Naturgy Energy Group, S.A. (NTGY) Earnings Call Transcript & Summary

Good morning, dear shareholders and everyone present. It is a pleasure like every other year to start the AGM in the first call. And if you allow me, before we officially constitute it, I would like to introduce you to Yago Rebeca's son; she works in the marketing department. And as you will see in the video, Yago, thanks to his mom's work, who is an employee of Naturgy, he explains in a quiet truthful manner, the commitment of our employees and of the group towards society. I hope you enjoy it. [Presentation]

So once again, good morning, dear shareholders. I'm very happy as the Chairman of the Board of Directors of this company to welcome you to the AGM of Naturgy. And over the last few years, we have held it both in-person and remotely. I would also like to thank both the presence of the members of the Board of Directors in person and online. So we officially start the AGM. As you know, the call of the AGM was published on the 29th of February on the website of the company, the CNMV and in several Spanish newspapers. The agenda is included in those announcements as well as in the attendance card that you have with you. So I suggest that it's considered read. Okay. Thank you. Now the Secretary will provide you the data for the attendance quorum to this AGM.

Good morning. The summary of the attendance list is the following: present, 154, owners of 655,245,747 shares that amount to [ 67.578% ] of the share capital. Represented shareholders, 302, owners of 223,232,581 shares, amounting to [ 23.02% ] of the share capital. So in total of 456 shareholders -- 456 shareholders, owners of 878,178,328 shares amounting to 90.6% of the share capital. These figures may still change depending on the latest shareholders that join us both remotely up to 9 a.m. in the morning. The final quorum will be published on the website of the company together with the results of the voting. According to Articles 193, 194 of the Corporate Law and Regulation 9 of the AGM, we have the legal requirements needed in order to validly constitute the AGM at first call.

Thank you very much. And given the attendance data, I validly declare this AGM constituted in the first call. The Board of the AGM is made up of myself and the directors that may have connected by video conference as well as the Secretary would also like to let you know, according to Article 203 of the Corporate Law and according -- and as we presented in the call, we have asked the presence of the Notary Public of Madrid, Mr. Fernando de la Cámara to take notes, take the minutes of the AGM, and I'll give the floor to the Notary.

Thank you very much. Good morning, dear Chairman. By virtue of the regulation and Article 101.3, I would like to know if anyone would like to make any complaints, objections or questions about the amount of people that we have present, the amount of shareholders. If we do so, we will include it in the minutes.

Thank you very much, dear Public Notary. I would like to thank the shareholders who wish to take the floor after my report and that of the Secretary. If you haven't done so, please make sure that you give the question cards to the staff available in the room. Those shareholders who will participate remotely, you can send your questions and ask to take the floor through the form that we have at your disposal. Once the presentations will come to an end, the Secretary and myself will answer any questions. If any shareholder wishes for the Public Notary to take little note of the question, please send us the text that you will use or please expressly say so on the remote -- on the form for the remote connection. Once all the questions have been asked, we will -- for the proposed resolutions and the Secretary will now give you some information about it.

Let me just summarize the process as in previous times. The system of negative substruction shall be used to then vote on proposed solutions related to agenda items. All shares present or represented shall be deemed in favor of the motion after substracting votes corresponding to shareholders or proxies declared themselves to be voting against it or abstaining. If a person or online shareholder leaves before the voting starts, please inform us if you wish to vote against the motion before you leave. The system of positive substraction shall be used to convert on proposal solutions outside the agenda. All shares present or represented shall be deemed against the motion after substracting votes corresponding to shares whose holders or proxies declare themselves to be voting in favor or abstaining. If a person or online shareholder leaves before the voting starts, please inform us if you wish to vote in favor of the motion before you leave. I would also like to inform you, therefore, the shareholders of all proxies who are here in person, if any of them would like to leave record that they are leaving the meeting, once the voting has started, please make sure you inform us, if you wish to do that, going to the table that states exit registry outside the room, and we will be able to take note of the quorum and voting. For those shareholders who are present remotely, please also inform us. And remember that you can vote any time before disconnecting. You don't have to wait for them to be presented to the AGM. We will first vote propose resolutions by the Board of Directors, and then we will vote those outside the agenda. We will take into account all of them that are about the same topic and we will put them together.

