Iberdrola, S.A. (IBE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. First, we would like to extend a warm welcome to all of you who have joined us today for our 2026 first half results presentation. As is customary, we will follow the traditional structure of our events. We are going to begin with an overview of the results and the key developments during the period. The presentation -- Q&A part will be delivered by the top executive [indiscernible] as today. Mr. Ignacio Galan, Executive Chairman; Mr. Pedro Azagra, CEO; and finally, Mr. Pepe Sainz, CFO. After the presentation, we'll move on to the Q&A session. I would like to remind you that we will only be taking questions submitted through our website. Please send your question exclusively via www.iberdola.com. Finally, we expect that today's event to last no more than 60 minutes. Should any question remain unanswered, the IR team will as always remain fully at joins. We hope that this presentation will be useful and informative for all of you, now without further ado, I would like to hand the floor over to Mr. Ignacio Galan. Thank you once again. Please, Mr. Galan.

Thank you very much, Ignacio. Good morning, everyone, and thank you very much for joining today's conference call. In the first half 2026, reported net profit increased by 22% and reaching [ EUR 3,336 million ] and adjusted net profit up 8% to $3,565 million, reflecting strong operating performance up to -- adjusted EBITDA rose by 7% to more than EUR 8 billion driven by [ networks ] up 13% due to tariff increases and higher asset buys in all geographies. Adjusted EBIT in powering customer increased 1% due to higher production and margin, especially in the second quarter and the condition of [ pump storage ], which already accounts 35% in our total hydro generation. Investment rose by 24% to more than EUR 7 billion, with 72% located to U.K., the U.S. and Brazil, including the acquisition of Neoenergia minorities. Networks accounted for 2/3 of the total investment, driving 11% increase in our regulated asset base to EUR 55 billion. In Power & Customers, up to June, we have commissioned 1,600 additional megawatts. And we are accelerating the addition of new capacity due to increasing demand across our geographies, especially in U.S. This is also driving governments and regulators to approve new framework to guarantee the availability and sufficient power and the reliability of transmission and distribution networks. In Europe, in the last week, the commission has published decreased package to increase network investment as well as several injective reduced taxation on electricity in a new electrification plan with very ambitious targets to double electrification rates. The U.K. also continued showing full commitment to electrification with increasing braceability, on the need of additional investment in transmission and distribution supported by attractive remuneration schemes. Finally, in Brazil, the renewal of distribution concession for 30 more years was signed reaffirming the country's attractive regulatory outlook for the coming years, supporting our recent acquisition of Neoenergia minorities for EUR 1.1 billion, as mentioned. In this context, our increase in investment during the first half, we have also continued preserving our financial strength with an FFO to adjusted net debt ratio of 22.4% and liability of more than EUR 21 billion. As you know, yesterday, we announce the acquisition of Caruna network, the largest electricity distribution in Finland with an enterprise value of $5 billion. Under the agreement, [indiscernible] will acquire 80% of Caruna for EUR 2 billion which EUR 1 billion will be paid in 30 months. The remaining 20 % stake will continue in hands through Nordic investment and pension funds. Caruna operates to distribution areas with major activities around Helsinki the main condiment area in Finland and [ joints ]. In total, Caruna has 89,000 kilometers of line, almost 70% underground. The transaction that we expect to close in the first quarter 2027 perfectly fits our strategic focus on regulated networks. With the recent investment of our remaining Mexican power plant, we will be changing thermal generation for a fully regulated company within an asset base of EUR 2.5 billion. That served to more than 20% of the electricity [ storage ] in Finland, a country with AA+ rating in Eurozone. With a stable regulation and a strong demand growth prospect, given the ambitious electrification target saved by the government to reinforce any security sufficiency. As a result, Finland system operators estimate demand growth between 22% and 45% up to 2030. Which will require a strong increase in generation. For instance, the system operator [indiscernible] estimate the wind capacity will multiply by more than 3x in the next 10 years, reaching 30-year by 2035. To secure the network investment required to support this growth, Finland has set a stable and predictable regulatory framework for electricity solution till 2031. With attractive condition, including an average return on equity around 8%, 100 basis points, to give you an example, above Spain. The transaction will also have a positive impact in our results and growth prospects. It will be accretive from the day 1, and we expect a sustained loan chain growth of around 7% per annum in the net income, thanks to additional investment up to between EUR 200 million and EUR 300 million per annum. With further upside due to electrification, the expansion of the centers and the possibility of the low 400-kilowatt transmission lines opened by the Finnish regulator earlier this year. Finally, given its size, its regulated profile with supportive framework and its cash flow generation, there is not enough headroom for this transaction in our current credit ratios. All in all, this deal is an excellent opportunity to accelerate the execution of our strategy by increasing our expansion to regulated networks in a country with a high rating, attractive regulation and [indiscernible] growth prospect. Coming to the numbers of the presentation. Adjusted EBITDA increased by 7% to EUR 8,050 million, supported by a stronger performance in the second quarter compared to the first quarter. Network adjusted EBITDA reached EUR 4.2 billion in the first half, up 13% compared to net customers registered in the first quarter. In Power & Customers registered an adjusted EBITDA of $3,800 million, up 1% year-on-year, driven by positive dynamics in the second quarter. By geography, in the U.K., EBITDA rose by 14%, supported by the higher contribution of transmission following the beginning of RIIO-T3 as well as a strong increase in production up to 27%, thanks to the onshore and offshore wind. In the U.S., excluding the