RWE Aktiengesellschaft ($RWE)

Welcome to the RWE Conference Call. Michael Muller, CFO of RWE AG, will inform you about the developments in the first quarter of fiscal year 2026. I will now hand over to Thomas Denny. Please go ahead.

Good afternoon from Essen, and thank you for joining the RWE Q1 Investor and Analyst Conference Call today. Our CFO, Michael Muller, will guide you through our key highlights and the financial performance of the first quarter as well as the outlook for the current year. And with this, let me hand over to you, Michael.

Yes. Thanks, Thomas, and good afternoon to all of you. We had a good start into 2026. Adjusted EBITDA stood at EUR 1.6 billion and adjusted net income at EUR 600 million on the back of a strong financial performance. Earnings per share was EUR 0.85, 25% up year-on-year. We have already achieved 33% of our full year adjusted EPS guidance. And thus, we confirm our guidance and we are now even more confident of achieving our targets. All of our Offshore Wind projects under construction are on budget and on schedule to achieve our planned CODs. Furthermore, we have reached key milestones in our Danish Thor and British Sofia projects. Both projects generated first power in Q1 of this year. We've also secured further long-term earnings. We were awarded 6.4 gigawatts in the U.K. T-4 capacity auction for delivery in 2029 and 2030. In total, 39 of our assets across gas, hydro, wind and battery storage were successful. Out of those, 4 assets secured 3-year agreements. Following the Annual General Meeting in May, we paid out a dividend of EUR 1.2 per share to our shareholders. And our EUR 1.5 billion share buyback program will be concluded by May 2026 as planned. Let's now take a closer look at the Q1 2026 financials. Despite a weak trading result, we achieved a strong earnings. Adjusted EBITDA was up 25% year-on-year. In Offshore Wind, adjusted EBITDA was EUR 570 million. Earnings were significantly higher than last year, mainly due to normalized wind conditions in the current year. Onshore Wind and Solar recorded an EBITDA of EUR 507 million. The results mainly increased on the back of organic growth, primarily in U.S., and better wind conditions in Europe compared to last year. This was partially offset by lower hedge prices in Europe and the U.S. after particularly strong hedge results in last year's Q1. In addition, we had a negative FX effect in the U.S. Adjusted EBITDA in the Flexible Generation business was EUR 657 million. Earnings are significantly up on the back of a EUR 332 million compensation payment for production restrictions of our Eemshaven power plant in the Netherlands in 2022. The compensation has now been approved by the EU Commission. Our Supply & Trading business had a weak start to 2026. The Q1 result was minus EUR 84 million. However, despite a weak Q1, we continue to be confident that we'll achieve our guidance for the full year. Other/consolidation was minus EUR 19 million. This is in line with our expectation and based on the timing effect at Amprion. In total, adjusted EBITDA came in at EUR 1.6 billion. Adjusted depreciation was higher compared to last year's Q1 due to organic growth. The year-on-year adjusted financial result improved due to an increase of capitalized interest. For adjusted tax, we applied the general tax rate of 20% for the RWE Group. Adjusted minority interest increased due to our partners' share in capitalized interest and Apollo's share in our participation in Amprion. Adjusted net income stood at EUR 608 million, resulting in adjusted earnings per share of EUR 0.85. The adjusted operating cash flow was minus EUR 2.3 billion at the end of Q1, driven by seasonal effects in operating working capital as well as changes in provisions and noncash items. Changes in operating working capital were marked by the seasonal purchase of CO2 certificates and an increase in accounts payable. Changes in provision and noncash items were also driven by seasonal effects in the utilization of provisions. It also includes the cash flow of our phaseout technologies. Net debt increased to EUR 15.6 billion due to investments and the seasonal effects in our adjusted operating cash flow. In total, we invested EUR 2.3 billion net, mainly in the growth of our Offshore Wind, Onshore Wind and Solar businesses. At the end of the year, we expect net debt to be at our 3x leverage target. For '26, we confirm our outlook. In the first quarter of the year, we delivered a strong financial performance, reaching 30% of our EBITDA guidance and 33% of our adjusted EPS guidance for the full year. We are, therefore, even more confident of achieving our full year targets. Adjusted EBITDA is expected to be between EUR 5.2 billion and EUR 5.8 billion. Adjusted net income will range from EUR 1.5 billion to EUR 2.05 billion, and adjusted earnings per share between EUR 2.2 and EUR 2.9. The dividend target is EUR 1.32 per share for this year and reflects our annual 10% dividend growth targets. And now let me hand back to Thomas for Q&A.