Thank you very much, dear Secretary. And before we start with your interventions, I would like to spend some minutes looking into the activities of our company in the year 2023. Today, my presentation will be -- will have the different 6 sections that you can see here. I think it's very important for all of us to know what Naturgy is today with 180 years of history, able to face the different thunderstorms that have come our way. We'll do a summary of the key variables of the year bearing in mind the activities, all the challenges we had to face. We look at the scenario of our activities for the year 2023. We'll look into the results that we obtained in 2023. And we will look at the position of the company when we look at the future and its contribution to energy transition and to conclude, the priorities that we believe are most relevant for the year 2024. I'm not going to go into every line that you can see here in this slide. But I would like to remind you that Naturgy was created in 1843. Its first customer was in the city of Barcelona. We wanted to provide public lighting to cities that at the time were lighted by gas. And through different milestones throughout its history, and we could highlight 2 specific ones. The allocation for internationalization. We started our internationalization process in 1992, over 30 years ago. And we took a step forward by buying [ Union ] Fenosa and it became a key player in the Spanish energy sector, in the year 2023, that we are presenting this year. Our company is fully committed to energy transition as a growth for the future. We are present in over 20 countries. We have total assets of about EUR 38 billion. And just to give you some brushstrokes of the most important data. I would like to highlight on the one hand, the 17 gigawatts of installed capacity for electricity generation, of which 40% comes from renewable sources. Total electricity generated in 2023 of over 44 terawatt hour, of which 30% were generated from renewable sources. Total distributed energy of over 410 terawatts hour that took energy to over 16 million connection points through distribution networks that amount to a total of 293,000 kilometers. It is like going 8x around the globe. In terms of energy supply and not distribution, a total of 18 million customers distributed globally to whom we supply total energy of over 270 terawatts hour. Our company is supported in solid values, robust values that have been developed by the whole team and that we summarizing 4 key ideas: first, we want to promote and capture all the opportunities of the new challenge entitled Energy Transition. And we have to do that at the same time as we generate value to all businesses and we meet with rigor, all the stakeholders' interests. We are committed to people and we are committed to the environment and the society where we carry out our activities. In the year 2023, we have faced a complex scenario with a lot of volatility coming from 2022 that, as I explained in the same meeting a year ago, had a lot of influence from all the unfortunate events of the war in the Ukraine and that mean that energy prices shot up. We have had a volatile scenario, but this year, but in a different way. There was a high correlation between the prices of gas and electricity that has been maintained, but we have recovered price levels that were recorded averages in the past. And as we explained a year ago, we've also maintained constant and intense regulatory changes and developments. That meant that we have had to adapt to those new regulatory changes. Despite that, the results of the company, as you will see in a minute, were very robust. We've had an improvement in the profitability and on the key management variables. The cash generated by the business has been strong, and that meant that we have been able to carry out important investment without increasing our debt level, keeping our commitment with the dividend policy. Moreover, and not just in terms of financial results, we have advanced in one of our other goals, which was to continue keeping the company in a competitive position, contributing to energy transition. First of all, we have increased our electricity renewable generation capacity, as you will be able to see in a minute. Secondly, we have strengthened the gas supply guarantee in the long term, thanks to our important partnerships. And I would like to highlight and congratulate ourselves that we have a very important partner Sonatrach here with us today. And we have also been a new vector for renewable gas transition. So the scenario, as I said, has been a scenario where the prices have adopted over the year 2023 and have gone to the more normal prices before the war in Ukraine. And electricity, also thanks to regulatory measures, has been able to be very competitive in Spain compared to the other countries around us. In terms of the performance of energy markets, as you can see, all the international markets have seen impairments in terms of prices. For instance, the oil price, but also the gas price, TTF, Henry Half or JKM. As I have said, the decrease on the prices and the correlation between the gas and electricity prices means that the pool price for 2023 has been on average about 50% below the year 2022. As I was saying before, as well as changes to the scenario, we have continued to see important regulatory measures and proposals. Both the European and the Spanish new regulations have impacted us. In terms of the EU, I'm not going to go into details, it's a very long list. I'll summarize here the most relevant EU regulations, such as the reform of the electricity market that was approved by the European Commission last year. Also, the exceptional measures taken due to the emerging situation to strengthen the stability of the energy system and also the European Commission's approval to an exceptional tax to the additional capital gains due to the energy scenario. This specific EU measure was then transposed differently in the different countries. In Spain, they've also taken many important new regulations. For example, the temporary cap on the last resort tariff, the Iberian exception that has put a price cap to the supply of CCGTs, a limit to the remuneration in terms of the inframarginal generation, also measures to protect vulnerable consumers, changes to the methodology of the, what we call, the PVPC. And finally, we've also seen a new version of the National Integrated Energy plan developed by the Energy Transition and Demographical Change Ministry including the ambition of the government so that by 2030, renewable sources are more relevant than was to be expected initially. Within this environment and the situation that I have summarized quickly, but you will all have access to the presentation on our website. The company has developed its activities, generating the following results. Sales have been over EUR 22.6 billion, which meant that the EBITDA was a total of EUR 5.475 billion. And the net profit after tax was EUR 1.986 billion, EUR 1.9 billion is the net result after paying a total tax of EUR 982 million. Moreover, and as we will see later in the balance sheet, we have generated enough cash to meet all our obligations. It -- the total cash flow generated was over EUR 5.3 billion. And that means that the most -- the largest part of the cash flow was devoted to investment with an investment of nearly EUR 3 billion. So about half of that will be devoted to dividends, keeping a net debt level of EUR 12 billion, similar -- very similar to what we had in the year 2022. More specifically, this EBITDA is based on 2 types of businesses that are well balanced, everything that has to do with distribution business that we call network infrastructure that will have contributed in 2023 with 47% of the company's EBITDA and the businesses that have to do with what we call markets and regulated businesses of marketing generation and supply, a total of 53%. In terms of the activities, the company is still well balanced in terms of gas and electricity, although the gas business is a bit more important, 57% or 43% in terms of electricity activities. And in terms of geographies, our first market is still Spain, which amounts to 59% of our EBITDA figures. As I said before, the balance sheet closed in a very robust manner. The business I was discussing weighing total EUR 37.893 billion. And as you can see, the debt level in the company has been in a very cautious ratio of 2.2x EBITDA. This is a normal ratio for the sector. And so we are able to see the financial strength and healthy status of our accounts. That 2.2x EBITDA-to-net-debt is ready. That means that both Standard & Poor's and Fitch rating agencies gave us a rating of BBB. Moreover, the company has been able to continue on liquidity sources in order to be prepared if there were -- if there was a need for additional funds. Right now, our liquidity is over EUR 10 billion. As for what was presented before, where have we allocated our cash generation, the EUR 5.377 billion of cash generation I mentioned before? There has been a lot of interest on investment, 50% of the cash generated has been devoted to investment, EUR 2.94 billion, EUR 1.45 billion was devoted to dividends and EUR 182 million to the payments of tax. If we focus on investment, I would like to say that investment has focused mainly into clear items. We wanted to grow in renewable assets, and we wanted to strengthen the