one-off impact of Networks past cost recognition in 2025, EBIT increased by 6% thanks to a higher rate in New York and Connecticut and the contribution of the NECEC interconnection line between Massachusetts and Canada. In Brazil, EBITDA grew by 90%, driven by tariff increases in distribution and the new transmission line in operation as well as the good performance of Power & Customers. In Spain, EBITDA is up by 2%, thanks to a strong hydro output, mainly from pumped storage, which has allowed us to increase production and maintain our reservoirs close to record level of 73% of the total capacity, equivalent to 8,300 gigawatt hours of energy stored. Finally, the bid in another European countries and Australia was affected by the impact of ancillary service costs in Portugal and the sale of our onshore activities in Hungary and France, despite and overall trade increase in production, mainly in offshore in Germany and France. All in all, 83% of our EBITDA comes from [indiscernible] countries. Regarding FX evolution, the depreciation of the dollar and the pound against the euro has a negative impact of EUR 106 million as of June on our operating results. This means that including this effect -- excluding this effect, the increase in EBITDA will have reached 9%. Investment in the first 6 months were up 25% to EUR 7 billion, with 72% in the U.K., the U.S. and Brazil. 30% of the total investment we have made in U.K., mainly interest mission and distribution networks. 70% in the U.S. with increasing investment in distribution and offshore renewables offsetting the completion of NECEC and [indiscernible] project. And 25% in Brazil, including the acquisition of Neoenergia minorities. Spain represented 14% of the total investment in Australia and other EU countries remaining 13%. By businesses, Network continue to be our main investment destination, accounting for nearly 2/3 of the total. To reach EUR 4.4 billion, up to 42% year-on-year, mainly driven by U.K., which represent 1/3 of the total network investment after 43% increase driven by transmission. The U.S. account by 22% of the total as ongoing investment in distribution partially offset impact on NECEC project 1 is completed. The contribution of Brazil reached 40%, including EUR 1.1 billion due to the acquisition of Neoenergia minorities as mentioned. And this represents 7% of the total investment. As a result, our Regulatory Asset Base rose by 11% year-on-year to EUR 55 billion, thanks to the double-digit increase registered in the U.K., U.S. and especially Brazil were rose by 18%. Transmission was once again the key growth driver. With RAB up 30% in just 1 year. By RIIO-T3 in the U.K. NECEC in the U.S. and the completion of the large transmission lots in Brazil. Distribution RAB increased by 6% to EUR 40 billion well spread among geographies. Investment in renewables reached EUR 2,234 million with 70% allocated in wind increased $700 million in offshore, mainly in East Anglia 2 and 3, in the U.K., Windanker in Germany and Vineyard Wind 1 in the U.S. are more than EUR 900 million on onshore wind, mainly in the other European countries in Australia. We also invested around EUR 330 million in solar PV and [ EUR 300 million ] in the storage and others. All in all, up to June, we have put in service 1,600 megawatts. And we expect to accelerate additions of capacity from the second half of the year, supported by the demand growth and the strong appetite for PPAs. As a result, by the year-end, we will install 2.1 gigawatts more than 50% East Anglia THREE offshore wind farm in the U.K. We have another 2.2 gigawatts already under construction, 2/3 in U.S. and U.K. Plus 3 gigawatts more ready for final investment decision in the coming months, [indiscernible] been in the United States, mainly corresponding to repowering and life extension. In order 4 gigawatts in advanced development that could be ready by the end of the decade. This means the capacity addition by 2030 can reach up to 15.5 gigawatt significant fleet versus 9.5 gigawatts between 28, included in our plan. This increase internal investment in solving reinforced by governments and regulators who are taking additional measures to secure the viability of power and the reliability of network infrastructure to obtain all the benefit of electrification in terms of any security [indiscernible] competitiveness. European Union, only the last few weeks, the commission has published an ambitious grid package to increase network investment through faster permitting additional incentives. In electrification action plan, which sets specifically vision target of 43% by 2040, doubling current levels in just 50 years which could also mean multiplying total demand by 2 in the period. The plan announced measured incentivized heat pumps, electric vehicles and charging infrastructure. And proposed elimination of subsidies to fossil fuels and a strong reduction of taxation and electricity in line with several commission recommendation [indiscernible] published in the United Kingdom. RIIO-T3 continues progressing as schedules with our [indiscernible] decision already published. And the independent system operator has issued an updated plan beyond 2030, showing the network investment will continue to increase strongly in the next decade. In Brazil, following the renewal concession for 30 more years, Neonergia doubled this investment plan in distribution in the next 5 years [indiscernible] represent EUR 9 billion. Mainly in Bahia, where a few weeks ago, I could see personally a huge increase in power demand, driven by the electrification of the western part of the state and digitalization of recruiter and other sectors. In the U.S., new rate case progress as expected. For example, in New Year, where the regulator recently put $2.2 billion investment for this year and confirm the new tariffs we expect to close by year-end will have retroactive effects in May. And in Australia, we continue to sell to see full support electrification from federal state authorities are reflected new auctions in generation, storage and transmission. In terms of financial profile, our FFO net debt ratio reached 22.4%, and net EBITDA is fully consent with our BBB+ rating and our liquidity stands at EUR 21.5 billion covering 20 [ motor ] financial needs. As you know, our last AGM approved a dividend per share corresponding to 2025 result of EUR 0.685, equivalent a total dividend payment of EUR 4.5 billion, 2% more than previous year. According to Monday, we will pay EUR 0.47 per share as supplementary dividend. The average both received AEM was 97.9%, an with a quarter on 73.6%. Let me thank you all, our shareholders once again for their participation and support. Now you, Pepe, explain the result in more detail. Thank you.