Thank you, Michael. We'll now start the Q&A session. And operator, please begin.

[Operator Instructions] We will now take our first question from Ahmed Farman of Jefferies.

I have 2, just on the guidance and the first quarter results. Firstly, I'd like to confirm if the EUR 322 million that you show in the FlexGen, was that sort of originally included or excluded from the March guidance and whether today's confirmation is on the same underlying basis as originally outlined back in March? And then secondly, since you're sort of maintaining the range for the Supply & Trading despite the first Q loss, I'd be interested to see what you're seeing so far in 2Q. And if the overall range from today's perspective is still relevant? Or would you sort of steer us in a certain direction given the first quarter results?

Yes, Ahmed, thanks for the question. First of all, I can confirm that the EUR 332 million were not included in the guidance. So that comes on top. And on Trading, I can confirm that the guidance range is still valid, yes, as I said. And you know that we typically don't comment on intra-quarter performances.

And so Michael, just to confirm, so the confirmation comments around the guidance is on an underlying basis? Can I just clarify that, for the full year...

It's your question, Ahmed, whether our views on an underlying basis have changed since mid-March.

Yes, correct.

And that did not -- yes, that did not -- so it has not changed.

And we'll now move on to our next question from Deepa of Bernstein.

I had 2. First one on the German capacity market auctions. I think, now we have some firm dates, like September 1 and 8th of December. So I was just wondering what's the difference between these 2 auctions? And at this minute, are you aware of what might be the pricing mechanism or anything around the rules? So if you could talk about that? And second question, sorry, a bit boring in terms of an accounting question. It's on the interest capitalized in your accounts. So last year, you had around EUR 800 million for the full year. Before that, before -- in '24, it was just around EUR 200 million. This year already in Q1, there's EUR 250 million that is capitalized. I think this is all coming from the Offshore Wind projects under construction. So I was just wondering, obviously, for the full year, probably this is around EUR 750 million, EUR 800 million. But going forward, as you're focusing more on U.S., which will be much more shorter-term gestation period projects plus for Offshore, you're shifting to project finance, et cetera. I was just wondering more medium term, what is this cadence? Like, when do we go from like this EUR 800 million down to EUR 200 million or so, which used to be kind of like more in the past? So that was the question.

Yes. Deepa, let's first start with the German capacity auction. So you're right. The current plan is that, beginning of September and in December, there should be 2 auctions. Actually, it's today in the cabinet of the German government. So we hope to pass it and then to be handed over to the parliament to then take the decision quickly before the summer break so that we also will have the first auction in September. If I'm not completely wrong, the idea is to split the 9 gigawatts into 2. So there's one auction taking -- so one auction is then 4.5 and the other one is also 4.5. That is the idea behind it. And the pricing mechanism is, it's an auction and it's pay as bids. So that's actually -- I mean, we would have wished for pay as cleared because we believe that's the best or better market mechanism, but it's currently a pay-as-clear (sic) [ pay-as-bid ] design, which is also fine for us. Second question on the capitalized interest. Yes, you are right in your observation. So what is happening in the course of the year is we only capitalized interest in Offshore on a turbine basis. So the moment a turbine comes into operation, we don't capitalize anymore. And therefore, as we have Sofia and Thor and also Nordseecluster currently in the commissioning or construction commissioning, that will lead to a certain phaseout of the capitalized interest. And kind of going forward, so this year, you're right, it's roughly EUR 800 million and then going forward, it will come down, '27, to roughly EUR 600 million and then '28 slightly lower than that. But obviously. Yes, there's always the offsetting effect then in financing costs.