distribution networks. If we talk specifically about the growth of renewable generation assets, they represent over 6.5 gigawatts of power. And those assets are mainly in wind or hydraulic assets. PV assets have a lower contribution. With regard to shareholders' remuneration, one of the items of the agenda that we'll be presenting to the vote is the dividend for the year 2023. We have made already 2 interim payments, one in August and one in November, amounting to EUR 1 per share. We are waiting for a third interim dividend that we want to increase to EUR 0.40. So it will be a total of EUR 1.40 for the financial year, which means that we will be at 31st of March 2024, we will have a yield per dividend of 7%, clearly above the ratios of our peers in Europe, but also other companies in IBEX or the US stocks. With regard to the performance of our shares, on share price. During the year 2023, we continued with the performance of the most -- we followed the most relevant index of the stock utilities, as you can see here, and this is a key figure that we should stress, which is related to January 2024, that was the date when the MSCI indexes were reviewed, leading to Naturgy's exclusion from those indexes. The MSCI are the most relevant indexes to many financial and algorithmic investors. And so if we belong to those indexes, it leads to huge amounts of buying and selling activities. And as you could see, we saw the effect this had on our performance. MSCI indexes are related to the company's free float. And as you can see, the company's free float over the last 8 years has clearly decreased, reaching in the year 2024, the total figure of 12% in 2024, which meant that the MSCI indexes reviews led to Naturgy's exclusion from those indexes. I now give the floor to the -- I'll now move to the fifth section that has to do with what we are doing in order to contribute to that key vector of energy transition. And Naturgy not only does not want to lag behind but it also wants to move -- to be very practical. We want to look at the energy transition, trying to answer 3 specific questions, which are the following: guaranteeing the supply to our customers, providing and giving our customers with competitive prices, and advancing in all our sustainability objectives. Any solution that means that this triangle may lose balance would not help us towards an orderly and sustainable energy transition. With regards to guarantee supply -- supply guarantee, sorry, I spoke before about the amount of distributed unsupplied energies through our electricity and gas networks. But I would also like to highlight that we have had 23 groups of CCGTs available to guarantee the supply. They have been 100% available to be used when the other generation technologies couldn't guarantee the supply to the country. With regards to the competitive prices, we have seen that the prices in Spain -- electricity prices in Spain have been of the most competitive in Europe. What we have done from Naturgy has been to adapt this price to over 2 million customers. So there has been a clear will for our customers to have the best price, whether the requests came directly from them or from us. And finally, we have moved forward in everything that has to do with sustainability. We explained before that 40% of the installed power comes from renewable sources. And this is increasing, as I will explain later. And we have what we call a pipeline, a current pipeline for the future that show our commitment to continue advancing in sustainability and energy transition. It's not just green washing, this is a reality. We have over 19 gigawatts of renewable generation in different states of development. And we have over 4 terawatts hour per year of pending in projects that will be executed in terms of biomethane. In the year 2023, we also looked into the evolution of what we call ESG that has to do with improving the environment, social contributions and improving our governance. And in terms of ESG, here, we have some of the key variables that are more -- explained more in detail in our nonfinancial results report that is available now on the website. I would just like to highlight a few but recommend that you read all of them because the level of progress has been very relevant for all of them. In terms of the environment, I would like to highlight the constant reduction of CO2 emissions. We emit less CO2. We started putting at risk the supply. We've also increased the amount of biodiversity projects, and we have increased our installed capacity free from emissions or zero emissions in a very relevant manner. In social terms, we have intensified our actions in 2 different ways: first, by improving diversity, increasing the number of women in management positions. Right now, 36% of the management positions at all levels are held by women. And something else that is very relevant is that through the actions of the Naturgy Foundation, we have improved the lives of over 250,000 people, thanks to -- and there are plans to help with energy vulnerability. This data has also been audited. So it's also included in the sustainability report. In terms of our contribution to distributed economic value, over 80% of the distributed economic value has gone to our suppliers. We have strategic alliances with our suppliers that go beyond financial aspects, but you can see how important part of our economic value has gone to our suppliers, followed by the public authorities and others. In terms of governance, we have also evolved significantly, and we have made sure that the company's remuneration policy has become also an incentive in order to move forward with our ESG goals. A fifth of the employees' remuneration -- variable remuneration comes from these ESG goals. And there's also been a recognition from the most prestigious entities in terms of governance, and they have given Naturgy several international awards. And we are now starting the month of April. So we've closed the first term of the year 2024, and we could inform you of what are the priorities -- the management's priorities for the team given the challenges that we have this year. We've summarized them in 8 main goals, which are the following: first, regulatory management. We have to continue advancing in everything that has to do with proactive regulatory management. The energy sector is still on the spotlight in -- for any type of discussions, financial discussions or political discussions, and that translates into new regulation and new legislation. So the proactive management of those regulatory changes will be very important. Also strengthening the distribution networks. We have to be ready to provide service to all the customers that require more amounts of energy. And that means that we have to strengthen our distribution networks both for electricity and gas, and we need to adapt the gas distribution networks to decarbonization. The third pillar would be gas contract. We are a company that is committed in the long term to gas markets, but we have to ensure that the gas market are -- that the gas contracts are at a market level or according to the market so that we do not miss potential gains both for the trader and the supplier. Fourthly, we have to obtain the essential role of the CCGTs and how important they are for the energy stability. They still have a very important role according to the regulation, even though there's been an important growth in the participation of renewable sources. But one of our objectives for the year 2024 would be to make sure that the essential role of CCGTs is officially recognized as a way to give stability to the system. Continuing with electricity, we also want to execute growth plan for the renewable generation Without a doubt, we are already doing that, and we will continue to so. The year 2023 was an important milestone in that sense, but the next few years will also have to be an important investment milestone in order to reach the figures that some of our customers, who are here or who are following us remotely, demand us to have in order to have a better mix of supply, which is more compatible with the environment. We want to grow also in renewable gases, in the short term with biomethane. That's another of the challenges for our company in 2024. We have a plan. We will execute it. And we believe that together with natural gas, with the blending, we will be able to supply more decarbonized energy without having -- with our customers having to make any specific investments or without having to change their way of living. We will also continue to improve our experience -- customer experience. AI and other technologies need to help us improve experience. We have 18 million customers, and we have to make sure that we give those customers what they need, improving their experience. And finally, as I said before, we must not abandon our strong evolution in terms of ESG topics, environment -- sustainability -- environment, social and governance. ESG topics are also part of our company, of our Board of Directors and management team, and we will be able to have a better and more long-lasting company for our shareholders and for our society. I'll finish here my explanation on 2023, I could have talked for long, but you have all the financial and financial information available to you in the company's website. And so I would like to thank you for your attention. And now we are going to open the floor for comments.