Thank you very much, Chairman. Good morning to everybody. The first half reported net profit grew 22% to EUR 4,336 million, and the adjusted net profit grew 8% to EUR 3,565 million, supported by a 7% increase in adjusted EBITDA to EUR 8 billion. Since last year, the dollar has depreciated 6.8% against the euro, the pound 3.1%, while the real appreciated 4.6%. As a consequence, FX has had a negative impact on the P&L. Excluding it, as the Chairman has commented, adjusted EBITDA growth would have reached 9% and adjusted net profit growth, 14%. The adjustments to the reported P&L, which are limited and aligned with our guide and definitions as the following: First, regarding Mexico, in according with IFRS 5, Mexico is classified as discontinued operations. Therefore, its contribution is excluded from the EBITDA in both reported and adjusted results. At the net profit level, Mexico is presented under discontinued operations in the reported accounts, while in the adjusted figures, it is reflected on the equity line. As a consequence, in the second quarter, we have excluded the positive capital gain of EUR 950 million from the sale of the remaining business to Cox, which is the main driver of the difference with the reported and adjusted net profit. Second, as usual, U.K. capital allowances are adjusted at net profit level in '25 and '26. Finally, U.S. pass cost recognition in '25 is excluded from the adjusted net profit of that year, EUR 530 million gross, EUR 389 million net in line with the definition applied in our 25 guidance. You can find all these effects explained in more detail in the Annex on Slide 32, 33 and 34. Adjusted revenues increased 4.2% and after adjusting the recovery of U.S. pass cost in the first half of '25. Procurements rose by 4.8%. This resulted in a 4% increase in adjusted gross margin, improving the 1% decrease reported in March. Excluding the negative FX impact, EUR 220 million, adjusted gross margin would have grown 6%. First half net operating expenses are 1% lower year-on-year and 1% higher, excluding the FX impact of EUR 71 million. ENW is included for the whole first semester versus last year that was accounted from March onwards. Net personnel expenses increased 7.7% in as the second quarter of '25 included some positive nonrecurring impacts. External services grew 2.6% and other operating income improved by 40%. Analyzing the network business, its adjusted EBITDA grew 13% to EUR 4,213 million driven by a strong performance in all geographies due to higher asset base, especially in the U.S., the U.K. and Brazil. Excluding also EUR 53 million FX impact, adjusted EBITDA would have grown 14%. These investments in networks are making electricity available for household and industries, which is critical for the future of the economy and the energy independence. In the U.S., IFRS adjusted EBITDA increased 19% to $1.2 billion. Excluding the $550 million [indiscernible] recognition booked in the first half of '25 included in the -- in the reported figures. Underlying performance benefited from higher rates in distribution and a stronger contribution from transmission, including NECEC following January COD. In the U.K., EBITDA increased 24% to GBP 924 million with increasing contribution from transmission driven by the new RIIO T3 framework in place from April '26 onwards, higher contribution from ENW versus last year's consolidation started in March '25, while in '26 is consolidated for the whole first half. In Brazil, EBITDA was 7.1% to BRL 7.2 billion, improving from the 0.7% decline reported in March, driven by higher revenues in distribution due to better tariffs and demand, together with a higher contribution from transmission. In Spain, EBITDA increased 7% to EUR 154 million driven by the new regulatory framework and adjustments from past years. First half '26 Power & Customer business EBITDA reached EUR 3.8 billion and grew 1%, improving 3% fall at March, thanks to the Spain and the U.S. During the semester, Iberdrola produced 61 terawatt hours of electricity with a 92% sourced locally and fully emission-free, advancing in the energy sales efficiency while strengthening the availability and the reliability of supply. This demonstrates the importance of combining local generation and robust networks to provide a secure, resilient and competitive energy system needed by the new economy. In Iberia, EBITDA was EUR 1.9 billion and grew 1.5%, improving the 3.2% fall in March. With higher electricity sales and margins in Q2 more than compensating the lower prices, higher ancillary costs and the negative contribution of the regulated gas rate. As of June 30, Iberdrola had 8.3 terawatt hours hydro reserves. Pumping represented 35% of hydro production and should continue to help the results in the second half of the year. In the U.K., EBITDA increased 11.9% in to GBP 774 million, thanks to higher wind resources both on onshore and offshore more than compensating lower prices. The supply division had a positive contribution despite the smart meter sales. In the U.S., EBITDA increased 3.5%, reversing the decline reported in March to $2 -- to $525 million with higher contribution from wind and solar assets with stronger prices and output more than offsetting the negative timing effect versus '25. In the rest of the world, EBITDA decreased 18% to EUR 337 million, affected by the sale of Hungary and France, lower power prices and higher ancillary services costs in Portugal. In Brazil, EBITDA increased to BRL 661 million with higher contribution from the client business, partially offset by lower renewable contribution. Depreciation and amortization and provisions grew 2%, reaching to EUR 2,824 million. The evolution was mainly driven by the larger asset base and provisions. Adjusted EBIT grew 10%, improving from a 1% decline at March, reaching EUR 526 million. Excluding the EUR 52 million [indiscernible] impact growth would have been -- would have reached 12%. Net financial results increased by EUR 508 million to minus EUR 1.1 billion, mainly driven by the negative derivative impacts, especially in the second quarter, reflecting the Q2 '25 East of Anglia THREE positive one-off of EUR 282 million, and FX hedges linked to exchange rates as they were positive in 25% and negative this year. All of this is despite a EUR 28 billion lower average debt. Debt costs increased 44 basis points, mainly reflecting higher interest rates and higher percentage of debt in Brazilian reals, which is linked to inflation. Compensated at the EBITDA level as revenues in new and inflation adjusted. Excluding the real, debt cost fell 3 basis points to 3.5%. And Net debt increased EUR 3.8 billion versus full year '25 to EUR 54 billion, mainly reflecting higher replacement and currency appreciation. The evolution also reflects a strong effort in CapEx, including the EUR 1.1 billion acquisition of Neoenergia minority shareholders in Q2, partly observed by FFO generation and asset rotation proceeds. Iberdrola maintains a strong and resilient credit metrics, fully supportive of our BBB+ Baa1 rating. This financial strength allows the group to continue investing while preserving balance sheet flexibility. Our adjusted net debt to EBITDA remained at 3.5x. The adjusted FFO versus adjusted net debt reached 22.4%, and our adjusted leverage ratio was 45.3%, improving at 46.8% in the first half of '25. First half '26 adjusted net profit grew by 8% to EUR 3,565 million compared to the EUR 3,308 billion in adjusted net profit in the first half of 25%. Excluding the EUR 1,290 million FX impact, adjusted net profit would have grown by 14%, while reported net profit grew 22%. The difference versus adjusted net profit is mainly explained by the EUR 1 billion capital gain from the Mexico transaction recognized in Q2, partially offset by capital allowances in the U.K. Neoenergia minority shareholder purchases had added EUR 164 million to the net profit. And now the Chairman will conclude the presentation. Thank you.