And we'll now take our next question from Alberto Gandolfi of Goldman Sachs.

The first one is on the outlook on Page 8. I was wondering if you could potentially comment by division, if you see EBITDA for the year in light of Q1, which is always a larger share of the full year, if you see that at the low end, midpoint or top end? And maybe if you could, specifically on Trading, elaborate a little bit more what happened in Q1 and what's happening now? I mean, I heard from other companies in similar activities talking about pretty aggressive degrossing following the start of the conflict. And I was wondering if this is still the case or if you have grossed up your Trading books and actually now you've been making money in the division. Again, I'm not asking for quarterly development. I'm asking to see what's going on in the division. The second one is a bit broader picture. And I was wondering, this is the second energy crisis in 4 years. And I was going to ask your opinion, do you think EU learned its lesson, or you see signals that suggest Europe is learning the lesson and countries are learning the lesson? We saw EC paper on April 22, asking for faster electrification. But do you think really there's going to be like EUR 200 billion deployed against this? Do you really think we're going to see heat pumps acceleration, EV acceleration, electric boilers? And if so, how is this going to impact your business?

Yes, Alberto, I mean, on your first question, I would refer back to Ahmed's question where I said that the one-off effect was not included in the guidance, and the underlying view on the business hasn't changed. So therefore, in short, you can expect that, obviously, the guidance of the Flexible Generation business is then probably more conservative as we now have the one-off in the numbers, and that wasn't included in the initial guidance. Then on Trading, I mean, look, we don't talk about a specific position, but it's a little bit more complex. I mean, clearly, what you see currently is that we have much higher volatility in the market than we used to have. So if you look at the -- I mean, we steer our business apart from other KPIs also on value at risk. And with higher volatility, it means that even with small positions, you have still a sizable value at risk. So effectively, volatility is higher, the positions are typically smaller, but it means kind of the value at risk or the risk you have in the position is about similar. So from that perspective, I would say, yes, the traders kind of obviously adjust their position to the volatility, that's it. And obviously, we also -- you can assume that also we, as management, have a very close view after the weak Q1 on the performance. So discussion about major positions, that's obviously something we have. So you can imagine that positions we have on the books, are those where we really have a high confidence of the risk return trade-off. Concerning the energy crisis, I mean, look, I wouldn't look too much into the direction of EU. I think that the good thing is what we see is that Brussels clearly has learned the lessons from the last energy crisis, meaning if you look at the discussions around maintaining the energy-only market design, meaning maintaining the EU ETS trading system, what they have communicated so far is a confirmation of the existing systems and just some kind of optimization within the existing system, which I think is exactly the right thing. So they realize that if you have a supply crisis, the markets are the best ones to bring the markets back into balance. And they also acknowledge that the CO2 trading system is ultimately working and leading clearly to a decarbonization of the energy system. So that's, I would say, good news for us because it provides stability of the market design going forward. Honestly, the rest you see from the EU is, from my point of view, rather weak. So I would rather expect that here, it's more about the member states to really take action to drive forward. And what I would put forward is that clearly, governments have understood that resilience and independence you can only get in Europe via building out more renewables. That obviously means it needs to be a stable system. So there needs to be some complementation with flexible energy. But it's clearly more renewables, and it's also clearly more electrification. So therefore, I do expect to see more momentum, both on the renewable side, but also on the electrification side and the same time, also in firming up the power generation by flexible generation batteries or gas assets.

Michael, if you allow me -- sorry, this is all very clear. Just one small clarification. When you talked about volatility earlier has gone up, so smaller position, value at risk is the same. Historically, high volatility has been a positive for Trading. So can we assume the same correlation, i.e., good backdrop for Trading going forward?