[Operator Instructions] We've received 5 questions. I'm going to read them in order. First of all, a question regarding preferred shares by [ Mr. Enrique Morena ]. I'm 76 shareholders, where I have preference shares. I've been complaining for many years starting in 2015 because we've been tricked. We never thought that our investment back in 2005 was permanent and forever. Everyone knows in Spain, the preference shares in Spain were the highest -- the biggest fraud in this country, and we don't know why do you continue to have them. I've talked to Mr. [indiscernible] and he made a commitment to give us an answer. You've made EUR 97 million in the repurchase offer in 2015. And thanks to that, Naturgy received profit. The National High Court of Justice denied EUR 26.8 million. They consider this an accounting income -- considers preference shares as a hybrid between shares and profits. This was never said to us. And I would like to know who at the Board is a shareholder of Naturgy since 2005. After 20 years, we have the right to use our savings. Second question, it was -- it's similar to one asked last year regarding energy poverty by Mr. [indiscernible]. It's a question on behalf of the alliance against energy poverty. In March 2021, the Catalonian government, and in this after years of pressure by citizens signed a historic agreement to condemn the debt from 2015 to 2020 to 35,000 families in Catalonia a year later. And this announced the combination of the debt for 2021 for 40,000 households. In our alliance, year after year, we take part in your meetings, and will be the same question, is Naturgy ready to negotiate with the new regional government in Catalonia to sign similar agreements and condone the debt to vulnerable households in Catalonia last year? We got the commitment by the Secretary General of the company, providing us information. We haven't received any information so far. The data we want is number of subscribers since 2017, number of households, [indiscernible] notification that have continued supplies since the state moratorium in force since April 2020. The debt accumulated by said households, for default index in the industry for every month, number of households in Catalonia with [indiscernible] with report on residential exclusion risk and debt accumulated by said households since 2015. Are you going to give this to us this time? The third question asked by Jose Antonio [indiscernible]. Mr. Chairman, dear Board members, officers and Naturgy staff. In our AGM, I would like to congratulate you for the great job carried out in 2023. That has given us the profit you've mentioned, which is higher than in 2022. It's -- we've made history in the company, always with the support that IBEX 35 had its best -- its best year 2019. I would like to give you an applause. Mr. Reynes, in 2024, Naturgy Energy Group has value reductions of 25% in value capitalization in the stock market. This was caused by one of the -- by the exit of one of the majority funds, CVC. As a consequence, 80% of the analysts following the share recommended sale, so are prices lower than withdrawals in this result. In my particular case, I bought my shares in 2019 at EUR 25. And today, 5 years later, they are listed at EUR 20. What can you tell me about this, if there's anything that you can say? Mr. Reynes, the corporate governance requires a separation of powers between the Chairman and the CEO. You've recently appointed 5 general directors. And I would like to ask, does this mean that so far, you're not appointing any CEO? Mr. Reynes, Naturgy Energy Group has currently 13% free float. As you've said, the CNMV has urged recently all companies with low free float to protect minority shareholders in this situations. I would like to ask you, are you taking due note of the recommendations by the CNMV? Mr. Reynes, in case, Naturgy's capitalization continues to drop in 2024, would you continue with the committed dividend or would you reduce the amount? Don't reduce the dividend, please. Let's look at what happened in Enagas, in a week they lost 35%. The funds that control the equity of Naturgy Energy Group hired you because of your professional value, no doubt about that, so that the company improves in every parameter compared to its peers and that would be in a remuneration according to your position. You know that as of today, your remuneration has been questioned, because it's a bit opaque. It doesn't show comparable parameters. And I need to ask you whether you would agree to not include your salary until Naturgy shares are not above EUR 25? And I think congratulations are in order because the company is doing a good job. Please continue to work hard in 2024 to achieve your goals. I trust you, and I would like to encourage you to do this. And for you, Mr. Reynes, I think the time of this AGM is a bit complicated. Those of us who live outside of Madrid, need to get up really, really soon. You didn't have any parking spot for visitors. It's everyone for himself. So my request for next year is that if you don't do it anywhere else, because with just a few -- I don't care where you do it, but please give us some breakfast or something. I need to request this because otherwise, I think that you'd be tightfisted. We have another two questions by [indiscernible] on renewable gas. A few weeks ago, the company announced the creation of a new business director, Renewable Gas, to strengthen its focus on biomethane and biogas. I would like to know how this materialized and what particular projects you're working on? I also think that because of Naturgy's experience in natural gas, we would be -- we should be able to lead the growth in natural -- in biogas in Spain in the following years. The last question is [indiscernible]. It's called exclusion of MSCI Index. The question is, is the Board concerned by the exclusion of Naturgy shares from the MSCI index? Is there any measure to be included in this index again in order to favor its current shareholders? These are the 5 questions.