Thank you, Pepe. To conclude, the strong performance for the first half and a very good prospect for the next 6 months to reinforce our positive outlook for the year. As of June, all our businesses has a positive evolution, especially in the second quarter, with net gross EBITDA growing 13%, thanks to a higher regulated asset base and tariff increase and power and customer EBITDA is already up year-on-year since to 3.5 gigawatts added in the last 12 months, higher production and the contribution from pump storage. I state this strong trend will continue over the second half of the year, driven by a further increase in our regulated base in networks made in transmission. The positive impact of new regulatory network like RIIO-T3 in the U.K. and the full contribution of the Neoenergia our net profit level after the acquisition of minorities. In Power & customers, we expect to have 2.1 new gigawatts before year-end and had reserves are still close to record levels. On top of that, 100% of our expected energy is already sold, and we continue to main our margin through pump storage. We will also benefit from an additional operating efficiencies and ongoing improvement in business processes due to artificial intelligence as well as for a more favorable evolution of foreign exchange. All in all, this allows us to comfortably reaffirm our guidance of growth above 8% in adjusted net profit in 2026. And if the positive trends of the second quarter continued in the coming months, we could give you some good news after summer. And as we have shown today, we are already working to continue exceeding our logo for coming years. Phase 2 the acceleration of organic investment in networks in the U.S., the U.K. or Brazil and empower, mainly in the U.S., additional efficiency gains and process improvement like linked to artificial intelligence. As well as the integration of Caruna yesterday, we reinforced our network profile in AA+ rate country in the Eurozone with attractive regulation, strong growth prospects. The transaction follows the same rationale that we have already applied in the last 25 years as longterm industrial investors and we have always demonstrated our capacity to materialize our value creation expectations. Now we will be more than happy to answer your questions you may have. Thank you.