You now want to get me comment through the back door on the actual performance. No. But I mean, I would say the following: In principle, your rule is right. I think the key question is where does volatility come from? If volatility comes from rumors or noises or x, that's not necessarily what our traders like. And -- and that was actually also the situation we saw in Q1 where announcements around the EU trading system and also the start of the war and some other rumors led to volatility, but volatility that was not driven by fundamentals, and that also led to the negative impact we saw in Q1.

And we will now take our next question from Pavan Mahbubani from JPMorgan.

Firstly, it would be great to get an update on your side on how you're seeing the demand for your products in the U.S. developing in terms of solar, wind, batteries. Are you seeing strong demand? Do you feel more confident in your outlook versus where we were in March? Or are things relatively unchanged? And my second question is on the U.K. I mean it feels like we're entering a period now of political uncertainty. How are you thinking about that as it relates to your investments in the U.K. and particularly around your AR7 projects? Would you consider slowing down or delaying FIDs until there was visibility? It would be great to get your thoughts on that.

Yes, Pavan, let's start with the U.S. So our view on the demand in the U.S. on wind and solar is clearly unchanged. But adding to that, it's unchanged on a very high level. So I reported previously that we see strong interest in PPAs or signing PPAs if you have projects ready to be built, so with a clear COD date, and that hasn't changed. With respect to the U.K., I mean, look, when we discuss internally the attractiveness of countries, for us, it's not so much looking at the current regulatory regime, but more looking what is -- what are the fundamentals of the market. So is there a demand for our product? And when I look at the U.K., I mean, what we learned from AR7 was that apparently, the government did an investigation to see at which price Offshore Wind is competitive relative to other technologies. And they cleared the projects that were below the threshold, which means that Offshore Wind at the prices we secured our CFDs is attractive for the U.K. macroeconomic. And that is, for me, a strong confirmation, and that also gives me confidence that those projects can successfully be delivered. And therefore, I mean, obviously, at the point of FID, you will take a close look at what is the current regulatory regime for sure. But you see me very confident on those projects that will bring them forward and also take the decision to the investment decision on those projects.

And we'll now move on to our next question from Harry Wyburd of BNP Paribas.

So 2 for me. So firstly, sorry, Michael, I'm going to come back to the guidance. So sorry to infuriate you by asking about this again. But I think, so far, you've been very confident that you're happy with where you are on an underlying basis. So fully noted -- also fully noted you don't want to talk about Trading. But is there -- can you just give us some color on what makes you confident? Is there something else in another division that you expect to go better in the last 3 quarters? I think we're just looking for something to add a bit of weight to your confidence on the remainder of the year? And then the second one is on the German capacity market. So pay as bid, and am I not wrong that given -- if we start with the supposition that you have a cost advantage because you lock your turbine build slots early, isn't pay as bid kind of worse than pay as clear because doesn't that mean you don't benefit from another bidder without the turbine build slot pushing the price up? And is pay as bid actually compatible with the EU rules because I thought that the EU rules sort of enforce pay as clear. So just, has the IRR outlook for that gone down as a result of pay as bid?

Yes, Harry, I mean, let's start with the guidance. So if I look at the current year, the segment where the first quarter was poor is Trading. And as I said, we are confident that throughout the year, we will recover that and therefore, also confirmed the full year guidance as we put it forward. So that is clearly the segment which now in the course of the remaining 3 quarters should outperform compared to the others. The rest is pretty much in line. So that's -- so that comes back to Ahmad's question. So that's for me, business as usual. So if we deliver business as usual, we are fine within the guidance. And then obviously, on top comes the one-off from FlexGen. Concerning capacity markets in Germany, I mean, first, let's come from the last question. I think our return expectations will be met, to be very clear. I also wouldn't bid into the auction with too low ones. So no change here. So what's the topic with pay as bid? I mean, in principle, pay as bid is not necessarily negative. I think the big risk with pay as bid is that you get winner's curse -- winner's curse that some people kind of -- I don't know, bid in here for tactics and then later on lose out. So it's more how it's kind of the competitive landscape. So therefore, for me, yes, I think we do have competitive projects at hand, and we also will bid them with the right return expectations. And that also should bring us ultimately into the right position. So from that perspective, no concerns. Pay as clear, as I said, it avoids winner's curse. So I would clearly have preferred that. The EU put that forward as a recommendation if you want to get that quicker proposal. But it doesn't kind of change it big time.