Well, thank you very much. I would like to thank all of you that participated and the Secretary and myself are going to answer them. With all due respect to the shareholders that's present here, we're going to answer them in order. We should have started with yours because you are here, but anyway, we're going to answer. Regarding the first question related to preference shareholders. This has to do with the Secretary's job, and I would like to give the floor to the Secretary.

Mr. [indiscernible] I'm aware the last year you tried to ask the questions, but you were unable to connect online. And the answer was given in writing. It's on the company's website, the last year's AGM. Your current question is very similar, and therefore, the answer is more the same, but I would like to thank you for the acknowledgment to myself, because I've had 10 or 12 calls with them. The colleagues of mine have had also several calls, and we've explained the difference between a share and investing in preference shares. It's not correct that we made a commitment. The only commitment the company has is what's been published, and this is general for preference shareholders. We cannot buy shares to one shareholder and not from others. You mentioned data from a judgment the National High Court of Justice. You don't give more context. I don't know what you're referring to. I'm not aware of any legal proceedings related to Naturgy or its preference shares or perhaps this is related to another company. And you've said that this is a fraud, but no, it's not. There's no legal judicial decision regarding to preference shares and quite the opposite, is not a bad investment. I would like to remind the shareholder, which was also a preference shareholder, which is a profitability of 165 bps according to data. I don't think that it's 100% safe shareholders that give you 5.6% right now. So we can hardly say that an investment giving you 5.6% year after year could be considered a bad investment. In the past, you've asked us about liquidity. And this investment, as it's the case through shares this illiquid market with they're sold and purchased. There are no liquidity-related issues. So there are no -- it's not a fraud.