The following financial professionals have raised the following questions. First, Dominic Nash, Barclays; Philippe Ourpatian, ODDO; Rob Pulleyn, Morgan Stanley; Skye Landon, Rothschild; Peter Bisztyga, Bank of America; Jenny Ping, Citigroup; Alberto Gandolfi, Goldman Sachs; Fernando Garcia, Royal Bank of Canada; Jorge Alonso, Berstein Societe General; Ahmed Farman and Arturo Murua from Jefferies; James Brand from Deutsche Bank; and finally, Javier Garrido, JPMorgan. The first one is, could you walk us through the main drivers behind net profit growth in the first half of 2026? And how much of that performance is sustainable for the rest of the year.

So I've seen this -- the first one is business drivers. Networks has a higher RAB in all countries. We have a strong performance in the U.K., in the U.S. and Brazil. In the U.K., we have higher contribution from electric in the U.S. consolidated in March 2025, increasing contribution from transmission RIIO-T3 in April and the U.S. higher rates contribution of NECEC interconnection between Canada Massachusetts for January. And in Brazil, increasing revenues in distribution to the better tariff and a higher contribution from transmission after finalizing all lots in the rent revision of rates as well. Power higher production in the U.K., U.S. and European countries. And we expect this trend to continue the rest of the year. In Iberia, we have a strong hydro production, especially in Pumped Storage. Already, as Pepe mentioned, represent close to 35% of our total production with an improvement in margins. Positive impact of the 100% acquisition of Neoenergia. So that makes adjusted net profit 8% or 14% excluding FX impact. And as was mentioned, is if the trend continues, perhaps after the summer, we can give even better news for you.

Second question, what gives you confidence in a [indiscernible] in 2026 profit guidance? And what are the key operational drivers for the second half?

I think it's seen I mentioned, I think we expect positive dynamics in second quarter that will continue the rest of the year. In other words, the regulators base continue increasing new frameworks with better rates and relative for net bill tariff on countries, additional contribution for Energia full year. In Power, we have installed 1.6 gigawatt hour a during the first half of the year. We put an additional 1.1 gigawatt in operation before the year-end, 100% of the energy sold hydro resales at the record levels, as Pepe mentioned, 8.3 gigawatt hours improving margins to the part the volatility of the price held to us. Improving FX, we expect improving FX dynamics at the negative impact recorded in the first half, and additional operating efficiencies was mentioned. So that's why I continue repeating that we are comfortable reaffirming our guidance for more than 1% growth in net profit. And I think in this positive terms of the second quarter continues in the coming months we could give you some good news after the summer.