We'll now move on to our next question from Wanda of UBS.

Wanda Serwinowska, UBS. Two questions from me and one clarification, if I may. Can you talk, Michael, a bit about CCGT's profitability of CCGTs, especially in the U.K. and the Netherlands in Q1? Because when we look at the volumes that you produced from CCGTs in Q1, volumes went down and you mentioned unfavorable power price, if I'm not mistaken. So that would be question number one. Question number two is around the general capacities in Germany for new existing assets. I'm talking about T-2 and T-4. Is it something big for RWE? And just on Harry's question, you said that your return expectations will be met on new CCGTs, but what they are? Can you quantify them?

So let's start with the CCGT profitability. So in Q1, it was more -- I mean, obviously, it's a year-on-year comparison you're looking at. And what we saw last year was especially in the U.K., as we said, it was a low wind year. And therefore, we had a much higher utilization of the gas fleet. And this year, we see normalized winds and therefore, also the effect on the CCGT is the opposite. So it's more a volume effect that we're seeing, and that is also, to some degree, impacting the Netherlands. So no negative pricing effect here. So that's a volume effect. Second one on the return expectations, we haven't guided on the return expectations of the projects. Look, in the end, the way how we kind of stagger it, I mean, clearly, I think we said the range is roughly between -- I think it's like 8.5% and 12.5%. That was the range we previously guided for FlexGen and so for batteries and for flexible generation. Now you can say, look, this is Germany. So therefore, it should come with a lower WACC. And then the decisive factor is what do you assume, how much of the income of that asset is driven by regulated income and how much is merchant. And as I always stated, given the uncertainty, I would rather see a higher share of capacity payments in the business case, that should also lead to a higher regulated share, which probably also then leads to kind of something more in the lower half of that range that are guided. But that's just kind of a rough indication.

And if I may, but when you issued the guidance back in 2023, interest rates were different, right? So there should be some -- so your 8.5% should be a bit higher these days?

I fully understand that you would be very interested to get a clear answer from us. But you also need to understand that this is one of the decisive factor for our bidding strategy. So I think the key element is what Michael has said that there are drivers which are very similar across all projects that we do, which is the base rate in the country, which is the technological risk, which is the market risk. And those are the factors which we consider in setting the return requirements and ultimately placing our bid in the auction.

Okay. And just on CCGTs, apologies. How should -- how do you compare the current profitability in the current energy crisis to the one in '22, '23? How they are different? Because you are not printing hundreds of millions of euros, right? Any comments?

I think there are 2 fundamental differences between the current energy crisis and the energy crisis we saw in 2022. One is if you -- I mean, the volume that is missing to the gas market is about the same magnitude. You can argue this time since it comes on top. But the big difference is, in 2022, it was volumes into Europe that were missing. And since we didn't have in Europe sufficient import capacity, we had to balance the market within Europe. This time, it's volumes -- or molecules missing in the global markets, and you also have global markets to rebalance. And what we currently see is that the major part of the rebalancing or demand reduction is done in Asia by fuel switching or by shutting down demand. And therefore, the impact on gas prices is significantly lower than we saw in the crisis in 2022. Secondly, if you recall, in the energy crisis 2022, it was not only gas, but it also was French nuclear availability that was very low, and we don't have that issue this time. So it is different.

And we'll now move on to our next question from Peter Bisztyga of Bank of America.

Two quick ones from me, please. First one, just wondering, are you in any conversations or are you planning on being in any conversations with the U.S. administration vis-a-vis exiting your U.S. Offshore Wind leases? And then the second question, actually on your lignite business. Just interested to hear how the day-to-day sort of profitability of that business looks now versus your expectations kind of back in March given the commodity and power price environment that we're in?