The second question, and again, the Secretary is going to answer it because he was referred to the question. It has to do with the request by the Alliance for energy poverty, they are requesting data that were previously requested.

In our last AGM, we had Ms. Maria Campuzano on behalf of the association. She asked this question on site. She asked the same thing, more or less in this year, something is added, details request of information. And regarding this request of detailed information, it even refers to [ coups ] or monthly amounts. This is not given because it's not possible. This is an AGM regulated by the Companies Act, Article 197 says that additional information can be requested. Other shareholders do this. But the Section 3 in this article says that the company and in particular, the Board members should not give the information in 2 cases: one, if this information is not necessary to protect shareholders' right. And we don't understand this detailed information is necessary to protect your rights as a shareholder. And more importantly, well, the first one is enough, but there's a second one. And I would like to draw your attention to this. We should not provide this information when this information, due to objective reasons, could be used for -- aims outside -- or purposes outside of the company, the shareholders or the AGM. This question is asked on behalf of the Alliance for Energy Poverty. This is an entity with the aim of exercising pressure on large companies to assume the responsibilities in situations of energy poverty. So this is outside the company's scope. Therefore, we cannot give this information. Regarding the rest of your question, which is similar to last year's -- as it was acknowledged in the past, there are different regulations. There's a royal decree from 2017 that regulates vulnerable consumers and Royal Decree Law 2018 established in the scheme of social bonus. Naturgy complies with this regulation. We have more than 200,000 customers in this redeem. We have different decrees published after the pandemic. We have one that prevents cutting the supply from -- to vulnerable customers. But we have several problems. There are different redeems in different regions, which causes huge management problems. For us, at times, we make mistakes, and we apologize for it. To my knowledge, there have been no mistakes this year, but anyway, we apologize. And there are some administrations that do not abide by their regulations. There are a significant number of local administrations across Spain and in particular, in Catalonia, that don't issue the vulnerability report, they have to, according to the legislation. And there's another element that we don't have, which is the regulatory development of this piece of legislation that you've mentioned. As long as it's not developed, we cannot act. We've requested this over and over, and we would like to support us in this request that we have, so that this regulation is developed and so that we can know what requirements we need to meet in addition to the law. The company acts as a company and through its foundation. As a company, as I said, we protect almost 200,000 customers with the social bonus. We created a plan in 2017. We provided them special advice to optimize their energy consumption. In particular, remember the company become paying last Christmas to recommend its customers to transfer to last resort tie, which was better for them, not for the company in terms of cost. That fractioning policies for payment and more than 400 agreements with regions and municipalities. I would like to finish by saying that Naturgy's foundation during this year has carried out several actions. Refurbishing of houses, almost 5,000. They have created a school of energy, that has benefited 35,000 people with 3,000 sessions. PV panels have been installed in shelters with a significant volume, Naturgy gave the foundation around EUR 6 million. I would have to add different subsidies from the administration. We've trained 1,000 volunteers -- 16,000 people have benefited from this, and we've created a specific vocational training, aiming at employability focused on vulnerable populations. It has been considered a mandatory degree according to the Ministry of Education. So Naturgy abides by the law. It would be better if the administration is complied with the regulations by issuing vulnerability reports and in the meantime, the company is making efforts with its customers and through the foundation. Thank you very much.

