful. You remember, we said on the disposal plan that there were 3 buckets: The first bucket is the continued pruning of our portfolio and the geographic refocus strategic alignment. And that's the one that you are going to see at work in 2026, again, in the usual range. And then there are two other buckets assets where we have minority stakes into businesses with limited influence and no path to control, but we probably are going to tap in there; And the second -- the third bucket is assets, which are highly capital intense, but for which we would welcome service sharing with a cheap cost of fund and trying to capture some minority partners. And these two last buckets, whether it is our own minority stakes for us farming in minority partners, it is likely that they will peak in H2 '27 and H1 '28 as expected. Super important. We are value driven in our decision and execution. We don't need that over months. we have time and we want to maximize the value. So we'll be a bit picky and choosing. We have different IDs, and we will choose the ideas which are coming with a nice value. It's good to say that for the vast majority of the value of the asset, we have no impact of the crisis on the valuation. So it's very important that you realize that we are not at risk with the crisis. And the second point, which is important to keep in mind is that we -- these assets for sale, there will be also -- there to support our financial trajectory. It is depending also on our ability to deploy capital. And we have flexibility, of course, again, in our CapEx. So really a value-driven approach, both in timing and selection of assets to execute limited impact. And the impact of the disposals are fully baked in the guidance either for '26 or even for 2028.

So this is the end of the Q&A session. Thank you for joining the call today. And of course, if you have any follow-up questions, do not hesitate to call the IR Team. Thank you.

Ladies and gentlemen, thank you for participating in the Engie call today. The conference is now over, and you may disconnect your telephones.