Yes. I mean, first on the U.S., I mean, we always said that if we are not allowed to build the Offshore assets where -- and we paid for the leases, there should be some form of compensation in the long run. And that position still holds, and the rest I can't comment on. On lignite, you're right. I mean, on lignite, you have -- obviously, in the front positions are hedged. But what you see currently with elevated power prices and lower CO2 prices, you see additional hours in the year coming into the money. And these positions, we also do hedge, and that also provides upside to the earnings of our lignite business.

And we'll now take our next question from Rob Pulleyn of Morgan Stanley.

So may I ask on data center exposure, if there's any update on these other deals that you've been working for? Or any color you can share from PPA negotiations with hyperscalers and other data center offtakers? Secondly, I know there was a comment or a question on market intervention earlier, and we've spoken a lot about the U.K. From your perspective, do you see any risk of power market intervention in Germany? And lastly, if I can stretch it slightly, we noticed the Offshore CEO Sven is looking to not extend his contract come September. If you could just talk about the succession and the transition plans there?

Yes. So data center, I think, Rob, your question refers to Europe. because on the U.S., I already answered to that question previously. So yes, no, we are making good progress there. And we also see a continued good interest for offtake by data center companies. But as always, we would only communicate once the deals are done. I mean you saw a PPA that we signed with Amazon at the beginning of the year, and I would expect also more to come there. Market intervention in Germany, I don't foresee. Also because -- I mean, we discussed that just in the context of Wanda's question. I mean, if you look at power prices, they haven't risen so significantly in the latest months simply because, yes, you saw an uplift on the gas side, but there was also an offsetting effect on the CO2 price side. So effectively, prices have gone up, but so far to a limited extent. So therefore, we don't see that currently. Last one, Offshore Wind. Yes, I mean, first of all, Sven decided to not prolong his contract. We agreed with him that he would do -- keep an advisory contract for us. And so we still continue to benefit from his deep expertise. So transition will happen in autumn. And I mean, you know that we have a very strong team in Offshore Wind. So Gunhild as the CFO, Tobias Keitel will take over the CEO role and Thomas, who is leading the operation. And Julian will step up into the function of -- that Tobias has done so far. Julian is actually the one who ran all the big Offshore projects very successfully on time and on budget. And so he just moves up in hierarchy, but I think he stays in kind of his area of responsibilities, and we are very happy with his performance. And finally, Tobias. Tobias joined, I think it's a year ago. He previously has been CEO of Voith Hydro. So a very experienced manager in the energy area, so on the supplier side. And yes, we believe that this is a very strong team that definitely will continue the good delivery and performance of the Offshore segment going forward. So we are -- even though we are -- obviously, we -- there is some tears with Sven leaving, but there's lots of confidence in the new team going forward.

And we'll now take our next question from Louis Boujard of ODDO BHF.

Maybe we are going a bit more into a detailed question. I apologize for that. Just regarding the economic of the long-term vessel charter that you mentioned into the Offshore Wind performance as a positive effect. Could you just provide a bit more granularity on what it is? What volume are talking about? And is there any offsetting element that you've been taking into consideration from this specific line? And also still on the Offshore Wind market, if you could provide your assumption, which are embedded for the full year '26 guidance regarding the commissioning timing and the increasing load factors of the Nordseecluster and Sofia that is going to fuel by the end of the year? Next question would be on the Flexible Generation, EUR 332 million positive Eemshaven compensation, which is good, but the underlying is not that bad neither, notably the hedge and the capacity market is quite good as well. How shall we think about the evolution of this performance in the rest of the year and maybe also regarding '26, '27 winter considering the current market situation?