Now I would like to answer the third question asked by Mr. [indiscernible]. You've asked many question -- many questions, some of them were positive, others were negative. This is life, right? This happens every day. The share evolution. I think I've explained it. And you've used some figures, so that proves that you paid attention to what I said. So I think the chart clearly showed that -- belonging into some indexes, one of the most liquid indexes in the stock market, which are MSCI, has direct correlation with the evolution of the share price compared to our peers, other utilities. So I have to say that I consider this part as explained. Regarding corporate governance, I would like to tell you something. And today, we are submitting the corporate governance report. It's going to -- the [ Remco ] and the Board itself decide on the right structure for the right corporate governance of this company. And right now, the decision made by the Board is a structure that we have. I didn't raise my own salary. It's precisely the Remuneration Committee, the one that's in charge of it. And I'm sure that all the necessary inputs needed to make this decision are considered. And in particular, in 2023, even though the company registered record income, my remuneration has been 7% -- has had an increase of 7% -- has dropped by 7% compared to 2022. You said that we make decisions. I think the free float is a consequence that we have very relevant shareholders, institutional shareholders that believe in the company with a significant share. So this doesn't leave a lot of room for free float to grow. I think this proves trust by these important institutional shareholders. But from a negative perspective, the free float is limited. It's what it is. The amount of dividends, it will be -- whether it will be related to capitalization or not? Well, our dividend policy, as you know, is related to the company's results. It's prudent in terms of the company's result. The payout of our company is in the lower rank in 2023 compared to our competitors. And the dividend for '24 will be subject to 2 considerations. Obviously, the results and as we said in our strategic plan, keeping credit rating of BBB. As of today, we don't expect the dividend to drop because of these -- any of these 2 reasons. And then you've mentioned time and breakfast. We can count on the breakfast and please apologize. Perhaps you write to remind me of this, I intend not to eat at time. My family tells me the same thing. And regarding the time, we will bear this in mind. Since 9 am, we've realized not just because of you, but for others, it's not the best time, so we will change it. Three years ago, the time was irrelevant because it was completely online. I'm sorry, this person is speaking off mic. We cannot translate what the same. We take due note and the breakfast. Ms. [indiscernible], our fourth question. She asks about biomethane and whether it's appropriate to have this strategy and the responsibility this new development driver has. Well, first of all, I would like to tell you that at Naturgy, we are convinced that decarbonizing is not just electrifying. Other people think that it is, but we don't. It's not that we don't think it is that we see it. Decarbonizing makes sense, but there are many technologies that supplement possibilities so that the company is decarbonized. But at the same time, all of its customers are not forced to abandon investments that are still active. For us, renewable gas plays a paramount role within decarbonization and considering that it's the potential energy that could be more easily stored. Electricity cannot be stored for a long period of time, when there's an excess. In good times, we have seen it week with an excess of water in dams. And with the scarcity of electricity, for example, in December and January. So our focus on biomethane is sound and strong is real. Biomethane has another important characteristic. It's 100% compatible with our current distribution networks and consumption equipment in our customers' homes. We don't want to force an acceleration of electrification. For example, in Spain, there are 8 million households with boilers and these people would need to change the boiler. This means between EUR 10,000 and EUR 20,000 according to [ City Gas ] to decarbonize when they can decarbonize in a different way by using renewable gas. There's another group of gas consumers, which are industrial consumers. They account for 55% of the total energy consumed in gas. They have productive processes that are not easy to change and sometimes it's not even possible. We need to give them an alternative. Also to this small, medium or large industries to continue with the current production processes. And perhaps in the future, they can consider a transition, but not because there's not a current alternative, because there is. We are convinced that the potential of biomethane is higher than the goals of the new energy and climate plan. Actually [ City Gas ] has established that renewable gases could account for 76 terawatts hour energy per year in terms of the capacity to be supplied by renewable gases. This figure is well above the figures established by the plan. We're going to work on it. The fact that General Director has been appointed to lead this division that we are focusing in a specific strategy. This shows that we want this to happen and as soon as possible. And we think we have the skills built after many years of working in the world of energy and in particular, in the world of gas, to be able to turn this into an alternative for the future and not a residual thing as some people say. The exclusion of MSCI, this is not an index where we have a share. This depends on third parties. They decide whether you are there or not. And the main reason why you're included or excluded is the free float -- before with this, in my previous explanation, this has been answered. There are no other questions. So the Secretary is going to state the information regarding the decree in which we follow the recommendations by the CNMV, which is mandatory to do in this AGM.

As the title says, these are recommendations that we have to inform the shareholders about. There are 64 recommendations. However, 6 of them do not apply to Naturgy. So I'm going to focus only on the other 58. Of the 58, 46 are fully complied with. And therefore, there's no need to talk about them. We fulfilled 9 partially and the other -- for the other 3, we have given an explanation why we don't fulfill them. So I'm going to focus only on the last 2 groups. With regards to the recommendations, which we have given explanation, the Board believes that they are not appropriate for companies such as Naturgy, for instance, this one that recommends a big number of independent directors. Well, as you can understand, these for a company such as Naturgy cannot be compliant with because the law recognizes the right. It is an obligation, not a recommendation for proportional representation that has been exercised by the shareholders. The Board of Directors represents 80% of the shareholders. So it's impossible to fulfill the recommendation, and it's good that we don't because it means that we are abiding by the law. There's also another recommendation in order to divide the Appointments and Remuneration Committee into 2, to split it into 2. The Board of Directors continues to believe that this goes against the streamlining that is typical of Naturgy. With regards to recommendations only partially fulfilled, they depend, for instance, with regard to the long-term incentive, the recommendation is that is for a 3-year period. As you know, in 2019, we approved a long-term incentive. That was going to be 4 or 5-year plan. In 2022, the AGM extended it to 8 years. So it goes further than the 3 recommended. However, this is not typical system, and that's why it doesn't fit properly with the recommendations 58 or 62. Another recommendation talks about making sure that the Board of Directors do not -- are not present more than an x number of Board of Directors. We believe that we don't need to apply that because the Board of the Directors have been coming to our mid-teens in 100% of the cases. So there's no need for that.