Next question, despite that we are receiving some questions about the announced acquisition of Caruna that were mostly answered yesterday during the call, However, could you please comment generally on the strategic rationale, why enter in Finland right now implied multiples? And what gives you confidence that the transaction will create value for Iberdrola.

So this transaction follows the same rationale on the acquisition of other network companies like Scottish Power Energy, U.S. or electron we are a long-term industrial investor. We have not already speculative investors. We see opportunities, then probably another one has not seen as we have demonstrated and these opportunities we are seeing, we are able to materialize. Just already happened in cases like in U.K., you see the good result of U.S. or Brazil. Additionally, we are financing this transaction with the funds and the capital gains obtained from the sale of our thermal generation in Mexico. We are moving -- we are changing money from one country to another one a country in power generation for set power generation into the clean network operation regulated. The transaction as well will be accretive since the day 1, which I think is not normal in this type of transaction. And the company expects net profit to increase by 7% per annum given the predictable regulatory work and the investment plan up to 2031. Overall, I think that is a relatively small transaction compared with our organic investment I think you know we are investing in the range of EUR 14 billion, EUR 15 billion per annum. So I think that represents less than EUR 5 billion, so which I think is relatively small compared with the rest.

We have another additional question regarding the treatment of the shareholders' loan in the deal of Caruna that is [indiscernible].

Pepe, you reply that one?

Yes. Well, I think it's quite simple. So Caruna has net income. And after the net income that we are expecting to be around EUR 150 million in '27. After that net income, it pays a shareholder loan. And now with the acquisition that we do, especially of the 80% that shareholder loan will disappear. So it will be a net income. We will have the 80% of the net income. So I mean, after the shareholder loan, what you are seeing is a net income, but we are looking to the net income, which is corresponds to the equity that we are putting there, and that is what justifies the 16x that we are paying.

Next, can you provide an update on your artificial intelligence initiatives and quantify the expected impact over the time?

I finish that is...

Artificial intelligence...

Yes. Okay. I think we are progressing in the implementation of the initiatives we already presented you as well as on others. There are around 300 projects in this moment in production -- the final development stage. We have another 150 project progressing we are training now a ton of people, probably more than 4,000. And we expect that the value of all this initiative will be measured in the hundreds of millions. And I will -- you will see that one in the next month. So I think that is going on.

Next, where do you see the main [indiscernible] opportunities versus your current business plan?

Yes, let me -- so you asked for the [indiscernible]. Yes. We are already -- we are already better than our plan in terms of investment and results. Just to give you a few examples, in the U.K., RIIO-T3, final determination -- it was better than planned and expected. With Hydrotec is GBP 2.1 billion with a better return and faster cash flow recovery. In the U.S., the higher demand is driving additional investment in infrastructure, for instance, we are already in this moment in transmission with the project of power in New York. With a project which includes EUR 4.2 billion CapEx. In generation, in the United States, repowerings, life extension, new asset includes -- our plan includes around 2,000 new megawatts in 2025 to '28, but we have already installed 100 -- 1,400. We have another 100 in construction or we will be installing 2028. That means that is 30% more above the award plan in the U.S. In top of that, we have another close to 1,800 megawatts project, which be installed by 2030, in which we are signing PPAs with higher prices and longer duration. And finally in Brazil, the fact that the renewal of concessions, we have already committed to make investment of BRL 50 billion, which is around EUR 9 billion, which is mainly doubling the investment we make in the last 5 years with very attractive returns. In any case, I think we are working in our review our long-term plan, and we will share you the information in the next Capital Market Day that will take place in the year as well.

Next is regarding the new U.K. government and its implication for ever dollars U.K. operation and investment plans.

Well, Andy Burnham is not new for us. As you know, we know him from his time as major of Great Manchester. We were -- have the distribution service where we have the distribution service area, and we have already worked very well with his team. So I think the key priorities announced by Andy Burnham are absolutely aligned with our plans. The fact yesterday, the government already announced the elimination of VAT and electricity nothing which I think that is what we -- the European Union is saying is that is we've been claiming for years. So we would like to electrify. We have already make the things in a manner more attractive. So we need already availability, reliability, but affordability, the key thing for affordability is precisely cash reduction of electricity. So that is what they are doing. So we are aligned very much with our plan. And I think we know well his team. And I think we have already worked very well from our position as a distributor in the Manchester area where he was already the major in the last few years.