Yes. I just realized one thing when I talked about the management team, I missed on Ulf Kerstin, so both the Chief Commercial Officer, who is in both boards in Trading and in Offshore. Obviously, he's also staying and providing continuity on that topic. Yes, to your question, leasing, that's obviously a detailed IFRS question. So what happens here that the ships, the construction ships, they are activated in the balance sheet and then are depreciated over their -- over the lifetime of the contract. So that's the negative effect in depreciation. The positive effect comes either if we use the ships for our own projects, because then we book an earnings. But at the same time, we then activate that or we capitalize it in the projects, and that is leading then to a positive EBITDA contribution, offset by the depreciation I just mentioned. Or if the part -- or ship is not used by ourselves, but we rent it to somebody external, obviously, you would have the income from the renting to somebody external, which would show up in EBITDA, and then would be offset by the leasing. So effectively, it nets out in EBITDA -- in EBIT to 0, and it's just an accounting treatment. Regarding projects, Nordseecluster, Thor and Sofia, yes, you are right. So we will see a ramp-up both in capacity and also load factors as we go through the year, quicker now on Sofia and then Thor, and Nordseecluster is a little later because turbine installation is only set to start now in summer. Last one on Flexible Generation. So I would say no news on the rest of the year, so pretty much in line. And then for the later years, what you see is, obviously, we will see -- especially end of '27, '28, we will see commissioning of new batteries that will contribute to more earnings, and we also see a ramp-up in the capacity payments in the U.K. that also will lead to additional income. Obviously, all included in the guidance as we have given so far in the beginning of the year.

I can imagine. My question was more if there is any change into the merchant aspect of the profitability, but you clearly answered that, partly, not necessarily.

We'll now take our next question from Olly Jeffery of Deutsche Bank.

Two questions, please. The first one is on credit rating agencies and the leverage that you seek to target, the 3 to 3.5x. Have you start to have more contracted revenues? And in the U.K., where potentially you'll be having voluntary CfDs or even further contracted revenues, do you think that there's a stronger and stronger argument for the leverage factor that RWE needs to target to maintain its credit rating could be increased, and therefore, you could have higher balance sheet headroom by 2030? And then the second question, not really sure, with the German gas auction. Will the result of that be immediately following when the auctions are held? Is that the intention?

So let's start with the last one, the German auction results. I have to admit, I don't know. But Thomas or his team can clearly follow up on this one. But I would expect them -- I mean, it should be pretty quickly, I mean, definitely before the second auction. So if you have been successful. But we need to follow up on this one. Second one on the rating, yes, I mean, we guide 3.0 to 3.5x. And you can imagine that we're having discussions with rating agencies along the similar lines. Clearly, with further decarbonization, our risk profile is improving from an ESG perspective with more contracted income. We are also further derisking our cash flows going forward, and also a more diversified portfolio should help there. So there is a strong argument from our point of view that, over time, we should be allowed for the same rating to increase our leverage. But at the same time, these are obviously the conversations with the rating agencies. And as I clearly stated, my clear target is to keep our current rating, so the strong investment-grade rating. I would always wait for those conversations with the rating agencies before we go for significant higher numbers. And that's why also, when we laid out the plan, we put -- we positioned ourselves at the more conservative lower side. Secondly, I would also argue, I think in the current situation, it also has proved that it's good to have a solid balance sheet. And therefore, actually, I'm also pretty happy with the current setup. Having said that, if you talk especially in the later years, 2030, yes, that would be a good argument if we can increase that. But first, we need to convince the rating agencies, and then we'll also try to use the rating headroom.

And we'll now take our next question from Piotr of Citi.

So I have 2 questions, please. So the first one, I wanted to go back to a question about the data centers where you said you're making a progress. Can you give us a bit of indication what you see for the site values on the comparable basis with the bid? So if you were to sell and negotiate the site sale of a similar size today, would the price be higher or lower? And what would it be a lot higher? Or like can you maybe give us a maybe small indication where the values of such assets are? And the second question, maybe I'm completely wrong, but going into the gas capacity auction in Germany, is the design preferred for a CCGT? Or do you think we could be surprised by a more project from the open cycle gas turbines? And I understand you have a CCGT slot and therefore, somebody with a much lower CapEx could come ahead of you or maybe could change the way the auction is -- kind of the outcome of the auction. What's your understanding on CCGT versus OCGT into this auction?