Okay. So in that case, we'll move now to reading the proposed resolutions and efforts. In order to make it faster, if there are -- if we have big majorities, we will only inform you of whether it's been approved or not depending on the amount of votes that we already have. Without having to go into detail in each case on the number of votes in favor, against or abstentions, however, you will have all the details of what's in favor, against and abstentions on the website as of tomorrow. Also, those of you who are present in the room and wish to vote against or abstain, please just raise your hand after reading each proposed resolution. And at the end of the 14 instead of interrupting for each of the proposed solutions. And at the end of all of them, please come with myself with the Public Notary to the Board, so we can take a detailed information about your name and the shares you represent. For those of you who wish to vote remotely, because this is a hybrid AGM, you can do it through the voting form that is available to you. So your vote will be counted and will be informed to the Public Notary for -- to be included in the minutes. Finally, I would like to let you know that the items of the agenda, I will summarize them given that full text was available to you. The first proposed resolution to approve the annual accounts and Naturgy's management report for the year ending 31st of December '23. Approved? It is approved. Second, proposed resolution is similar but for the consolidated accounts. And for the same financial year 31st December 2023. Approved? It is approved. The third proposed resolution approved, nonfinancial involvement report, consolidated information included in the management report. Approved? It is approved. Fourth, this has to do with the dividends and it's approved the following proposal for the year ended 31st of December 2023, distributed in the following manner. First, to the dividend, an amount whose gross amount is made up of the following amounts: first of all, the EUR 969,373,801 corresponding to the 2 interim dividends for the year 2023 that have already paid out by Naturgy and that amounts to EUR 1 per share. So the amount of shares, less the amount of euros, and that's already been distributed. However, those that are on the treasury stock will not receive the dividend. Secondly, a complementary or additional dividend, which is the amount the results for multiplying EUR 0.40 per share for the number of shares that are not considered in the treasury stock when we have specific holders that have the right to receive it. It's about -- we have about 0.9% of treasury stock. Of that dividend, we have already paid out the amount of EUR 969 million on the 7th of August and 7th of November, the additional dividend will be effective from the first -- 9th of April 2024. We give powers to the Board of Directors specifically, so the directors who consider this important, will carry out all the necessary recommendable actions in order to carry out the distribution and decide on the amount. And to the remnant all of that is left. So the total amount will be distributed is EUR 3,803,719,666.39. Is it approved? Approved. Fifth proposal resolution, approve the management done by the Board of Directors in the year '23. Approved? It is approved. The sixth proposal compared to the others, this is only for consultation purposes. It's about the Board of Directors' Remuneration Report that was approved on the 26th of February 2024 when we called for this AGM. So we -- as it's been at the disposal of the shareholders as well as all the other documents for the AGM. Approved? It is approved. So the re-election of auditors. We appointed as auditors of the accounts and of the group for the next 2 years, for the years, '24 and '25, that will start on the 1st of January, and will end on the 31st of December to KPMG Auditores, S.L. And all of this is on the those resolutions documents. And it's regarding what it has to do with Article 264 of Corporate Law and Article 42.4 of the Trading Code. KPMG would accept their position separately and manifest that there is no legal incompatibility to do. So is that approved? Approved. Eighth proposal solution, authorization for the acquisition of -- on shares. The one that was approved 5 years ago is about to expire. That's why we are asking for its extension. We have to authorize the Board of Directors so that according to Articles 148 and 509 of the corporate law and for a period of 5 years since the adoption of this resolution, we can go ahead with the derivative acquisition of our own shares, either directly or not, according to the limits and legal requirements established. Is it approved? Approved. Ninth proposed resolution, to authorize and approve according to Article 515 of Corporate Law that AGMs, if we need to call for a convenient extraordinary AGM, can be done with just 15 days notice and not 30, provided that we give the shareholders the right to access the AGM remotely. And this would be -- we will have authorization for 1 year until the next AGM. Is it approved? Approved. And the last proposal, because this year, the AGM only has the minimum legal resolutions, which is to delegate the Board of Directors with all the powers of replacement for the Chairman, Secretary or whichever director is considered necessary as well as give them all the power that considered necessary in order to develop, execute, interpret, solve and formalize any of the adopted resolutions by the AGM, making sure that we will be able to execute them. And also delegate and give the powers to the Chairman, the Secretary of the Board, so any of them 2, indistinctively can sign as many private documents they need to on public documents in order to execute the prior resolutions without changing the scope, nature or content of those resolutions, obviously. Is it approved? It is considered approved. Ladies and gentlemen, shareholders, we have reached the end of this meeting and this AGM. On my behalf, on behalf of the whole Board of Directors, I would like to thank you for your attendance and for the attention you have given us. And I would also like to congratulate and thank the whole team of Naturgy, all the employees of Naturgy in Spain and in the other countries where we are present because as you can imagine, without the -- without their support, these results would not have been possible. Thank you all very much. Thank you to all of them who are following this AGM here and those who will follow us in future remotely. Thank you very much and see you in a year's time.