Yes. So first question, you asked for a small indication, but I can't give you any indication because, I mean, clearly, that is -- these are negotiations, and I can't reveal numbers on this one.

I'm asking more about where the market is, like is it hotter or less hot?

Yes. But that's to say, I mean, ultimately, this is not a liquid market where you can look at the screen. That is individual negotiations, and I can't reveal numbers on individual conversations we are having. Second one on the capacity auction. Well, I mean, first of all, the 3.0 of capacity that we want to build is both. So it's inclusive. We have reserve capacities for 2.4 gigawatt of CCGTs, but also 0.3 gigawatt of OCGTs. And therefore, I would also expect both technologies to be in the auction. In the end, it's a question of the business case, yes. So what is -- I mean, what is the relative CapEx of the 2 of them, and then you need to look at what do you assume as merchant income. I mean, clearly, a CCGT will have higher merchant income in the front of the period because you will see more hours of them operating. OCGTs will have less hours because they have higher dispatching cost. But that then ultimately goes back to what are your assumptions on future prices. And again, that is also something which is competitive information, which we don't reveal before the auction.

And we'll now take a follow-up question from Alberto Gandolfi.

It's basically 2 parts follow-up on organic growth. The first one is that looking at Offshore, you seemed to have in the first quarter nearly achieved the year-on-year growth in million euros that you had for the year, so about EUR 300 million. And load factors, April, May seems to have been all right. Can we conclude, therefore, that Offshore guidance is conservative, you perhaps should be more towards the top end? And the second part is just a clarification. I understand you saying in the past that the first 6 months of last year, you didn't take much FID in Onshore in the United States because of what was happening on tariffs on the IRA. Does it mean we should expect very H2 or maybe Q4 skewed Onshore additions for this year, which may perhaps mostly contribute to '27. So there may be a blip in '26, but no change to '27. Is that the right way to think about it?

Yes. So I'm looking for Thomas to confirm that. But definitely the FID -- the CODs will be tilted towards the end of 2026. So effectively, you see that, in the first quarter, we only had a low number of new commission assets. So more to come as we progress through the year very clearly. And kind of the dip out of stopped FIDs last year between April and October shouldn't have an impact on '27. So that's the '26 effect you rightly referred to. And Thomas is nodding, so I was right in my answer, so that's good. Secondly, on Offshore, look, I mean, I explained to you that we are confident with the guidance, that nothing has changed here. So I will also leave that with the comments for Offshore.

And we'll now take the next follow-up question from Peter of Bank of America.

So maybe you had another guidance-related question, but looking at your FlexGen business, I guess, kind of in contrast to Offshore, if you strip out the gain, it was a pretty weak quarter, because of low load factors that we discussed earlier, but in your sort of slide pack, you kind of talked about higher hedged prices for the rest of the year. So I guess, first of all, was there any impact from having to sell out of hedge positions at a loss in the first quarter? And secondly, are those better hedged prices, kind of evenly spread through the rest of the year, or are they kind of back-end loaded? So any kind of color on that would be helpful, please.

Yes. No. So first of all, it's correct that there are higher hedge prices compared to previous year, but there's no specific pattern. I mean you see in general that typically the Q2 and Q3 results are slightly lower than Q1 and Q4, simply because you have less solar production in those months. But no, no specific pattern here.

And nothing that has changed compared to when we spoke about it in March.

Yes.

Thank you. There are no further questions in queue. I will now hand it back to Thomas for closing remarks.

Great. Thank you, Laura, and thank you, everyone, for dialing into our call today. If there are any follow-up questions, feel free to reach out to any person of the IR team. And apart from that, looking forward to see you at conferences, road shows, reverse road shows and latest, with our half 1 results in August. Have a great rest of the day. Bye-bye.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.

Great. Thank you. Have a great rest of the day.